Crypto mining firm Riot Platforms, formerly known as Riot Blockchain, has initiated legal action against Bitcoin miner Rhodium Enterprises, seeking to recover more than $26 million in alleged unpaid mining facility fees. According to Riot Platform’s Q1 2023 financial report, Rhodium breached its contract with Riot by failing to pay hosting and service fees associated with using Whinstone’s Bitcoin mining facilities, a wholly owned subsidiary of Riot. Riot has filed a petition against Rhodium Enterprises in the Milam County Court in Texas and has requested permission to terminate certain hosting agreements with Rhodium. Riot also proposed to be exempt from repaying any outstanding power credits upon cessation.
Riot acknowledges that estimating the likelihood of recovering the unpaid fees at this stage is still uncertain. Rhodium was served on May 8 with a deadline to respond by May 30.
Meanwhile, Riot has mined 2,115 Bitcoins in Q1 2023, an increase of 50.5% over Q1 2022. It was further noted that Riot did not have any affiliations with recent bank collapses and currently holds its cash and cash equivalents at multiple banking institutions. Riot anticipates that crypto mining companies will have challenges in 2023 due to the significant price decline of Bitcoin and other macroeconomic factors. Riot’s relative position in the industry, its liquidity, and its absence of long-term debt, make it well-positioned to benefit from such consolidation.
