Cracked Chips and Multi-Million Losses: Inside the Innosilicon Controversy

Investigations reveal that Innosilicon detected cracking issues in its mining chips as early as March 2018 but continued shipping products. According to filings, the resulting losses for third-party firms, including Blockstream, exceeded $20M. Adam Back submitted evidence showing the devices failed to meet stated performance specs.

A Hong Kong arbitration found the ASIC defects caused significant BTC shortfalls. Plaintiffs now seek a U.S. court order to freeze Innosilicon’s assets and enforce judgment payments.

Experts believe this could set an industry precedent: manufacturers may face stricter oversight and be required to disclose defects promptly.