Sphere 3D Sues Gryphon Digital Mining Over Alleged Bitcoin Spoofing Attack and Breach of Contract

Bitcoin mining firm Sphere 3D has filed a lawsuit against its business partner Gryphon Digital Mining, accusing the company of losing approximately $500,000 worth of Bitcoin due to a spoofing attack. Sphere 3D claims that Gryphon CEO Rob Chang sent 18 Bitcoin to a fraudster impersonating Sphere 3D’s CFO in January, followed by an additional eight Bitcoin a few days later.

Sphere 3D also alleges that Gryphon misrepresented the Bitcoin miner’s computing power in public disclosures and provided subpar services. “We believe that Gryphon has put the Company’s assets at significant risk and willfully violated their contractual duties,” said Patricia Trompeter, CEO of Sphere 3D. The complaint was filed in the Southern District of New York.

The two companies have been collaborating since August 2021, with Gryphon managing Sphere 3D’s crypto mining activities and maintaining fiduciary duties of Sphere’s digital assets. Gryphon receives 22.5% of the gross profit from Sphere’s operation for its services. At one point, the duo even contemplated a merger, which was ultimately canceled in April last year due to changing market conditions.