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Whinstone US, a subsidiary of bitcoin mining company Riot Blockchain (RIOT), has filed a lawsuit against fellow miner Rhodium Enterprises, claiming that it is owed $26 million in hosting fees. The suit also seeks a ruling from a local court stating that Whinstone does not owe any credits related to demand response programs to Rhodium.

Riot Blockchain initially made its claims public in its Q1 earnings report released yesterday. According to a petition obtained by CoinDesk, Riot's involvement in demand response programs, which offer power credits to bitcoin miners in exchange for reduced energy consumption, is the primary basis for the lawsuit. On May 2, Riot filed a civil suit for breach of contract with the district court of Milam County in Texas, naming four of Rhodium's subsidiaries as defendants.

Riot Blockchain has filed a lawsuit accusing Rhodium Enterprises of intentionally underpaying for hosting services at the Whinstone facilities. According to the lawsuit, the two companies had an agreement to split the net revenue from Rhodium's mining, but Riot alleges that Rhodium failed to pay Whinstone $26 million between 2021 and Q1 2023. Riot claims that Rhodium deliberately miscalculated the hosting fees owed and seeks to hold the company accountable for breach of contract. The lawsuit was filed in the district court of Milam County in Texas and names four of Rhodium's subsidiaries as defendants.

Whinstone alleges that it made attempts to collect payments in both May 2022 and on April 5th, but the Rhodium entities have either refused or neglected to make the payments, which has resulted in the initiation of a lawsuit.

In a separate claim, Riot alleges that Rhodium's entities had been accruing power credits on their balance sheets for a period of two years, despite not having the necessary rights to do so. Riot is also seeking a court declaration that it does not owe Rhodium any power credits. According to Riot, while these power credits may have had a legal basis in previous contracts, they were rendered obsolete by the agreements made in December 2020.

In October 2022, the Rhodium entities requested that Whinstone "verify" the amount of power credits that they believed they were entitled to, which were not related to the expired contracts. However, Whinstone refused the request and instead filed a court motion seeking a declaration that it does not owe any such power credits to Rhodium.

Riot has acknowledged the lawsuit, but has not issued any statement regarding the matter. Rhodium, on the other hand, declined to provide any comment when approached by CoinDesk for their response.

Source Coindesk