Bitcoin Miner Riot Sues Peer Rhodium Enterprises for Alleged $26M in Unpaid Fees
Bitcoin mining firm Riot Platforms’ unit Whinstone US is suing Rhodium Enterprises, another mining firm, alleging that Rhodium owes $26 million in hosting fees. Whinstone has filed a civil case for breach of contract against Rhodium’s four subsidiaries, claiming that they deliberately miscalculated the amount of hosting fees they had to pay for Whinstone’s services. The two companies had agreed to share the net revenue from Rhodium’s mining at the Whinstone facilities, but Rhodium allegedly short-changed Whinstone from 2021 to the first quarter of 2023.
According to a petition obtained by CoinDesk, Riot’s participation in demand response programs is the key reason for the lawsuit. Under these programs, bitcoin miners receive power credits to limit their energy consumption. Riot alleges that Rhodium’s units amassed power credits on their books for two years that they did not have rights to, and Riot wants the court to declare that it does not owe Rhodium any power credits.
The lawsuit claims that Rhodium refused or failed to pay the hosting fees despite Whinstone’s attempts to collect the payments in May 2022 and on April 5. Whinstone also rejected Rhodium’s request in October 2022 to verify that they were owed power credits that were unrelated to the expired contracts. Riot claims that the power credits could have had a legal basis from previous contracts, but those were superseded by the December 2020 agreements.
Riot disclosed its allegations in its first-quarter earnings report on May 11 but did not provide further comment. Rhodium declined to comment on the matter when approached by CoinDesk. The case has been filed with the district court of Milam County in Texas.