Hosting Provider Sues Bitmain Over Alleged Breach of Contract Agreement

A legal battle has begun in the Bitcoin mining industry as Old Const, a hosting provider, filed a lawsuit against Bitmain, the world’s leading manufacturer of cryptocurrency mining equipment. The suit, filed in response to Bitmain’s alleged wrongful termination of a hosting agreement, accuses the mining giant of fabricating breaches to abruptly end their contract. Old Const claims Bitmain’s actions, including threats to seize critical mining equipment outside Texas jurisdiction, violate the terms of their November 2024 agreement.

Old Const, which purchased Bitmain’s HASH Super Computing Server and agreed to provide hosting services, alleges that Bitmain unjustly terminated their contract. The hosting provider claims Bitmain falsely cited breaches to justify the immediate cancellation of their agreement, a move Old Const argues was baseless and harmful to its operations. The lawsuit further contends that Bitmain threatened to pursue a writ of replevin, a legal order to seize property, in a jurisdiction outside Texas, disregarding the contract’s stipulation that disputes be resolved in Texas courts. Old Const is now seeking a Temporary Restraining Order and an injunction to block Bitmain from obtaining such a seizure order elsewhere, warning that the loss of its “essential” mining equipment could cripple its business.

Legal and Financial Stakes in the Dispute

The lawsuit underscores the high stakes involved in the rapidly expanding Bitcoin mining industry, particularly as the U.S. emerges as a hub for crypto mining operations. Old Const’s filing not only demands protection from Bitmain’s alleged overreach but also seeks damages for financial losses, including legal costs. The hosting provider has requested that non-injunctive disputes be resolved through arbitration, signaling a preference for out-of-court settlement where possible. This legal action comes at a time when Bitmain, founded by billionaire Jihan Wu, is aggressively expanding its U.S. presence, with plans to establish a new facility in either Texas or Florida to capitalize on the growing domestic interest in Bitcoin mining.

Bitmain’s history of legal disputes adds context to the current case. In July 2024, the company sued JWKJ Technologies, another hosting partner, accusing it of failing to maintain 95% uptime for its miners and diverting mining power for personal gain. When JWKJ refused to return Bitmain’s equipment, valued at $15 million, Bitmain alleged unlawful detention, escalating tensions in that partnership. Similarly, Jihan Wu faces a separate lawsuit from Bitcoin pioneer Roger Ver, who claims Wu’s financial services firm, Matrixport, wrongfully blocked $8 million of his funds in 2022 due to personal disputes tied to another company’s losses. Court records indicate that Ver’s case remains active as of 2024, with ongoing proceedings adding to Wu’s legal challenges.

The Old Const lawsuit reflects broader issues in the crypto mining ecosystem, where partnerships between equipment manufacturers and hosting providers are critical yet prone to conflict. As Bitcoin mining gains traction in the U.S., spurred by favorable policies and growing market demand, disputes over contracts and equipment ownership are likely to intensify. Old Const’s push for an injunction and arbitration suggests a strategy to protect its operations while minimizing public legal battles. For Bitmain, the case could impact its reputation and expansion plans, particularly as it navigates multiple lawsuits in the competitive crypto space.