Bitmain Faces $20.8M Lawsuit Over Tennessee Hashrate Deal

Bitmain has been sued by 1969 LLC for $20.8 million over an “on-rack” Bitcoin mining contract in Tennessee, accusing the company of breaching its hashrate sale agreement.

Wyoming firm accuses Bitmain of contract breach

Bitmain Technologies is facing a new legal dispute in the United States. In a lawsuit filed on September 12, 2025, Wyoming-based 1969 LLC accused Bitmain of violating an April 21 On-Rack Sales and Purchase Agreement.

The deal involved 6,933 Antminer S21 units totaling 1.386 EH/s, priced at $15 per TH/s. The miners were pre-installed at a facility in Puryear, Tennessee (252 TN-140) under an “on-rack” model, where buyers purchase active hashrate instead of taking physical delivery of the hardware.

According to the complaint, Bitmain failed to repair malfunctioning servers, wrongfully terminated the contract on August 22, and attempted to bypass the Houston arbitration clause by threatening local litigation in Tennessee.

Legal action centers on arbitration and equipment rights

The plaintiff is seeking a temporary restraining order preventing Bitmain from seizing the servers, as well as a court declaration enforcing arbitration. The case was filed in the Southern District of Texas and values the dispute at $20.8 million.

The filing adds another location to Bitmain’s U.S. operational footprint, as the company continues to expand its on-rack Bitcoin mining operations across multiple states.

Bitmain’s “on-rack” model grows across U.S. facilities

The Tennessee deployment joins Bitmain’s network of American sites operating under the same “on-rack” model, previously detailed in Miner Weekly’s analysis of the company’s U.S. mining expansion.

Other facilities are located in Texas, Georgia, and Washington State, where Bitmain sells hosted hashrate capacity directly to customers.

Earlier reports indicated that Bitmain also sold hosted fleets to Asia-based investors, including DL Holdings and International Business Settlement Holdings, which acquired operational S21 Hydro miners hosted in the U.S.

These moves highlight Bitmain’s strategy of offloading U.S.-based capacity as North American rig demand cools amid growing global competition in Bitcoin mining.