Riot Platforms: SBI Crypto sues Riot-owned data center

Apr 12, 2023 | Posted by MadalineDunn

SBI Crypto Co. is reportedly pursuing litigation against the Riot Blockchain-owned-Whinstone US data center based in Rockdale, Texas. The bitcoin mining company outlined in its lawsuit, filed April 6th, that the data center breached its Hosting Service Agreement, alongside other charges including “fraud, fraudulent inducement of contract, fraud by nondisclosure, and negligent bailment.”

The lawsuit has been filed with the United States District Court for the Western District of Texas, Waco Division, for millions of dollars in damages due to delays and substandard conditions. 

The SBI Holdings-owned company signed the collaboration agreement with Whinstone US in 2019, however, it claims that the data center did not meet industry standards, and despite assuring the miner that it had obtained commercial access to up to one (1) gigawatt of aggregated electricity, it had failed to do so, until “just before operations began” in summer 2020. 

Additional allegations include that the company failed to fulfill its promise to deliver 20,000 mining machines to the site; this figure reportedly reduced from a fleet of 16,200 in September 2020, to 14,600 in April 2021. The machines were also found to be in substandard condition, with some of the machines containing “high levels of dust and corrosion build-up.”