Blockware Solutions Accused by Faes & Co for Fraudulent Transaction
Blockware Solutions confessed to being embroiled in a lawsuit initiated by Faes & Co alleging the provider of Bitcoin mining equipment breached the sale contract. The plaintiff’s filings on December 17 before the federal court in the Northern District of Illinois alleges negligence, deceptive trading, and fraud.
Blockware Accused of Deceptive Trading
Faes & Co. claims that Blockware offered 50 mining rigs for sale at $525,000 despite needing physical ownership. The plaintiff further alleges that Blockware solutions lacked a facility to host miners reliably. The suit documents indicate that the third parties owned facilities that Blockware purportedly could utilize suffered unreliable power, making subpar service inevitable.
Faes argues that miners placed under Blockware Solutions management suffered prolonged downtime. The absence of reliable power rendered miners inoperable and plunged Faes into losses. As such, Faes admitted suffering damages exceeding $250,000.
Delay and Inoperable Machines
The filing before the court indicated that the Faes ordered mining machines that Blockware Solutions would deliver and host in its facilities. Faes added that Blockware failed to honor the delivery time in January when bitcoin mining activities experienced a bullish period. Faes alleges delay and negligence of Blockware solutions as the rigs were available online in April, thereby missing the high profits.
Faes indicated that the machines’ uptime averaged 70% in October, contrary to the 100% advertised by Blockware Solutions. According to the documents filed before the court, Faes submits that the machines encountered operational challenges when availed online. The machines suffered gradual failure before becoming nonoperational in October when Blockware indicated 100% uptime in the 90-day status update. The update was dishonest since it covered the Pennsylvania facility hosting Faes’ rigs in their nonoperational status.
Blockware Counter Suing Faes
Blockware chief executive Mason Japp dismissed the lawsuit terming Christan Faes as baseless. Japp alleges coercion from Faes that Blockware considered grounds for counter-suing him for making false claims. The chief executive added that the filing is motivated by the declining prices that have eroded the rigs’ value.
Jason accused Faes of harassing the Blockware Solutions executives days before filing the lawsuit. He expressed confidence in the suit’s dismissal. He reassured that Blockware Solutions upholds honesty in its five-year operations with no history of cases.
Mining Segment Challenges
Meanwhile, the Blockware Solutions suit reveals an emerging challenge for mining companies accused of operational challenges. Compass Mining suffered delayed deployment of mining machines, forcing chief and financial executives to resign in July 2022.
Clients accused the mining firm of disappointment as thousands of its rigs became stranded in Russia. Sanctions imposed by the EU made the rigs hosted by the local partner inaccessible.
Elsewhere, Core Scientific and Compute North are battling bankruptcy proceedings citing high operating costs. The crypto miners allege that high energy prices and declining Bitcoin prices are worsening their financial position.
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