Bitcoin miner, Blockware, sued for deception and fraud

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Crypto Regulation
Bitcoin miner, Blockware, sued for deception and fraud

The London-based private firm, Faes & Company Limited, has filed a lawsuit against the bitcoin (BTC) miner firm, Blockware Solutions LLC.

Faes, in a lawsuit filed at the United States District Court Northern of Illinois, accuses Blockware of “breach of contract, negligence, deceptive trade practices, and fraud.” 

The law firm also argues that the miners purchased, from Blockware, $525,000 worth of services. In their contracts, they agreed that the bitcoin miner will host equipment on their “allegedly owned” servers “in exchange for monthly hosting and energy fees.”

Blockware, however, “did not actually own” any server facilities when both firms reached an agreement, per the lawsuit. Instead, Faes believes that the mining firm used “third-party facilities” for hosting the miners.

“As a result, Faes’ miners under Blockware’s management and control have experienced prolonged downtime and inoperability due to lack of power, resulting in significant loss of revenue,” a lawsuit document filed on December 17 reads in part.

According to the plaintiff, Faes & Co. demands compensatory charges while claiming losses of up to $250,000.

Crypto.news has requested an official comment about the latest accusations. In his response, Blockware CEO Mason Jappa wrote:

“In relation to Faes filing a lawsuit, we disagree with it wholeheartedly. This former client made false claims/statements in his case about our company and the situation. We are a client-first company seeking win-win situations for our clients. We have honestly served this industry for over 5.5 years.”

Mason Jappa, Blockware CEO

Other sources within the company that preferred to remain anonymous added that Blockware’s legal team was handling the case.

Bitcoin mining faces troubles in late 2022

In the meantime, the crypto mining bill in Russia was delayed as the country’s parliament cites “capital flight risks.” The latest delay comes while the bitcoin hash rate dropped by 35% on December 25.

According to reports, the BTC mining hash rate plunged from 237 EH/s — exa hashes — to 156 EH/s.

While data shows that the bitcoin mining’s difficulty rate finally dropped, one of the largest crypto mining firms, called Core Scientific, filed for Chapter 11 bankruptcy protection last week. The filing came as the miner was still generating a positive cash flow which was not enough to repay the company’s debts.

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