Riot Platforms, the parent company of Whinstone US, recently filed a lawsuit against Crypto Miner Rhodium Enterprises in the Texas-based District Court of Milam County. Riot is attempting to collect an alleged $26 million in unpaid hosting fees that were apparently part of a shared net-revenue agreement. In addition to the fee collection, Riot has asked the court to declare that no power credits relating to demand response programs should be owed to Rhodium.

The lawsuit was first mentioned publicly in Riot's first-quarter earnings report on May 2. The agreement between the two mining companies allegedly occurring in December 2020 mandated that they split net mining revenue from the Whinstone facilities. Despite multiple attempts by Whinstone to secure payment from the Rhodium entities in May 2022 and April 2023, the customer has allegedly failed or refused to meet the payment obligation.

The second main matter of contention for Riot involves the acquisition of power credits. Riot believes that Rhodium's subsidiaries have been collecting these credits as a result of old contracts that have now been superseded by more recent agreements. This dispute has resulted in Riot questioning Rhodium's right to the power credits and has requested that the court make a determination in this regard.

In an effort to remain competitive in the market of cryptocurrency mining, companies must constantly be looking for ways to cut costs and boost profits. This can come in the form of demand response programs that grant energy credits, construction of new mining sites or access to better mining sites. However, disputes can arise if companies do not fulfill their obligations as agreed upon in past contracts.

It appears to be the case for Whinstone US and Rhodium Enterprises in this instance. Riot is currently waiting for the court ruling to determine whether or not Rhodium has to pay the millions of dollars in unpaid hosting fees as well as decide on the applicable energy credits. More information should be released once a verdict is reached.



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