Bitmain Sued For Allegedly Mining on Customers’ Devices Without Their Knowledge

In a David and Goliath-type case, crypto mining giant Bitmain is being sued by Gor Gevorkyan, a miner in the U.S. state of North Carolina. Gevorkyan alleges that the company has been using their clients’ mining machines to line their own pockets.

According to Crowdfund Insider, Gevorkyan claims that this is done during the setup process of each machine. According to him, customers would purchase brand-new machines from Bitmain which they would, of course, have to configure. This could last a few hours or even a couple of days. The machines used to start in low power mode and any crypto mined during this time wasn’t directed to any default account.

Serious Allegations Against Bitmain

However, Gevorkyan claims that this has all changed:

Recently, Bitmain modified the startup procedure for its ASIC devices such that the devices immediately start in full power high energy consumption mode before the customer’s account is linked to the device and stay in that mode until the setup process is complete. Moreover, the default account setting on the Bitmain ASIC devices is set to contribute to Bitmain’s own account on its own Antpool server.

He added:

Bitmain’s ASIC devices are preconfigured to use its customers’ electricity to generate cryptocurrency for the benefit of Bitmain rather that its customers…and lay the substantial costs of operating the ASIC devices at the feet of its customers….(resulting in) out of pocket losses.

Gevorkyan appears to be speaking from experience as he has previously purchased Bitmain products.

More Legal Woes

Live Bitcoin News recently reported on the mining company’s expansion to the U.S., where they opened a data center in the state of Washington. However, Bitmain also has an office in California, which is why Gevorkyan believes that courts in Northern California have jurisdiction over the case.

Claims include Bitmain making “… 3-4 billion in operating profits in 2018”, which, if Gevorkyan’s allegations are true, are made up of profits garnered from unknowing customers.

Bitmain is in the process of another court case, this time initiated by themselves. The company alleges that an unknown suspect gained unlawful access to their Binance account relieving it of 617 bitcoins. At the time, this was worth about $5.5 million. However, at Bitcoin’s current price, it is now worth approximately just over $2.2 million.

The company is also in the process of applying to have its shares listed on the  Hong Kong Stock Exchange.

Do you believe Gevorkyan’s claims about Bitmain? Let us know in the comments below!

Images courtesy of Shutterstock, Bitmain