Old Const Sues Bitmain Over Hosting Contract Dispute

Bitmain Faces Legal Challenge from Hosting Provider

Bitmain, a leading global manufacturer of Bitcoin mining equipment, is currently involved in a legal dispute with Old Const, a hosting provider. The conflict centers around the termination of a hosting contract between the two parties, with Old Const claiming that Bitmain terminated the agreement without just cause.

Old Const alleges that Bitmain, through its US affiliate Bitmain Technologies Georgia Limited, fabricated breaches of their agreement to end the partnership. In the lawsuit filings, Old Const states that Bitmain "fabricated purported breaches in order to terminate the agreement immediately." The notice of termination, issued on August 22, is described by Old Const as a material and anticipatory breach of the contracts between the parties.

Legal Actions and Contractual Disputes

Old Const signed a Hosting Services Agreement (HSA) with Bitmain in November 2024, which outlined data center hosting for Bitmain’s HASH Super Computing Servers. The lawsuit also references additional agreements, including a Collaboration Agreement, a Sales Agreement, and an OnRack Sales & Purchase Agreement. These documents include clauses requiring disputes to be resolved in Texas courts or through arbitration in Houston.

According to the complaint, Bitmain has gone beyond simply ending the partnership and has threatened to seek a court order known as a “writ of replevin” to seize Old Const’s mining equipment. This move would allow Bitmain to take possession of the equipment without following the agreed-upon dispute resolution process.

The lawsuit filings state, “Despite the mandatory forum selection provisions, Bitmain has threatened to seek a writ of replevin or possession from a court outside of Texas, in violation of the HSA and the other agreements’ exclusive forum selection clauses.” To prevent this, Old Const is requesting the court to issue a Temporary Restraining Order and an injunction. This would block Bitmain from obtaining any seizure order outside of Texas.

Financial and Operational Concerns

Old Const emphasizes that without an injunction, Bitmain could attempt to remove the essential mining equipment that the company relies on to continue operating. Additionally, Old Const is asking the court to confirm that the parts of the contract about handling disputes in Texas and through arbitration are valid. It wants the court to force Bitmain into arbitration for issues that don’t require urgent court orders.

In addition to these requests, Old Const is seeking monetary compensation for its losses, as well as extra costs caused by Bitmain’s actions. It also wants Bitmain to cover its legal fees.

Previous Legal Conflicts

This is not the first time Bitmain has faced legal challenges with hosting providers. Last year, Bitmain took JWKJ Technologies to court, accusing the hosting provider of breaching their contract by failing to keep miners running 95% of the time. Bitmain also claimed that JWKJ redirected power for its own profit.

When Bitmain attempted to recover its equipment, JWKJ refused. The mining rigs maker accused JWKJ of illegally holding $15 million worth of mining equipment.

Company Background and Recent Developments

Bitmain was founded by Chinese-born Singaporean billionaire Jihan Wu. Recently, it has been making moves to expand its operations in the United States. In June, reports indicated that Bitmain, along with other mining companies Canaan and MicroBT, is planning to build its mining rigs in the US to avoid Trump’s reciprocal tariffs.

Last month, Bitmain sold 16,290 ASIC miners to the American Bitcoin Corp. for a staggering $314 million. This transaction highlights the growing interest in Bitcoin mining infrastructure and the strategic positioning of major players in the industry.