More Troubles for Bitmain: Clients File a $5 Million Lawsuit over Unethical Practices

Bitmain, a leading company in cryptocurrency mining, recently landed itself a class action lawsuit for the millions of dollars it gained from each client that bought its Application-Specific Integrated Circuit (ASIC).

According to the leading plaintiff, Gor Gevorkyan, the company pre-configured the crypto mining device (referring to ASIC) to mine cryptocurrency to its account during the outrageous amount of time required to set it up. Gevorkyan stated that while the device was yet to be configured, the company used it to mine cryptocurrency to enrich itself at the expense of the clients. The company carried out this unethical fraudulent practice at full power mode, and thus incurring a huge debt for each client that purchases the device. The plaintiff added that the device continued delivering the mined cryptocurrency to Bitmain’s account until his account was linked to the ASCI machine. You can only imagine how many other clients suffered the same fate.

The unwholesome and manipulative practice forced the hands of Gevorykyan who has insisted that the company pay damage of $5,000,000 to cover for every client it has defrauded. Well, I guess that is in good faith because the so-called crypto mining giant might have used the pre-configuration to amass cryptocurrencies worth more than $5M.

According to the Plaintiff’s filing against both arms of Bitmain entities – the U.S. and China-based entities – at the federal court of the Northern District of California, the defendant (referring to Bitmain) has defrauded over a hundred clients, cost of which amounts to more than $5M. This is without the addition of fees, costs, and interest.

There couldn’t be a worse timing for this lawsuit which came in the heat of crypto meltdown when most crypto miners have hanged their boots awaiting a positive change in the crypto market.

Bitmain is, of course, one of the companies – besides Nvidia – that received the ‘hash’ blow from the crypto meltdown which would definitely lead to a huge amount of loss in investment. That coupled with over $5M class action lawsuit is enough trouble to deal with even for a giant crypto mining firm.

In an email to CoinDesk, the company revealed its intention to clear all accusations saying mining is only a small part of the company’s business and that the company does not {and will never} mine with customer’s equipment. The email says that they are occupied with bigger and better things like shipping the equipment as soon as possible to fulfill any confirmed order.