(BlockBar) Cryptocurrency mining giant Bitmain is locked in a legal battle again. This time this legal battle is with three former employees who started a rival mining pool. Bitmain who is the owner of BTC.com is suing the co-founders of Poolin and has demanded $4.3 million in damages from one of them.
To be noted the three Poolin co-founders have already told that they were no longer bound by the non-compete. It was Bitmain that invalidated their contracts for failing to pay compensation on time as agreed. The main dispute is of the roles the three Poolin founders played in Bitmain’s flagship mining pool BTC.com. It is also about the non-compete agreements they signed when they decided to leave Bitmain.
According to one of the founders, Zhu, the three proposed to launch BTC.com as a parallel service within Bitmain back in 2015. However, the idea was not initially supported by Bitmain. So, the three had to develop and roll it out on their own using Pan’s own capital at the beginning. Around mid-2017, the three collaborators left Bitmain. Bitmain would pay monthly compensation to Pan after his departure of about $2,780 for 24 months.
After their departure from Bitmain, Pan, Zhu and Li launched Poolin. It was launched as mining pool for multiple cryptocurrency assets in November 2017. To be noted, Poolin was the third biggest operation by hash rate in the world. All the miners connected to Poolin had mined 26,825 bitcoin. Its worth is $220 million at today’s prices. Based on the current distribution of bitcoin’s network computation Poolin’s share of the hash rate has dropped to about 8.2 percent, and its rank has fallen to No. 7.
Bitmain has also alleged that such conduct violated the non-compete agreement. He demanded Pan to return all the paid compensation along with a fine of $667,000 for reneging. To be noted, this is not the first time Bitmain has had a legal dispute with former senior executives. It sued Zuoxing Yang in 2017. Yang was a former Bitmain chip design director who left to launch Bitewei over patent rights infringement.
John Danie is a highly experienced marketing strategist and businessman in the blockchain industry who likes the pace of the development of cryptocurrency, especially in blockchain technology where it can move so fast. Being a fintech writer and crypto reporter with a fascination for tech and a passion for starting interesting conversations, he seeks to create authentic news stories in the industry.