Bitmain Faces $5 Mln Lawsuit For Mining Cryptos at the Expense of Its Customers
Cryptocurrency mining giant Bitmain is facing a class action lawsuit for over $5 million that alleges unauthorized crypto mining by the firm.
Bitmain received a class action lawsuit in the Northern California district, that is initiated by a Bitcoin miner, named Gor Gevorkyan.
The company is being accused of utilizing customers’ newly purchased machines to mine cryptocurrency at full power for its own benefit while customers were configuring their equipment.
“Until the complicated and time-consuming initialization procedures are completed, Bitmain’s ASIC [Application-Specific Integrated Circuit] devices are preconfigured to use its customers’ electricity to generate cryptocurrency for the benefit of Bitmain rather than its customers.”
In ‘Factual Allegations’, the class action states that Bitmain has recently modified the startup procedure for its ASIC devices in order to start in full power high consumption mode even before customers are able to link it to their account.
“The default account setting on the Bitmain ASIC devices is set to contribute to Bitmain’s own account on its own Antpool server. As a result of this new practice, Bitmain ASIC devices cost more to operate during the setup phase and transfer virtual currency to Defendant rather than the customers.”
The document indicates there are more than 100 class members involved in the action and that the aggregate amount under debate “exceeds $5,000,000, exclusive of interest, fees, and costs.”
The gains made from hidden mining are difficult to estimate, especially given the varying potential rewards for running an ASIC, as well as the market price, which fluctuated significantly.
The plaintiff brings the class action on behalf of all persons in the United States who have purchased Bitmain ASIC devices.
Grevorkyan seeks an order requiring Bitmain to cease the unfair competition, full restitution of all expenses, interests at the highest rate allowed by law, and the payment of his attorneys’ fees and costs to the procedure. Additionally, Bitmain is required to “disgorge all monies, profits, and gains which it has obtained and will unjustly obtain at the expense” of its customers.
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