Bitcoin Mining Firm Sphere 3D Sues Gryphon Digital Over Spoofing Attack – Here’s What Happened

The business partner of Bitcoin mining company Sphere 3D, Gryphon Digital Mining, is being sued for losing nearly $500,000 worth of Bitcoin as a result of a spoofing assault.

The company said that Gryphon CEO Rob Chang sent 18 Bitcoin in January to a scammer posing as Sphere 3D’s CFO. According to a press release on Saturday, eight more Bitcoin were moved using the same procedure a few days later.

In addition, Sphere 3D claimed that Gryphon overstated the computing capabilities of the Bitcoin miner in public disclosures and offered subpar services to its partner.

According to Patricia Trompeter, CEO of Sphere 3D, “Today we filed litigation against Gryphon, the custodial management services provider of our blockchain and cryptocurrency-related services, for materially breaking the Master Services Agreement (“MSA”) we signed into with Gryphon.”

Gryphon has been managing Sphere 3D’s “crypto mining activities” and maintaining the “fiduciary duties of Sphere’s digital assets” since the two companies started working together in August 2021. In exchange for its services, Gryphon receives 22.5% of Sphere’s operating revenue.

The goal of spoofing is to deceive a user into thinking you are someone else. In order to enter a system, steal sensitive data, or launch other assaults, the attack uses false data, such as IP addresses, email addresses, or user credentials.

The most recent statement from Sphere 3D reveals a deterioration in the company’s relationship with Gryphon. The two companies had reportedly discussed merging, but that plan was abandoned in April of last year “due to shifting market conditions.”

According to Trompeter, “today’s filing illustrates that we will not only defend the Company, which we have all fought so hard to steer through the past year, but also that we will not be intimidated or threatened by the likes of Gryphon.”

Regulators Express Concern About Environmental Impact of Bitcoin Mining

Concerns regarding the effects of Bitcoin mining on the environment have been raised by regulators all around the world.

To encourage more openness about cryptocurrency mining and its effects on the environment, US Senator Edward Markey and Representative Jared Huffman announced plans to propose the Crypto-Asset Environmental Transparency Act in Congress last month.

In accordance with the proposed legislation, cryptocurrency mining companies would have to disclose emissions for operations that use more than 5 megawatts of power or “multiple crypto-asset mining facilities that are owned by the same company and each have a power load that is less than 5 megawatts; but have a cumulative power load that is greater than or equal to 5 megawatts.”

Parallel to this, in response to certain high-profile failures last year, US politicians have recently stepped up their efforts to regulate the cryptocurrency business.

The SEC has been particularly tough on cryptocurrency businesses, accusing exchanges, lending platforms, and other digital asset corporations of breaking the law regarding securities.

Before investing in cryptocurrency or indulging in any crypto affair, contact a cryptocurrency development company beforehand!