Bitmain could have to pay $5 million because of a lawsuit

Yet another lawsuit has been launched in the USA, but it would surprise you who it is against. Judging by the fact that there’s a large title right above this text, I’m sure already know that Bitmain, one of the largest crypto mining companies are being sued by an American. But Bitmain is in China right? How is the guy suing? Well, let’s find out.

Is this even legal?

First things first, who is the plaintiff? His name is Gor Gevorkyan, a resident of Los Angeles, California. He claims that Bitmain has tampered with some mining setups that help to siphon directly back to them and not the owner. Although it could take a lot of time to set up this system, Bitmain has the technology to do it.

Although it is weird seeing that a case like this, where an individual and a company from different countries are being judged in a local court. But, the US has jurisdiction on this as the plaintiff is seeking more than $5 million as a reimbursement. The fact also entails that there were other people affected by this, hundreds of thousands of people in fact, but why hasn’t anyone complained so far?

What happened?

According to Gevorkyan, he had purchased some mining gear, including the Antminer S9, who is rumored to be outdated at this point and is being sold in weight, rather than units. Nonetheless, Gevorkyan was able to configure the hardware, install it and make it start working, but according to his words, the device didn’t generate any money for him, in fact, it generated money for Bitmain.

The complaint says the following that, the ASIC devices take sometimes hours or sometimes days to configure and install in the according to fashion. Before all of the installment processes were completed, the plaintiff accuses Bitmain of generating cryptocurrency for themselves and not the plaintiff himself. According to Gevorkyan, the devices used to have a feature where a person could configure it to put it in “low power” mode, which prevented Bitmain to access the ASIC’s hash power and generate money for themselves. But, the company looks to have looked into that feature and made it so that no matter what the person does to the device, it will still generate some money for Bitmain until it is properly configured.

Simplification

That was a large mouthful was it not? Let me try to simplify the whole thing. You see, about two years ago, when the cryptocurrency madness was just beginning, the devices were not able to generate any sorts of cryptocurrency while they weren’t linked to an existing account. However, now it looks like Bitmain has configured them in a way that before the linkage between the device and the account happens, the device starts operating on full power, sending all of the generated cryptocurrency to Antpool, which is a mining pool made by Bitmain, where most of the hash power of the world is stored.

Sure Bitmain may be a provider of said mining devices, but you’d be surprised to know that it is also a “miner” itself. Which ultimately means that Bitmain is basically creating competitors with every device it sells. After the mining industry slump, Bitmain looks to have referred to drastic measures and made these changes, but they are yet to be proven.

Recommended For You

Konstantin Rabin

About the Author: Konstantin Rabin

Konstantin has been working in the financial services industry since 2011. He is over-viewing various updates in the technology, regulation, and market movements. He's passionate about games and has a cute cat named Dog.

Leave a Reply

Your email address will not be published. Required fields are marked *