Xnergy Financial Accuses MakerStar, CleanSpark of Cutting it Out of Multi-million Dollar Crypto Mining Sales

On Friday, April 12, 2024, investment banking firm Xnergy Financial filed a breach of contract lawsuit against cryptocurrency mining company MakerStar Capital and its affiliate Coinmaker Miners in Los Angeles Superior Court. The lawsuit alleges that MakerStar and Coinmaker failed to pay Xnergy success fees for brokering multi-million dollar deals to sell MakerStar’s bitcoin mining facilities to another crypto firm, CleanSpark.

According to the complaint, Xnergy and MakerStar entered into exclusive corporate finance agreements in January and April 2023 whereby Xnergy would provide merger and acquisition services to MakerStar and be entitled to a 7% fee on any deals it facilitated. In February 2023, Xnergy introduced MakerStar to CleanSpark to discuss CleanSpark’s potential purchase of some of MakerStar’s bitcoin mining farms. This led to CleanSpark acquiring two facilities from MakerStar for $9.3 million in June 2023.

However, the complaint claims that MakerStar and its affiliate Coinmaker then cut Xnergy out of subsequent deals. In February 2024, CleanSpark announced it had purchased additional MakerStar mining assets for $19.8 million. As the broker for this deal through the earlier agreement, Xnergy alleges it was owed $1.386 million in success fees but was not paid. The lawsuit also notes that CleanSpark announced another pending $6.87 million deal to close in April 2024, for which Xnergy would be due $480,900 if the deal goes through.

Xnergy is suing MakerStar and Coinmaker for breach of contract, claiming they violated the exclusivity terms of the agreements by negotiating directly with CleanSpark without Xnergy. The company is seeking over $2 million in damages plus legal fees from MakerStar and Coinmaker. Xnergy also named CleanSpark as a defendant, accusing the company of tortious interference with the Xnergy-MakerStar contracts by working around Xnergy on subsequent deals despite knowing about the exclusive arrangements.

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