California Chipmaker Accused of Engaging in $23M Elaborate Deception Exposing Coinmint to Damages

In a new court filing, the New York-based crypto-miner, Coinmint accused two semiconductor firms of orchestrating a fraud scheme “elaborate deception.” The Coinmint reported the prominent tech firms Katena and DX Corr for developing a dubious scheme.

The Coinmint lamented that the scheme under probe lured the miner to purchase a Bitcoin mining rig amounting to $150 million.

Nature of Katena and DR Corr’s Elaborate Deception 

The miner admitted that Katena and DR Corr implemented deceptive promotions to sell mining rigs that were not delivered. In their submission, the miner demanded to be compensated $23 million to cater for the damages.

On March 26, Coinmint filed a lawsuit against the two tech firms at a court in Santa Clara, California. The court reported an official from Katena was accused of misconduct by “improperly influencing” Coinmint to fall for the $150 million sale of Bitcoin mining machines.

In the court filing, the unnamed individual was alleged of utilizing deceptive approaches such as bribes and incentivized co-conspirators to lure the miner. A former Coinmint employee is alleged of collaborating with the DX Corr team.

According to California regulations, the involved parties allegedly engaged in fraud and violated the law. The report illustrated that the persons under questioning had violated their contract agreement and acted against their fiduciary duty.

Will Coinmint be Compensated?

On the other hand, the Coinmint team regretted depositing around $23 million to acquire the mining rigs. In their argument, the Coinmint group urged the court to take legal action and force Katena and DX Corr to compensate them for the damages.

Responding to Coinmint’s allegation, a spokesperson from Katena revealed that the firm plans to engage in advanced talks with the miner. The spokesperson argued that Coinmint was involved in violation of the sale contract. He added that Coinmint’s failure to settle the agreed payment exposed Katena to losses.

The Katena team plans to disclose all the crucial information about the sale of the mining rigs during the impending arbitration process. The Katena team plans to observe the arbitration process and meet the confidential requirements for the Coinmint case.

At the beginning of May, DX Corr urged the court to dismiss the Coinmint claims since they lacked sufficient evidence. A scrutiny of the court filing revealed that the Katena and DX Corr case was not the first lawsuit filed by Coinmint.

In an earlier court report, it was reported that Ashton Soniat and his childhood friend Prieur Leary rivaled over the ownership of Coinmint. Afterward, the miner submitted a lawsuit against Plattsburgh for a utility bill.

Review of Coinmint Court Filling

The case was presented at the New York Public Service Commission when Coinmint intended to avoid settling for a deposit related to an electricity bill.

In a separate court filing, Coinmint was charged for engaging in tax cheats. According to a report shared by a source close to the matter, it was reported that Coinmint Puerto Rico was involved in tax fraud. This case was settled by signing a confidentiality agreement between Coinmint’s head office and the Puerto Rico authority.

In March last year, the San Juan municipality accused Coinmint of tax evasion. The San Juan authority tasked the experts to probe the case. Before this, Coinmint’s former chief financial officer Michael Maloney engaged in dialogues in the bid to acquire new equipment.

Maloney evaluated multiple sales options offering mining machines that provide cutting-edge solutions. Per the Katena sale plan, it was observed that the firm was selling revolutionary machinery that would create value for the Bitcoin mining sector.

During their negotiation for the purchase, the Katena team applied elaborate deception to persuade Coinmint founder and the current chief executive Ashton Soniat to buy the mining machines.

A report from the probing team revealed that the Katena team had planned to offer Maloney a new position as the CFO if the sale went as planned. In May 2021, the Coinmint CEO signed the sale agreement, which required the miner to make regular payments to Katena.

Under the sale agreement, Coinmint was required to pay $150 million to Katena, excluding the customary protection charges.

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