A class action lawsuit filed against troubled bitcoin startup KnCMiner is proceeding despite a recent legal setback and a bankruptcy filing by the firm.

According to emails provided to CoinDesk, lawyers representing the most prominent of several class action lawsuits filed against KnC have entered a claim against its bankruptcy estate in Sweden. Further, they indicated the group has provided information to local law enforcement in an attempt to ensure the firm can provide customer reparations.

An email to class action participants reads:

“We have handed over all claims with the verifications to the criminal authorities for them to initiate the process of freezing KnC assets to cover your claim.”

The legal move comes amid what appear to be continued efforts by claimants after a verdict was rendered that KnC customers were businesses, not consumers, a finding that prohibited class action participants from obtaining consumer protections and reimbursement.

At the time of KnCMiner’s filing, management claimed that it would no longer be able to compete in the race for bitcoin rewards following an upcoming network rule change. Notably, the firm is not insolvent and it remains unclear if the bankruptcy will mark the end of the company’s operations or if it will restructure.

Called a ‘halving’ event, the upcoming change will find the amount of rewards paid to new miners dropping from 25 BTC to 12.5 BTC, a 50% decrease in potential profitability should the price not rise to offset the loss.

Once one of the larger bitcoin mining firms, KnC raised $32m in venture funding for its mining hardware products.

However, the company faced continued customer criticism for allegedly defective products and shipping issues that eventually forced it out of the business-to-consumer hardware market.

Representatives from KnCMiner did not respond to requests for further details.

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