Mining giant Bitmain is being accused by a North American citizen of a “sneaky trick” that is affecting thousands of customers. The lawsuit was filed on Nov 19 in the federal court of the Northern District of California

Los Angeles resident, Gor Gevorkyan, is claiming that Bitmain has deliberately formatted mining machines to funnel money back to Antpool, the company’s mining pool, during the initial setup process.

Gevorkyan purchased some mining equipment back in January of this year. He claims the configuration of the devices took him “a significant amount of time,” during which the machines were operational and generating money for Bitmain.

Now Gevorkyan is looking to get a $5 million settlement. Although Bitmain is based in Beijing, the US court has jurisdiction as there are more than 100 plaintiffs. According to Gevorkyan this problem affects more than 100,000 US citizens.

According to the class action document, the ASIC miners were mining at full power mode during the initial set up, which could take as long as several days. This wasn’t always the case as in the past, “Bitmain ASIC devices could be configured and initialized in low-power mode that did not mine cryptocurrency for Bitmain”.

Difficult Time for Bitmain

The lawsuit comes at a difficult time for the mining giant. The recent Bitcoin Cash fork war has likely taken a toll on the company’s profit. The recently imposed U.S. sanctions on Chinese goods are also likely to affect Bitmain, as foreign sales accounted for 51.8% of the company’s 2017 revenue. 

Accused of engaging in “unfair business practices” and of having “unjustly enriched”, Bitmain has denied all claims in an email response to CoinDesk:

“Bitmain does not mine with customers’ equipment and, considering that mining for itself is a small part of Bitmain’s business, it has less incentive to do so compared to shipping the equipment as soon as possible to fulfill any confirmed orders,”