Bitmain Hit With Lawsuit Over Alleged Breach of Hosting Contract

TLDR

• Bitmain is facing a lawsuit from its former hosting partner Old Const.
• Old Const alleges that Bitmain wrongfully terminated their hosting agreement.
• The complaint states that Bitmain fabricated contract breaches to end the deal.
• Old Const claims Bitmain threatened to seize mining equipment outside Texas.
• The hosting agreement requires all disputes to be resolved in Texas.

Bitmain now faces a lawsuit filed by Old Const, its former hosting partner, over alleged breaches of contract and misconduct. The complaint accuses Bitmain of unjustifiably ending their agreement and attempting to seize key mining equipment. Old Const seeks court intervention to enforce Texas-based dispute resolution and prevent external seizure efforts.

Bitmain Sued Over Hosting Deal Breach

Old Const filed a complaint against Bitmain, citing a sudden contract termination without valid grounds. The parties entered into a Hosting Services Agreement (HSA) in November 2024 for data center hosting. The lawsuit argues Bitmain invented breaches to exit the deal.

The termination notice, dated August 22, is labeled a “material and anticipatory breach” by Old Const. The company argues Bitmain acted in bad faith when ending the partnership. Old Const says,

Bitmain, through its U.S. arm Bitmain Technologies Georgia Limited, allegedly violated multiple agreements, not just the HSA. These include a Collaboration Agreement, a Sales Agreement, and an OnRack Sales & Purchase Agreement. Each of these contracts mandates that disputes be resolved in Texas courts or Houston-based arbitration.

Seizure Threat Escalates Dispute

Old Const claims Bitmain went further than just ending the agreement. It says Bitmain threatened to obtain a writ of replevin outside Texas. This legal order would allow Bitmain to seize its mining rigs from Old Const’s facility.

The complaint insists that any court action must happen within Texas, per the agreed terms. “Bitmain has threatened to seek a writ…from a court outside of Texas, in violation of the HSA,” Old Const stated. It believes this action would breach the exclusive forum selection clause.

Old Const wants a Temporary Restraining Order to stop Bitmain’s seizure attempt. It is also asking the court for a permanent injunction. Without this, it argues, Bitmain may wrongly take the equipment Old Const relies on.

Arbitration and Financial Relief Requested

Old Const is also seeking to confirm the validity of the Texas arbitration clause. It wants the court to compel Bitmain to resolve non-urgent disputes through arbitration. The goal is to enforce the agreed process and prevent forum shopping.

Besides injunctive relief, Old Const seeks monetary compensation. It aims to recover all operational and legal costs caused by Bitmain’s actions. The company is also requesting Bitmain to cover its legal fees entirely.

This isn’t Bitmain’s first hosting dispute. Last year, it sued JWKJ Technologies over uptime failures and equipment withholding. In that case, Bitmain claimed JWKJ kept $15 million worth of equipment.

Bitmain remains a major player in crypto mining hardware. It recently sold 16,290 ASIC miners to American Bitcoin Corp. for $314 million.

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