Tuesday, June 24, 2014

Another Bitcoin Miner Company Gets Sued

Yet another Bitcoin miner manufacturer, CoinTerra, now faces legal action for not fulfilling an order when it originally promised to. CoinTerra is the third Bitcoin-related startup to face litigation for breach of contract and/or fraud in recent months.

The CoinTerra lawsuit was filed in late April 2014 by an Oakland, California-based man seeking to be the lead plaintiff in a proposed class-action lawsuit. Lautaro Cline, the suit alleges, purchased a TerraMiner IV in October 2013 for delivery by January 2014. The company promised, he claims, that this miner would operate at two terahashes per second and would consume 1,200 watts of power. It did neither.

However, Cline’s suit also claims that CoinTerra did not deliver the miner until February 2014, and it “operated well below the speed advertised and consumed significantly more power than CoinTerra represented, causing Plaintiff to suffer significant lost profits and opportunities.”

Neither CoinTerra nor its attorneys responded to Ars’ request for comment.

Cline’s attorney, Edward Mullins, told Ars that his client and CoinTerra are currently seeking mediation—an arrangement that takes place privately and outside of the court system where the two sides negotiate a deal.

“We hope to have it resolved sometime this summer,” Mullins said. “If it doesn’t work out then we will go forward [with the lawsuit.]”

Last week, CoinTerra formally asked the court for more time so it could arrange mediation.

Another firm, HashFast, recently sustained several lawsuits and arbitration cases. As a result, it filed for Chapter 11 bankruptcy protection earlier this month (PDF). Rival firm Butterfly Labs has also been bogged down with similar delays, allegations of fraud, and lawsuits.

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