A bitcoin miner has learned the hard way not to build an illegal structure outside of a lease agreement. The CEO of crypto mining company Coinmint, Ashton Soniat, violated the terms of his lease by building electrical transformers in their rented space so that they could harness enough electricity for their mining operation. According to The Block Crypto, they are being sued for breach of contract by Main Mill Street Investments (MMSI), a real estate company that rents office space.
Soniat signed documents to guarantee the prompt payment by Coinmint of “all rents and other payments under the lease”. Allegedly, immediately after the lease was signed, Coinmint started violating its terms.
Their need for electricity led them to building the transformer but they did not let the landlord know, and any question of building it was not included in the lease. The landlord believes this to be a significant alteration to the premises, and is not covered by the lease. Allegedly, there were a number of problems associated with the transition to the new electrical system.
MMSI apparently warned Coinmint more than once that they were in breach of contract due to construction issues related to all of the electrical changes they were implementing. Allegedly, there was snow entering Coinmint’s office space.
A mechanic’s lien was placed on the altered property after Coinmint allegedly did not pay the company that undertook the electrical work for them. Allegedly, they were not paying their rent either. Coinmint will have to present some evidence that there was no damage to their rented office space, that they paid their rent, and that the mechanic’s lien was not valid, or was paid in full.
We Sued First, Argues Coinmint
However, a spokesperson from Coinmint has pointed out that his company actually sued the landlord first. They allege that they were “fraudulently induced into signing the lease and that, in short, Coinmint would not have entered into it without allegedly false assurances that it would be allowed to move into a larger adjacent space”.
Coinmint allege that not permitting this was a breach of contract and that the landlord failure to provide additional space made it it impossible to generate the amount of electricity needed to run its business, which “would dramatically affect” their business and that between January and June 2017, they suffered $8.4 million in damages as their “business is digital currency mining, and this period was one of the most profitable periods in history”.