London-based Faes & Company filed a complaint against crypto mining company Blockware Solutions LLC on Dec. 17, alleging that it misrepresented the capabilities of its miners and lacked adequate power access to keep the machines running.
Plaintiffs claim losses of $250,000 and are seeking compensatory and punitive damages.
According to the complaint, in October 2021, the parties struck deals for Faes to purchase Bitcoin miners and related hosting services worth $525,000. As part of the deal, Blockware would host Faes’ miners on one of its server facilities, which it claims to own and operate for a monthly hosting fee and energy costs.
Related: Public bitcoin mining companies plagued with $4B in collective debt
However, the plaintiff alleges that at the time of the agreement, Blockware “actually did not own or operate, nor reliably have the ability to host, the miners.” It was also noted:
“To the extent that Blockware had access to third-party facilities to host and manage the miners, the facilities lacked reliable power supply (probably due to a restrictive contractual arrangement with their power utility), so the miners’ operations were regular and is subject to interruption or “limitation”. As a result, under blockware management and control, Faes miners have experienced prolonged downtime and inoperability due to lack of power, resulting in significant revenue losses.”
Faes also noted in the complaint that the machines were scheduled to be delivered and hosted at Blockware’s facilities in January, when one bitcoin (BTC) was valued at over $45,000. However, the plants only went online in April. The suit also noted that:
“Downtime issues started about two days after Faes miners first went online and continued throughout 2022, resulting in numerous complaints and support tickets from Faes. Despite these issues, Blockware hosts and updates a public “status page” that shows consistently high uptime at its facilities, including the Pennsylvania facility that housed Faes’ miners, which has had a consistent uptime of 100 for the last 90 days % have shown.”
Despite the reported “100 percent uptime,” a look at the incident history shows “approximately 50 days of sustained power restriction” at the Pennsylvania facility in September and October, the complaint noted.
Blockware Solutions did not immediately respond to Cointelegraphs requests for comment.
Bitcoin mining companies had been hit hard by the crypto winter and a surge in energy costs. Around $2.6 billion is cumulatively owed by just the 10 largest bitcoin mining debtors, according to the Hashrate Index.
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