Bitmain Faces Lawsuit Over Alleged Breach of Hosting Agreement

Bitmain, a leading bitcoin mining equipment producer, is facing a lawsuit from US hosting provider Old Const over alleged breaches of a hosting agreement. The lawsuit could affect Bitmain's US expansion plans, but no major market disruptions have been observed in Bitcoin's supply chain or hash rate. Industry insiders view this as a potential short-term obstacle rather than a significant market shift.

Bitmain, the world’s leading producer of bitcoin mining equipment, is embroiled in a legal dispute with US hosting provider Old Const. The lawsuit, filed by Old Const, alleges that Bitmain Technologies Georgia Limited, a US affiliate of the company, terminated their hosting contract without valid cause. Old Const claims that Bitmain fabricated breaches to end the agreement, which was signed in November 2024 for data center hosting services [1].

The lawsuit contends that Bitmain threatened to seize its mining equipment through a writ of replevin from a court outside of Texas, violating the terms of the Hosting Services Agreement (HSA) and other related contracts. These agreements mandate that disputes be resolved in Texas courts or through arbitration in Houston [1].

Old Const seeks a Temporary Restraining Order and an injunction to prevent Bitmain from obtaining any seizure order outside Texas. Additionally, the hosting provider is asking the court to confirm the validity of the Texas arbitration clause and to force Bitmain into arbitration for non-urgent disputes [1].

This is not the first time Bitmain has faced a dispute with a hosting provider. Last year, Bitmain sued JWKJ Technologies over alleged uptime failures and equipment withholding, claiming that JWKJ kept $15 million worth of equipment [1].

Despite this legal challenge, no major market disruptions have been observed in Bitcoin's supply chain or hash rate. Industry insiders view this lawsuit as a potential short-term obstacle rather than a significant market shift. The crypto market's medium-term resilience hinges on a paradox: Bitcoin's hash rate has reached an all-time high (ATH) of over 1,000 EH/s, yet its price remains under downward pressure [2].

References:
[1] https://www.cryptopolitan.com/bitmain-lawsuit-breach-hosting-agreement/
[2] https://coincentral.com/bitmain-hit-with-lawsuit-over-alleged-breach-of-hosting-contract/