Crypto Mining Giant Bitmain Faces A $5 Million Lawsuit

Popular crypto mining company Bitmain is in the crypto news today for facing a $5 million lawsuit for allegedly mining cryptocurrencies for its own benefit on the devices of its customers.

The filings were published under the North District Court of California on November 19.

The lead plaintiff Gor Gevorkyan has directed his lawsuit against Bitmain’s China and U.S entities. Gevorkyan alleged that the company is trying to benefit and it is doing that successfully without authorization:

 “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 this case, the filing clearly states that he purchased Bitmain devices in January 2018 and the product was ‘’difficult to configure’’. Before he could finally understand how the product works and right after he initialized his devices, they started operating at a cost-intensive mode at his expense.

The ASIC devices were mining cryptocurrencies from the very moment Gevorkyan turned on the device and the device would start transferring cryptocurrency to the Defendant’s address. This is why, in the lawsuit, Bitmain is accused of engaging in ‘’an unfair business practice’’.

Gevorkyan is seeking damages for $5 million on behalf of all the miners that are in a similar situation with Bitmain.

This is a very interesting time for Bitmain since they are aiming to raise more than $10 billion in their IPO but have a series of difficulties. Also, the hardware manufacturer could potentially face losses after investing a huge amount of its funds in Bitcoin Cash before its hard fork.