Cryptocurrency Miner Sues Suppliers for Breach of $927K Transformer Deal
On Thursday, April 18, 2024, Cryptonite LLC filed a lawsuit against Delv Innovations, Cryptech Solutions, and Boundary Electric in Wyoming Chancery Court.
Cryptonite, a Wyoming-based cryptocurrency mining company, had contracted with the defendants in October 2021 to purchase 12 electric transformers for its bitcoin mining operations. Delv Innovations and Cryptech Solutions, both Massachusetts limited liability companies, had promised to deliver the transformers by March 2022 for $927,000.
However, the transformers were not provided until December 2022, over 9 months past the agreed upon deadline. Additionally, upon inspection, Cryptonite found issues with the quality and safety of the transformers. Their experts determined the transformers were substandard, defective, and potentially dangerous.
Further examination revealed the transformers were not actually manufactured by Boundary Electric as had been originally promised and represented by the defendants. Cryptonite had high expectations of receiving industry-standard products from Boundary Electric, a company based in British Columbia. Instead, another company’s logo had been scratched off the transformers and replaced with Boundary’s logo.
The lawsuit alleges the defendants breached their contract by failing to meet the delivery deadline and not providing functional, safe transformers as agreed. Cryptonite also accuses the companies of fraudulent misrepresentation for claiming the transformers were from Boundary when they were not.
As an alternative claim, the complaint states the defendants were negligent in their misrepresentations about the source and quality of the transformers. The suit additionally argues the defendants violated implied warranties that the transformers would be of average merchantable quality and fit for Cryptonite’s particular bitcoin mining needs.
Due to the substantial delays in receiving the defective products, Cryptonite says it incurred significant financial damages and setbacks to its business. It was forced to get replacement transformers from another supplier. The lawsuit is seeking damages that exceed the jurisdictional minimum for the court, as well as attorneys fees and interest.
Please contact BlockTribune for access to a copy of this filing.
