China says returning 500K miners to Genesis still in-line with crackdown
China’s Supreme Court has ruled a local hosting provider must return nearly 500,000 Radeon RX 470 8GB GPUs to crypto outfit Genesis Mining, ending a years-long legal battle.
Genesis Mining filed a lawsuit to reclaim the property from Chuangshiji Technology in 2019, stating it had refused to return the GPUs — as well as 60,580 AntMiner S9s — over a payment dispute.
Chuangshiji, like other cloud hosts that specialize in crypto, maintains mining rigs and sells the hash power they generate.
According to court docs, Chuangshiji stopped payouts related to the use of those chipsets in September 2018 because Genesis Mining didn’t pay its power bills.
Genesis Mining’s lawsuit was originally trialed in intermediate court. It sided with Genesis — Chuangshiji appealed, but it was denied in 2020.
Chuangshiji then took the matter to the Supreme People’s Court (China’s highest court), where it has now been decided the case won’t be reopened.
In its ruling, China’s Supreme Court noted its decision is still in line with the country’s wider crypto crackdown, despite returning the mining rigs to their rightful owner.
Most of the rigs will go to Genesis Mining’s operations in Hong Kong. Just 100,000 of the GPUs to be directed to its business in mainland China.
Genesis Mining has options
China’s crypto crackdown makes it almost impossible to find local companies to replace Chuangshiji.
Two weeks ago, it was announced Bitcoin mining operations in Yingjiang, China are to be “forcibly dismantled” if authorities find them.
If orders are ignored, the State Energy Bureau has been told to tear down hydropower stations that give electricity to the illegal crypto plants.
And back in June, prices of top crypto mining rigs sunk up to 80% across the mainland. Local miners have reportedly sold chipsets for ‘scrap metal’ rather than risk government wrath.
Instead of selling to other companies, some speculate Hong Kong-headquartered Genesis Mining will flood the market. A global GPU shortage means acquiring older models is common among individual buyers.
If Genesis would rather offload the GPUs than mine crypto with them, second-hand rigs of the same model sell for around $200 to $500 a pop on eBay. Conservatively, that’s a bit over $97 million.
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