TAAL Distributed Information Technologies Inc. has been removed from arbitration in a dispute between two third parties over a purchase of hashing equipment. The dispute, between Tansley Equipment Limited and an unnamed hosting provider, concerned payment and delivery for US$3.9 million worth of hashing equipment used in Bitcoin transaction processing.
In March 2020, TAAL said the dispute would not have any impact on its business plans for 2020. In a statement at the time, it said the equipment was not intended for deployment until later in the year, and it had alternate sources for the equipment in the event of any delay.
TAAL had argued that it was not part of the dispute and not properly a party to the matter in question. The arbitration panel agreed that the company was not within the jurisdiction of the arbitration proceedings. The arbitration tribunal agreed with TAAL’s position and has officially removed it. TAAL CEO Jerry Chan said:
We are pleased that the arbitration tribunal agreed that TAAL was not properly a party to the arbitration proceeding. This is a positive result for TAAL and we will continue to focus on our strategic vision and the growth of our business.
What was it about?
At issue was the purchase and delivery of over 50,000 hashing machines, referred to as “cloud computing assets.” Under an agreement closed in March 2020, the hosting provider would release the equipment to TAAL as well as Tansley, Fractical Sense Limited and Laser Lollypop Limited.
The three latter companies are affiliated with TAAL shareholder Calvin Ayre, founder of Ayre Group and CoinGeek. Part of the agreement involved the transfer of 2,279,215 non-voting participating shares in TAAL to Mr. Ayre which TAAL currently holds as security, which would have reverted back to TAAL’s treasury if the equipment was not delivered “free and clear of liens” by September 4, 2020.
The hosting company claimed it had not been fully paid after termination of a hosting agreement it had with Tansley, and had refused to release all the hashing equipment. However some of the equipment had already been released for delivery to TAAL.
TAAL had said it did not see the dispute as a significant issue, and the parties had agreed to arbitration in New York rather than seeking a resolution through the courts.
Under a separate services agreement from November 2019, a TAAL subsidiary provides management and operational services to certain companies affiliated with “the Principal” (Mr. Ayre). Although this subsidiary may advise or act on Tansley’s behalf under this agreement, that subsidiary was not directly involved in the current dispute.
TAAL’s focus for 2020 and beyond
TAAL is focused on delivering services that aim to serve a new digital economy. In its five-year corporate vision released in June 2020, it stated these would include Bitcoin transaction processing, data storage, computing services and other business concerning Internet of Things (IoT) technology.
This is in addition to operating a transaction processing pool that aims to include more participants in the industry.
The company expects the transaction processing business to become far more sophisticated with the simple “block reward mining” associated with digital assets in the past (and currently is still, in the worlds of BTC, BCH and similar blockchains). TAAL’s Bitcoin vision involves a heavier emphasis on large-scale data processing for enterprise, government institutions and other large entities both in and outside the world of finance.
Bitcoin’s unlimited block sizes make such an industry possible, and TAAL is at the forefront of its evolution. It is also seeking to professionalize the transaction processing industry through use of its Miner API (M/API), which allow for provable/auditable block signing, formation of a transaction fee market, and guaranteed service level agreements for clients.
Editor’s note: This article has been updated.
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