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wilslaw

Lawsuit claims that the mining of Bitcoin by Bitmain was done utilizing customer devices

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For the past couple of years, Bitmain has been taking advantage of its customers, according to a class-action lawsuit filed in the US district court for Northern California. 

 

According to one Bitmain customer and bitcoin miner, the first period during which a miner is in its owners' possession is spent mining for the benefit of Bitmain. According to the lawsuit brought by Gov. Gevorkyen, the initialization process for a Bitmain miner could take some hours.

 

Per filing, it is impossible to know the number of people represented in the class-action lawsuit because they could possibly amount to "hundreds of thousands". Furthermore, it notes that the operation of Bitmain doesn’t follow this pattern: when miners were in  "initialization" mode, less power could be consumed.

 

The court will the place to prove the allegation in the suit, and if they seem to be true, Bitmain's defense could make use of the good old terms and conditions of a purchase.

 

Nelson M. Rosario in his weekly "Crypto Caselaw Minute" explained that “If these allegations are true (and we are not saying that they are) … that’s, that’s not good. Even under some sort of theory that customers agreed to this under the terms & conditions of their purchase, or something like that, this is not a good look regardless of its legality. With respect to its legality, the plaintiff is alleging unfair business practices, unjust enrichment (receiving a benefit at someone else’s expense), and conversion (basically stealing).”

 

It would appear that if Bitmain makes a settlement in the case, anybody who bought a miner in the qualifying period would be eligible for damages. What we don’t know is, if those who bought them second hand would be eligible as well.

 

In response to the allegation, an external Bitmain spokesperson informed CCN that the company does not mine making use of customer devices: The spokeperson said “Bitmain does not use customer devices to mine, mining for itself has long been a part of Bitmain’s business and it has always been transparent. You can find further information on its transparency policy here and hashrate disclosure here .”
 

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