SBI Crypto, a subsidiary of Japanese corporation SBI Holdings, has taken legal action against Whinstone US data center in the District Court of Texas.
The mining company has alleged that Whinstone withheld crucial information from its customers, drew up unreasonable contracts, failed to comply with hosting service agreements, and did not disclose confidential data.
SBI Crypto’s legal team claims that Whinstone did not adhere to industry standards and deliberately misled the mining company about the certificates and licenses required for hosting equipment and providing hosting services.
The data center allegedly lacked a building permit, and contracts for sufficient electricity supply were not signed, according to an SBIC representative.
The Whinstone data center’s management was also accused of neglecting the transferred mining equipment.
During an inspection, SBIC staff discovered high levels of dust buildup and signs of corrosion, despite the center’s management’s assurances of compliance with all operating regulations.
The misrepresentation of the data center’s readiness for mining operations and non-compliance with equipment maintenance resulted in millions of dollars in losses due to delays and damage recovery, according to SBI Crypto.
In 2021, the American mining company Riot Blockchain acquired Whinstone for $651 million.