Two firms have found themselves embroiled in a court battle over unpaid invoices totaling millions of dollars, in the latest high profile case to erupt in the sector.
Genesis Mining Iceland is being sued by payments firm Digital Capital after it was alleged the former came up short on £2.4 million (US$3.1 million) owed over the development of credit card software. Now Genesis Mining Iceland is arguing Digital Capital failed to provide software with the required capabilities, other than delivering “peripheral functionality”.
The firms began working together back in 2018, forming a joint venture to offer debit card payments powered by digital currency. However, Digital Capital alleges Genesis failed to keep up payments from November 2018.
As BTC prices dropped like a stone from $20,000 highs to $3,200, Genesis was reported to be among a number of digital currency firms finding themselves in financial difficulties.
Digital Capital alleges their decision to halt payments resulted in £2.4 million owing, as well as lost profits set to be felt until 2022. As a result, the firm is seeking £6 million in damages.
In response, Genesis is not countersuing Digital Capital, suing for the recovery of money paid for a platform it says Digital Capital ultimately failed to deliver. Digital Capital dismissed the claims against it, arguing that Genesis had failed to provide appropriate documentation to develop the software.
Founded in 2013, Genesis Mining was set up by entrepreneur Jakov Dolic. Dolic’s other ventures include the recently launched U.S. mining company Layer1, which was setup with the mission of repatriating 30% of BTC hash power by 2022.
The firm launched in February, running multiple shipping container mining farms out of a central facility in Texas. The launch follows a Peter Thiel-led funding round, in which the company raised $50 million for startup from October 2019.
The court battle is set to continue over the coming weeks, as the firms wrangle over the unpaid sums. It remains to be seen whether the court will compel payment.
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