Bitmain, the world’s largest maker of bitcoin mining equipment, is facing a lawsuit from hosting provider, Old Const.
Old Const alleges that Bitmain Technologies Georgia Limited, a US affiliate of the company, terminated their hosting contract without an appropriate reason. It claims that Bitmain fabricated breaches of their agreement to terminate the partnership.
In the lawsuit filings, Old Const wrote that Bitmain “fabricated purported breaches in order to terminate the agreement immediately.” The notice of termination, issued on August 22, is described by Old Const as a material and anticipatory breach of the parties’ contracts.
Old Const seeks injunction against Bitmain
Old Const signed a Hosting Services Agreement (HSA) with Bitmain in November 2024 to provide data center hosting for Bitmain’s HASH Super Computing Servers.
The lawsuit also references additional agreements, including a Collaboration Agreement, a Sales Agreement, and an OnRack Sales & Purchase Agreement. All of which include clauses requiring disputes to be resolved in Texas courts or through arbitration in Houston.
Old Const alleges that Bitmain went beyond simply ending the partnership and actually threatened to seek a court order, known as a “writ of replevin,” to seize its mining equipment.
According to the complaint, Bitmain wants to obtain the order from a court outside of Texas. Since the HSA contract clearly requires that all legal disputes be handled in Texas, Old Const states that this move would violate the terms of their contract.
The lawsuit filings say, “Despite the mandatory forum selection provisions, Bitmain has threatened to seek a writ of replevin or possession from a court outside of Texas, in violation of the HSA and the other agreements’ exclusive forum selection clauses.”
To stop Bitmain from bypassing the agreed dispute process, Old Const is asking the court to issue a Temporary Restraining Order and an injunction. This would block Bitmain from obtaining any seizure order outside Texas.
The hosting provider stresses that without an injunction, Bitmain could attempt to take away the essential mining equipment that Old Const depends on to continue operating.
In addition, Old Const is also asking the court to confirm that the parts of the contract about handling disputes in Texas and through arbitration are valid. It wants the court to force Bitmain into arbitration for issues that don’t need urgent court orders.
On top of that, Old Const is seeking money to cover its losses, plus extra costs caused by Bitmain’s actions, and it wants Bitmain to pay its legal fees.
This is not the first time Bitmain has had a dispute with a hosting provider. Last year, Bitmain took JWKJ Technologies to court. It said the hosting provider broke their contract by failing to keep miners running 95% of the time. Bitmain also accused JWKJ of redirecting power for its own profit.
When Bitmain tried to recover its equipment, JWKJ declined. The mining rigs maker accused JWKJ of illegally holding $15 million worth of mining equipment.
Bitmain was founded by Chinese-born Singaporean billionaire Jihan Wu. In June, Cryptopolitan reported that Bitmain, along with other mining companies Canaan and MicroBT, is planning to build their mining rigs in the US to avoid Trump’s reciprocal tariffs.Last month, Bitmain sold 16,290 ASIC miners to the American Bitcoin Corp. for a staggering $314 million.
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Source: https://www.cryptopolitan.com/bitmain-lawsuit-breach-hosting-agreement/
