Bitmain sues ex staffs who started mining firm, seeks millions in damages

17 Jun, 2019
by Fifi Arisandi
News
Bitmain sues ex staffs who started mining firm, seeks millions in damages

Bitmain is again involved in a legal battle with former employees who started a new mining company, citing them as violating non-compete agreement.

Chinese mining company, Bitmain is back on the news with the most recent lawsuit battle they are involved in.

The mining giant is reported to sue 3 former employees who started a new mining company, called Poolin.

According to Coindesk, Bitmain is suing Poolin’s co-founders, they are CEO Zhibiao Pan, COO Fa Zhu and CTO Tianzhao Li for allegedly violating non-compete agreement. The lawsuit seeks for $4.3 million damage compensation from each of the defendants.

The lawsuit made by the Beijing-based company was filed to counter the previous lawsuit made by the former employees, on which they seek to be released from the non-compete agreement.

The three co-founders argued that the non-compete agreement no longer bind them since Bitmain failed to pay their compensation on time as agreed.

To recap, the three co-founders left the company around mid-2017, before which they signed a non-compete agreement. According to the agreement, Bitmain is required to pay monthly compensation of $2,780 to Pan for 24 months, while the amount for the two others are not clearly disclosed.

On November 2017, the three former employees launched Poolin as a mining pool for multiple crypto assets, but it wasn’t until July 2018 when they launch a pool service for Bitcoin.

Poolin has since grown into one of the largest Bitcoin mining pools, right below BTC.com owned by Bitmain and Antpool with 26,825 BTC mined so far.

Bitmain’s attorneys argued that the revenues Poolin generated from mining BTC should be considered a profit made by violating the agreement, which should be paid back as a loss to Bitmain.

Quoting their statement, “Based on the agreement, if it’s difficult to calculate all the direct and indirect loss [for Bitmain due to Poolin’s violation], then the loss should be calculated based on the profits made by the violating party.”

Meanwhile, Poolin’s lawyers said in their defense that the transaction fee the company received from mining Bitcoin doesn’t necessarily translate to profits, neither can the mined Bitcoin considered as a loss for BTC.com.

“There are a lot more bitcoin mining pools in this network. It’s not just Poolin v.s. BTC.com. Even if Poolin didn’t operate its bitcoin mining pool, it does not necessarily mean Bitmain will be able to mine those coins,” the lawyers said.

How will the case turn out? Stick with Chepicap for future updates.

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