By Michael Scott
The American-based Bitcoin miner Hut 8 confirmed on January 26 filing a Statement of Claim before the Supreme Court in Ontario, Canada. Hut 8 alleges that the Canadian power supplier North Bay is violating the Power Purchase Agreement.
Bitcoin Miner Files Statement of Claim
Last year’s bearish crypto market exposed the mining firm Hut 8 to financial distress. The firm reported a decline in revenue while the operations cost continued to increase. Besides the decrease in income, Hut 8 disagreed with its power supplier Validus Power Supply (VPS) early November last year.
The Bitcoin miner confessed to issuing a default notice to the power supplier Validus Power. The miner regretted that Validus’s energy cost had increased more than the quoted amount in the initial agreement.
Documents filed before the court reveal that the power supplier failed to meet the operational goals per their agreement with the miner.
Days later, after the dispute, Validus halted its power supply and issued a default report demanding the miner settle the outstanding balances. In their submission, the miner dismissed the default notice from the power provider.
According to a November 28 report, the miner announced plans to engage another power provider. The efforts are yet to bear fruit.
Hut 8 and Validus Agreement
In 2021, the Bitcoin miner and Validus entered an agreement that was documented in the Power Purchase Agreement (PPA). Validus was entitled to supply 100 Megawatts to the Bitcoin mining firm. An additional 35MW was to be supplied online at the end of 2021.
Beyond this, the high cost of power and the unstable market influenced Hut 8 to change the production unit. Before the dispute elapsed, it was discovered that the troubled miner had adjusted the system to 0.84EH/S mining capacity attached to more than 8800 AISC Bitcoin miners.
Presently, Hut 8 urges the Court in Ontario to review the PPA and implement the main provision of the document. Such provisions include compensation for the extra cost incurred by the miner.
Bitcoin Miners Battles High Operation Cost
Besides Hut 8 power supply disputes, other Bitcoin miners have been battling an increase in electricity prices that have influenced fierce market competition. High operation cost limits the miners’ ability to generate measurable revenue.
Hut 8 case corresponds to the ongoing dispute between the now-defunct Celsius Network and Core Scientific.