Gor Gevorkyan, a Los Angeles resident, has filed a lawsuit against Bitmain for allegedly mining cryptocurrency at his expense. The class action claims that bitcoin mining giant had redesigned its ASIC devices “to mine crypto currency for the benefit of itself rather than its customers who purchase the products”.

Bitmain Allegedly Used Customers Resources to Mine Crypto, Says Lawsuit

Defendant Bitmain Technologies is headquartered in Beijing, China, but the Northern California court has jurisdiction over this action because of the amount the plaintiff seeks in damages, which exceeds $5 million, exclusive of interests, fees, and costs.

Gevorkyan says he purchased ASIC devices from Bitmain in January 2018, including an AntMiner S9, with the purpose of mining cryptocurrencies for his own benefit. The lawsuit alleges that the devices were mining digital currencies for the benefit of Bitmain with Gevorkyan’s resources, while he attempted to properly configure them.

In ‘Factual Allegations’, the class action states that Bitmain has recently modified the startup procedure for its ASIC devices in order to start in full power high consumption mode even before customers are able to link it to their account. During that period, Bitmain’s devices mine cryptocurrencies for its own benefit while using customers’ electricity and computing power.

“The default account setting on the Bitmain ASIC devices is set to contribute to Bitmain’s own account on its own Antpool server. As a result of this new practice, Bitmain ASIC devices cost more to operate during the setup phase and transfer virtual currency to Defendant rather than the customers.”

The plaintiff brings the class action on behalf of all persons in the United States who have purchased Bitmain ASIC devices. Grevorkyan estimates this number to be around 100,000 people, which is 0.03 percent of the U.S. population.

“As a direct and proximate result of these acts, Bitmain’s customers have been and are being harmed. Plaintiff and members of the Class have suffered injury and actual out-of-pocket losses as a result of Defendant’s UCL “unfair prong” violation […]”

Grevorkyan seeks an order requiring Bitmain to cease the unfair competition, full restitution of all expenses, interests at the highest rate allowed by law, and the payment of his attorneys’ fees and costs to the procedure. Additionally, Bitmain is required to “disgorge all monies, profits, and gains which it has obtained and will unjustly obtain at the expense” of its customers.

Bitmain, one of the world’s largest cryptocurrency mining companies, is experiencing a rough patch as of lately, with the lawsuit being the most recent event. Its business risks facing a significant decline in sales volumes due to the tariffs on Chinese products imposed by the Trump Administration.

The company is also undergoing a restructuring of its board of directors ahead of its imminent IPO on the Hong Kong Stock Exchange (HKEX).

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