A recent legal dispute has arisen between Sphere 3D and Gryphon Digital Mining, concerning financial allegations made by Gryphon against Sphere 3D. According to a court document obtained by Cointelegraph, Sphere 3D has dismissed Gryphon's claims of imminent financial collapse, labeling them as deceitful.

In response to Gryphon's request to the United States District Court for the Southern District of New York to block millions of dollars from Sphere 3D, the latter refuted the accusations. Gryphon had raised concerns about Sphere's financial stability, especially after Sphere received $10 million in equity proceeds from a settlement related to Core Scientific’s bankruptcy exit. However, Sphere 3D insists that it holds $45 million in assets and $5 million in liabilities, as per its 2023 Annual Report.

Despite the ongoing legal battle, the two parties were previously engaged under a Master Service Agreement (MSA) since 2021, where Gryphon was the exclusive provider of management services for Sphere’s blockchain and cryptocurrency operations. The relationship soured in April 2023 when Sphere accused Gryphon of an alleged spoofing incident that led to the unauthorized transfer of 26 Bitcoin.

As the litigation continues, Sphere 3D aims to seek damages exceeding $25 million from Gryphon, citing the latter's alleged failure to file a proof of claim in Core Scientific’s bankruptcy case as a key issue. The legal complexities surrounding Gryphon's dealings with Core Scientific have further complicated Sphere's efforts to recover its deposits.

The ongoing legal dispute underscores the challenges faced by crypto miners amid a market downturn between 2022 and 2023. It has also shed light on the financial difficulties Gryphon Digital Mining may be experiencing, influencing its actions against Sphere 3D in the courtroom.