Bitcoin mining firm Sphere3D is suing its business partner Gryphon Digital Mining for losing around $500,000 worth of bitcoins due to a spoofing attack.
The firm accused Gryphon CEO Rob Chang of sending 18 bitcoins to a fraudster pretending to be Sphere 3D’s CFO in January. Days later, another eight bitcoins were transferred using the same method, according to Saturday. Press release,
In addition, Sphere 3D alleged that Gryphon provided its partner with poor services and misrepresented the computing power of bitcoin miners in public disclosures.
“Today we filed suit against Gryphon, our custodial management services provider for blockchain and cryptocurrency-related services, for violating the master service agreement (“MSA”) we entered into with Gryphon, said Patricia Trompeter, CEO of Sphere 3D. Did. In testimony.
“We believe that Gryphon has put the Company’s assets at significant risk and willfully breached its contractual duties.”
The complaint was filed with the Southern District of New York.
The two businesses have been working together since August 2021, with Gryphon managing Sphere 3D’s “crypto mining activities” and maintaining “fiduciary duties for Sphere’s digital assets”. Gryphon receives 22.5% of the gross profit from Sphere’s operations for its services.
Spoofing is the attempt to trick a user into believing that you are someone else. This attack is carried out by spoofing data such as IP addresses, email addresses or user credentials in order to gain access to a system, steal sensitive information, or launch further attacks.
Sphere 3D’s latest statement reflects deteriorating relations between the company and Gryphon. The two had once even considered a merger, which was called off in April last year “due to changing market conditions”.
“Today’s filing demonstrates that we will not only protect the company we have all worked so hard to navigate over the past year, but also that we will not be bullied or bullied by the likes of Griffon,” said the trumpeter.
Regulators Express Concerns About the Environmental Impact of Bitcoin Mining
Regulators around the world have expressed concern about the environmental impact of bitcoin mining.
Last month, US Senator Edward Markey and Representative Jared Huffman revealed Congress intends to reintroduce the Crypto-Asset Environmental Transparency Act to promote greater transparency around crypto mining and its environmental impacts.
The bill would require crypto mining companies to disclose emissions for operations that consume more than 5 MW of electricity or “multiple crypto-asset mining facilities owned by the same company and each with less than 5 MW.” power load; but is “a cumulative power load that is greater than or equal to 5 MW.”
Similarly, US lawmakers have recently ramped up efforts to regulate the crypto industry in the wake of some high-profile failures last year.
The SEC, in particular, is cracking down on cryptocurrency companies, charging exchanges, lending platforms, and other digital asset firms violating securities laws.