On March 25, Gryphon Digital Mining took legal action to block Sphere 3D from using $10 million from a recent settlement with Core Scientific. Gryphon filed a pre-motion letter with the U.S. District Court for the Southern District of New York to request permission for a motion for prejudgment attachment to secure the funds.

The conflict between Gryphon and Sphere goes back to August 2023 when Gryphon disputed Sphere’s allegations in a lawsuit. Sphere accused Gryphon of a cyber attack that resulted in the transfer of 26 Bitcoins to a false account. Rob Chang, Gryphon’s CEO, reportedly transferred 18 Bitcoins in January to a fake account impersonating Sphere 3D’s CFO, with another eight Bitcoins sent days later. The total loss was over $500,000.

Sphere is accused of violating exclusivity agreements by forming hosting agreements with other providers. A pre-motion letter was filed based on Sphere’s financial state, as bankruptcy is a possibility. Gryphon seeks to ensure funds are available for potential judgments totaling at least $30 million.

Sphere reported a net loss of $23.4 million in 2023, less than the previous year's $192.8 million loss due to market fluctuations. Gryphon and Sphere were partners until Sphere sued Gryphon over the alleged spoofing attack. Gryphon claims negligence on Sphere’s part allowed the scam to occur.

Gryphon’s request aims to secure the $10 million equity proceeds recently obtained by Sphere. The former partners' dispute arose from the alleged cyber incident involving the Bitcoin transfer. The information presented in this article is for informational purposes only and does not constitute financial advice, investment advice, or any other professional advice. Trading stocks, cryptocurrencies, or related indexes always come with financial risks.