Bitmain Sues Missouri Defendants for Return of Over 4,000 Bitcoin Mining Machines

News | July 9, 2024 By:

On Tuesday, June 25, 2024, Bitmain Technologies Georgia Limited filed a lawsuit in the United States District Court for the Western District of Missouri seeking damages and return of approximately 4,513 bitcoin mining machines they claim were unlawfully removed from their control and possession.

Bitmain, a mining hardware manufacturer based in China, alleges in their complaint that they entered into agreements with a company called Blockquarry Corp. beginning in mid-2021 to have Blockquarry host and operate Bitmain’s mining machines at a data center facility in Gaffney, South Carolina. Under the agreements, Bitmain delivered the machines to the South Carolina facility between February and April 2022.

However, problems allegedly began in January 2023 when the owner of the South Carolina facility cut power to the data center and restricted access. Bitmain states they terminated their agreement with Blockquarry in April 2023 due to the power outage issues. Bitmain claims they intended to retrieve their mining machines immediately, but Blockquarry did not allow them access to the facility.

Bitmain is now suing Hylmen LLC, a Wyoming company, and Shawn Vaught, an individual residing in Missouri. Bitmain alleges that in November-December 2023, Defendants conspired with Blockquarry to transport Bitmain’s mining machines across state lines to a property owned by Hylmen in Crocker, Missouri without Bitmain’s authorization. Two additional locations in Missouri are also alleged to contain some of Bitmain’s machines.

Since that time, Bitmain claims Defendants have refused full access to inspect all the machines and have denied returning the machines to Bitmain’s possession, despite repeated requests. Bitmain conducted a limited inspection in December 2023 where some machines displayed damage from exposure and rust. However, Bitmain was not able to audit all machines.

The lawsuit seeks monetary damages for wrongful conversion of the machines, in the millions of dollars in total value. Bitmain also requests a court-appointed receiver to immediately take control of the mining machines, citing concerns that the machines’ condition will deteriorate further without proper power and environmental controls.

Bitmain’s complaint alleges that the Defendants’ refusal to cooperate with inspection requests raises serious questions about their motives.

Please contact BlockTribune for access to a copy of this filing.