Bitcoin Mining Class Action Lawsuit Alleges Breach of Contract

Advanced Mining Technology Inc., a company selling bitcoin mining hardware, has been hit with a class action lawsuit accusing the company of failing to deliver the promised hardware, costing consumers thousands of dollars.

According to the class action lawsuit, Bitcoins are “a type of digital or virtual currency that can be traded for goods and services with third parties who accept them,” and are worth approximately $460.00 each. Bitcoin mining refers to “a process by which computer hardware is used to obtain bitcoins by processing mathematical calculations.”

Lead plaintiffs Craig Lenell, Thomas Urbanek and Jared Pela allege in the Bitcoin class action lawsuit that the bitcoin mining hardware they purchased from Advanced Mining Technology was not delivered within the specified time frame or never delivered at all. Further, plaintiffs claim that delays in delivery of bitcoin mining hardware made it more difficult for them to acquire new bitcoins. “Not only does the mathematics of the bitcoin system become progressively more difficult, but bitcoin mining becomes increasingly more competitive, making the opportunity to profit from bitcoin mining more challenging and more dependent on the quality of the mining equipment,” they allege.

The plaintiffs argue that timely delivery of bitcoins is essential when it comes to bitcoin mining. “The longer one waits to begin the process, the more difficult it becomes to acquire new bitcoins” the class action lawsuit says. “Accordingly, the Defendants’ systematic delays in the delivery of Bitcoin Miners have effectively decreased their value. … Notwithstanding these pervasive delivery problems, Defendants continue to advertise quick turnaround deliveries and accept new orders while failing to fulfill and/or refund existing customer orders. After a customer places an order, Defendants assure them that the Bitcoin Miner will be delivered within a certain time frame, typically six weeks or less; however, Defendants fail to adhere to its communicated delivery schedule. Therefore, Defendants’ statements are materially and knowingly misleading.”

The plaintiffs, residents of Utah, Florida, and North Carolina, allege they purchased Bitcoin mining hardware for several thousand dollars in 2013 from Advanced Mining Technology. The Bitcoin class action lawsuit alleges that Advanced Mining Technologies failed to deliver the promised hardware and when plaintiffs asked for a refund, “Defendants continue[d] to exhibit an unwillingness to refund customers for the Bitcoin Miner orders that were never received, or compensate Class Members who suffered lost opportunity as a result of delayed delivery.”

“Dissatisfied customers have attempted to communicate with Defendants by phone, email, and in person to request delivery updates and/or demand refunds, but Defendants have been unresponsive and ignorantly obstinate that they are purportedly fulfilling orders,” the class action lawsuit says.

Further, plaintiffs claim “Defendants’ improper and illegal business practices extend beyond just their failure to deliver Bitcoin Miners that have been paid for in full by the Class. In reaction to warranted consumer complaints, Defendants have demanded that members of the Class refrain from posting and warning other potential customers about Defendants’ failures, and threatened to withhold or further delay delivery of products or promised refunds to the members of the Class. Moreover, all indications are that Defendants’ operations are a sham, and, at minimum, Defendants lack the capability to meet the demand for the orders (and payments) they continue to accept.”

The plaintiffs seek to represent a class of individuals who purchased, but never received, or received with a substantial delay, the Bitcoin mining hardware from Advanced Mining Technology. Plaintiffs allege that these deficiencies in service have cost potential Class Members millions of dollars in damages. The plaintiffs allege Advance Mining Technology’s actions amount to breach of contract, breach of express warranty, common law fraud, negligent misrepresentation, breach of the duty of good faith and fair dealing, unjust enrichment, and violations of trade and consumer laws in Pennsylvania, North Carolina, Florida and Utah.

Plaintiffs are represented by Kimberly Donaldson Smith and Benjamin F. Johns of Chimicles & Tikellis LLP.

The Bitcoin Mining Class Action Lawsuit is Craig Lenell, et al. v. Advanced Mining Technology Inc. (a/k/a Advanced Mining Technologies Inc.), et al., Case no. 2:14-cv-01924, in the U.S. District Court for the District of Pennsylvania, Eastern Division.