A class action lawsuit has been filed against Bitmain, accusing them of mining at the expense of buyers via Antminer S9.
Los Angeles resident Gor Gevorkian is the lead plaintiff in a recently filed lawsuit against Bitmain. Gevorkyan bought Antminer S9 in January 2018. This rig is produced by Bitmain, the largest manufacturer of specialized crypto rigs.
The lawsuit includes many details regarding the initial setup process of the Bitmain ASIC installation. According to the lawsuit, previously, Bitmain ASIC devices were run in a low-power mode until the user completed their initial setup, “initialization,” and began using them to mine cryptocurrency. Only after the installation was completed and the device was linked to the buyer’s account, the mining process and work at full capacity began.
According to Gevorkian, Bitmain has changed the startup procedure for its ASIC devices so that they immediately start in full power, high power mode before a customer account is associated with the device and run in that mode until the setup process is completed. At the same time, the complex initialization process can take from several hours to several days, and all this time the Antminer S9 works, mining cryptocurrency. Additionally, the account setup on the Bitmain ASIC devices is set to its own Bitmain account on its own Antpool server. Thus, during the equipment setup period, the device mines cryptocurrency for Bitmain, and the buyer pays the electricity bills.
The accusations formulated in the lawsuit could have quite serious consequences for the company if proven. The amount of the claim is estimated at $5 million from defrauded miners from all over the world. The exact number of people who have united to file a lawsuit is not yet known, but we can talk about hundreds and thousands of buyers. If you count all the hash power they gave up in favor of Bitmain during this setup, the figure will be quite large.
It is too early to say whether the miners will be able to prove their claims, but if the court accepts their arguments, then Bitmain will face serious charges of unfair business practices and unfair enrichment and conversion.
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