Cryptocurrency Miner Sphere 3D Files Lawsuit Against Its Partner Gryphon Digital Mining After Alleged Spoofing Attack Leads to Irregular Bitcoin Transfers, according to court documents dated April 7.
“Today, we filed a lawsuit against Gryphon, our managed managed services provider for blockchain and cryptocurrency-related services, for a material breach of our Master Services Agreement (“MSA”) with Gryphon,” said Sphere 3D Chief Executive Patricia Trompeter said. , adding in a statement to investors, "Gryphon placed the company's assets at significant risk and willfully breached their contractual obligations." According to the complaint, Gryphon CEO Rob Chang allegedly wired 18 BTC to fraudsters posing as Sphere 3D’s chief financial officer in a spoofing attack in January. A few days later, another eight bitcoins were sent to the same address.
In a spoofing attack, an attacker attempts to trick a system or user into believing they are someone else by forging data such as IP addresses, email headers, or user credentials in order to gain access to a system, steal sensitive information, or further launch an attack . In comments to Cointelegraph, Gryphon’s Chang stated that the firm “is aware of the complaint and looks forward to defending it vigorously.” He also stated: "While we cannot comment on pending litigation, we believe our forthcoming response to the complaint — and the documents and other evidence that will come to light after the fact — will speak for itself."
Sphere 3D and Gryphon have been partners since August 2021. Gryphon manages Sphere 3D’s “cryptocurrency mining activities” and maintains a “fiduciary responsibility for Sphere’s digital assets,” the statement said. Gryphon receives 22.5% of Sphere's gross profits as compensation for this work.
Sphere's statement also suggested that relations between the companies that had been considering a merger had soured. Trompeter noted that the document shows that “we will not be bullied or threatened by the likes of Gryphon.” According to the executive: "Gryphon failed to act with integrity and to honor our contract and we will hold them accountable."
