A Chinese court denied bitcoin mining giant Bitmain's request for $ 30 million in damages from the three co-founders of Poolin, one of the world's largest cryptocurrency mining pools. The sentence was issued on appeal on August 31 and published on September 8.
The end of a long cause
The court's final decision marks the closure of a one-year lawsuit. The court accepted Beijing-based Bitmain's appeal to increase fines against Poolin co-founders for violating non-compete agreements they had entered into with their former employer, the Bitmain BTC mining pool. .com.
Therefore, Pan Zhibiao, Li Tianzhao and Zhu Fa are required by the court to pay fines of approximately $ 200.000, $ 178.000 and $ 154.000 respectively. But the court denied Bitmain's largest $ 10 million compensation claims from each of the three that Bitmain said would offset its losses from Poolin's breach of non-compete agreements.
The $ 30 million is much more than the initial $ 4,3 million request in April 2019. The Beijing Haidian District Court had issued an initial ruling that there was a violation of the agreements by the three, which had activated the mining pool of bitcoin Poolin during the 24-month non-compete period that started in August 2017.
In that case, minor damages had been given to Bitmain for the breach, denying Bitmain's $ 4,3 million claim. The mining giant later filed an appeal demanding higher fines and an increase in the total damage claim to 210 million yuan, or $ 30 million, from the three.
An unjustified request
Bitmain's attorneys argued in a hearing in August that Poolin made about $ 30 million in revenue from his bitcoin mining pool fees during the non-compete period. Given that Bitmain's pools accounted for around 30% of the market share during that time, Bitmain had said that the three co-founders would have to repay an amount proportional to those revenues.
Poolin's lawyers argued in response that the case was brought to trial at a time when market shares of Bitmain's mining equipment and mining pool operations had both declined.
Therefore, the lawyers said, even if Poolin had not acted in any way, it is not certain that the revenue would necessarily have gone to the two pools of Bitmain, BTC.com and Antpool, in proportion to their market share as there are many other players on the pitch.
The court said in its latest ruling that Bitmain had not provided sufficient evidence that its business losses due to the breaches outweighed the fines and, as such, denied the $ 30 million claim.
