Crypto Mining company Blockware has beeen charge with a $250,000 lawsuit by Faes a London based company over miners which were purchased and did not deliver the expected output.
On December 17, a London-based company named Faes & Company filed a case against the cryptocurrency mining company Blockware Solutions LLC, alleging that it had overstated the performance potential of its miners and lacked sufficient power access to keep the machines operating.
Plaintiffs demand both compensatory and punitive damages, alleging losses of $250,000.
The parties allegedly signed agreements in October 2021 for Faes to purchase Bitcoin miners and associated hosting services totaling $525,000. In exchange for a monthly hosting fee and energy charges, Blockware would purportedly host Faes’ miners at one of its server locations.
However, according to the complaint, Blockware “did not really own or run a facility to host the miners and was not capable of doing so reliably” at the time of the agreement. It also mentioned:
“Further, to the extent Blockware had access to third-party facilities to host and manage the miners, the facilities lacked reliable power (likely due to a limiting contractual arrangement with their energy supplier), so the operation of the miners was and is regularly subject to interruption or “curtailment.” 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.”
In the lawsuit, Faes further said that the computers were purchased at January, when a Bitcoin (BTC) was worth more than $45,000, and were to be delivered to and housed in Blockware’s premises. But the rigs didn’t start operating until April. The lawsuit further stated:
“Problems with downtime began approximately two days after Faes’ miners first came online and have persisted throughout 2022, resulting in numerous complaints and support tickets by Faes. Despite these problems, Blockware hosts and updates a public “status page” that shows persistent high uptime at its facilities, including the Pennsylvania facility where Faes’ miners have been hosted, showing consistent 100% uptime for the preceding 90 days.”
The Pennsylvania plant saw “roughly 50 days of prolonged power restriction” in September and October, according to the lawsuit, despite the depiction of “100% uptime.”
The crypto winter and a rise in energy prices have severely hurt the profitability of bitcoin mining operations. According to Hashrate Index, the top 10 Bitcoin mining debtors together owe around $2.6 billion.
