Bitmain, the largest manufacturer of cryptocurrency mining equipment in the world, is being sued for USD 5 million in a class action lawsuit filed in the United States District Court of the Northern District of California. Plaintiffs allege that the manufacturer pre-configured rigs to run at full power, directing cryptocurrency mining revenue to itself before users could set up the rigs to point at their own pool.

Reportedly, Bitmain mining rigs in the past would start up in low power mode, giving users a chance to set up their mining pool information and point revenues to their own cryptocurrency address. No default address was included and not much power was used, which was optimal since set up can be a lengthy process.

Plaintiffs allege that Bitmain changed its startup process recently so that rigs now boot up in full power mode and begin mining cryptocurrency immediately. The lawsuit claims that all mined cryptocurrency is sent to an address belonging to Antpool, which is controlled by Bitmain. Because it can take hours or days to initialize and configure a Bitmain device, miners claim that they lose out on a significant amount of mining revenue that is rightfully theirs, in addition to electricity costs. The Antminer S9 uses 1,375W of electricity, the equivalent of using 23 60W light bulbs.

Although the impact on individual miners may appear insignificant, across the 100,000 miners involved in this class action lawsuit, the financial losses are claimed to amount to the millions of US dollars. The lawsuit states, in reference to Bitmain, that “their conduct is substantially injurious to customers, offends public policy, and is immoral, unethical, oppressive, and unscrupulous, as the gravity of the conduct outweighs any alleged benefits”.

The plaintiffs request that Bitmain ceases pre-configuring mining rigs, pay full restitution, pay interest on the cryptocurrency they have collected from this unscrupulous business practice, and pay all attorney fees.


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