Riot’s Whinstone US Seeks Over $1M in Damages from JV Partner

Riot Platforms’ subsidiary, Whinstone US, has filed a lawsuit against its former partners in a joint Bitcoin mining venture, citing significant revenue discrepancies and alleged misconduct. This legal action follows a series of disputes that have plagued the partnership since its inception, according to Cointelegraph.

Whinstone US, the operator of one of the largest mining facilities in the United States, has accused three companies and their executives of engaging in fraud, conspiracy, and securities violations. These accusations stem from a joint venture (JV) formed in 2020 with Delaware-based Imperium. Whinstone US provided up to 130 megawatts of discounted power, while Imperium handled infrastructure at the Rockdale, Texas facility.

Despite withdrawing from the JV the same year, Whinstone US was assured 12.5% of the mining profits in exchange for ongoing discounted power worth approximately $2 million monthly. However, Whinstone US claims Imperium undermined this agreement by creating new corporate entities, selling them to investors, and thus diluting Whinstone’s share of the profits. Furthermore, the suit alleges that Imperium restructured the JV to siphon off revenue for other business interests.

Whinstone US, acquired by Riot Platforms in May 2021, filed the lawsuit in the 153rd District Court of Tarrant County, Texas. The company is seeking monetary relief exceeding $1 million, with expectations for this amount to rise post-discovery.

This legal confrontation isn’t new for the parties involved. In May 2023, Riot sued Rhodium for $26 million over unpaid hosting and service fees. Later in November 2023, Whinstone US cut off Rhodium’s power and access to the facilities, leading Rhodium to obtain a temporary injunction that was subsequently overturned.