Bitmain’s ASIC Devices Under Fire: A $5 Million Class Action Lawsuit Explained

Bitmain Sued Over Alleged Unfair Practices

In a plot twist that even the most dramatic of soap operas would envy, Bitmain, a cryptocurrency mining heavyweight, is facing a class action lawsuit demanding a staggering $5 million. The lawsuit was filed in the North District Court of California and centers around allegations that Bitmain mined cryptocurrency on its customers’ devices without their consent and ultimately, without benefiting the unsuspecting users.

Meet the Plaintiff: Gor Gevorkyan

The lead plaintiff, Gor Gevorkyan, residing in sunny Los Angeles County, claims that after purchasing Bitmain’s devices in January 2018, he found his experience to be less of a mining adventure and more of a mining nightmare. Gevorkyan purchased an S9 Antminer, only to discover that while his new toy was trying to figure itself out, it was busy munching up his electricity bills like they were candy.

Initialization Blues

According to Gevorkyan’s allegations, the infamous “initialization” period that Bitmain’s ASIC devices require is not just a mere formality—it’s a sneaky strategy to use the customer’s power to mine crypto for their own gain. Who knew a simple setup could feel like an unauthorized robbery? The complaint notes, “Until the complicated and time-consuming initialization procedures are completed, Bitmain’s ASIC devices are preconfigured to use its customers’ electricity.” It’s like having a house guest that refuses to pay rent but makes themselves at home.

What’s at Stake

With Gevorkyan claiming that he suffered “ascertainable and out-of-pocket losses,” the stakes are now higher than ever. He’s not just looking for a shiny check; he’s representing all Bitmain clients who might have faced similar injustices. In the shadow of a potentially successful IPO, this lawsuit could topple Bitmain from its current status as the king of the mining mountain.

The Timing Couldn’t Be Worse

As if that’s not enough, Bitmain’s troubles are compounded by recent U.S. sanctions on Chinese goods. This move puts a strain on their mining rigs manufactured in China, which account for over half of their revenue. It’s like being on a sinking ship and discovering you forgot the life jackets.

The Future of Bitmain

With the shadow of a hard fork fallout from Bitcoin Cash looming over it, Bitmain finds itself tethered to a precarious rope. The company has reportedly seen losses due to significant investments in cryptocurrency assets. Adding fuel to the fire, several rumored investors, including prominent names such as SoftBank and Tencent, have publicly denied their participation in Bitmain’s IPO. Talk about being ghosted at the altar of a mega public offering!

Conclusion

As this story unfolds, one thing is clear: the criticism surrounding Bitmain’s operational practices raises some serious questions. Will the mining giant withstand this storm, or will it be remembered as a cautionary tale in the crypto mining world?