The cryptocurrency miner Sphere 3D has filed a lawsuit against its partner Gryphon Digital Mining after an alleged spoofing attack led to the irregular transfer of Bitcoin (BTC)according to court documents dated April 7.
“Today we have filed litigation against Gryphon, the provider of custody management services for our blockchain and cryptocurrency related products, for materially breaching the Master Services Agreement (“MSA”) that we entered into with Gryphon.” , said Patricia Trompeter, CEO of Sphere 3D in a statement to investors, adding that “Gryphon has placed the Company’s assets at significant risk and has willfully violated its contractual duties”.
According to the complaint, Gryphon CEO Rob Chang allegedly sent BTC on January 18 to a scammer posing as the CFO of Sphere 3D via a spoofing attack. A few days later another eight Bitcoin were sent to the same address.
In a spoofing attack, an attacker tries to trick a system or user into thinking they are someone else by falsifying data.such as IP addresses, email headers, or user credentials, to gain access to a system, steal sensitive information, or launch other attacks.
In comments to Cointelegraph, Gryphon’s Chang said the company is “aware of the complaint and we look forward to vigorously defending it.”“. He also noted that:
“While we cannot comment on pending litigation, we are confident that our forthcoming response to the complaint—and the documents and other evidence that will come to light in the wake of it—will speak for themselves.”
Sphere 3D and Gryphon have been partners since August 2021. Gryphon is charged with managing Sphere 3D’s “cryptocurrency mining activities” and maintaining “fiduciary duties to Sphere’s digital assets.”says the statement. As payment for this work, Gryphon receives 22.5% of Sphere’s gross profits.
Sphere’s statement also suggests that the relationship between the companies, which once considered a merger, has deteriorated. Trumpeter noted that the lawsuit shows that “we will not be intimidated or threatened by people like Gryphon”. The executive stated that:
“Gryphon has not acted with integrity, has broken our contract, and we will hold them accountable.”
Cointelegraph reached out to Sphere 3D, but did not receive an immediate response. Both companies claim to be committed to growing net carbon neutral cryptocurrency mining operations.. A merger agreement between the two companies was finalized in April 2022.
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