Adam Back, Blockstream Push to Enforce $28M Bitcoin Award Against InnoSilicon
Cryptographer and early Bitcoin developer Adam Back, along with two affiliated companies, is asking a U.S. court to enforce a $28 million arbitration award against Chinese chipmaker Innosilicon, alleging the company knowingly supplied defective Bitcoin miners.
In a petition filed Monday in the U.S. District Court for the Southern (NYSE: SO) District of New York, Malta-based Back, Blockstream Corporation of Canada, and California-based Thigmotropism LLC requested confirmation and enforcement of two arbitral awards issued by the Hong Kong International Arbitration Centre (HKIAC) in December 2023 and February 2024.
The petitioners are seeking a court judgment for the full award amount, plus interest and legal costs.
The dispute stems from agreements signed in early 2018, under which the petitioners collectively paid $20.5 million for Bitcoin miners from Wuhan-based Innosilicon, which no longer appears to be manufacturing Bitcoin ASIC chips.
According to the petition, Innosilicon became aware in March 2018—months before delivery—that the machines had hidden cracks in their chips, rendering them defective. Despite this, the company allegedly completed delivery in September 2018 without addressing the issue.
The HKIAC tribunal found Innosilicon in breach of all three contracts and awarded damages based on the Bitcoin the petitioners claimed to have lost due to the faulty hardware: 425.98 BTC to Blockstream, 1,393.79 BTC to Thigmotropism, and 51.84 BTC to Back.
Based on the evidence presented regarding Bitcoin’s value, the tribunal converted those amounts into U.S. dollars, ordering Innosilicon to pay $5.88 million to Blockstream, $19.23 million to Thigmotropism, and $715,080 to Back.
In addition, Innosilicon was ordered to pay approximately $2.34 million in arbitration costs, with 8% annual interest accruing until the full amount is paid. According to the petition, Innosilicon has not paid any portion of the award to date.
The petitioners are seeking to enforce the award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention. As of now, Innosilicon has not filed a response in the U.S. proceedings.