Riot Platforms agreed to pay $20 million to SBI Crypto, a subsidiary of Japan’s SBI Holdings, settling a lawsuit that had sought over $350 million in damages and had been running since 2023.
What the Case Was About
The dispute traces back to a 2021 colocation agreement at Riot’s Whinstone facility in Rockdale, Texas. SBI Crypto alleged that Whinstone misrepresented its capacity to host Bitcoin mining operations, resulting in delayed deployments and damaged equipment. The legal claims included breach of contract, fraud, and negligent bailment.
SBI’s original damages claim was already substantial at over $175 million in lost profits plus $50 million in equipment costs. The company later attempted to increase the total damages request to over $350 million. At that figure, the case represented a potential liability that would have been significant even for a company of Riot’s size.
The trial began in the Western District of Texas. Eight days in, the parties reached a settlement.
The Court Ruling That Changed the Math
The settlement didn’t happen because the case was going well for SBI. A February 2, 2026 court ruling took Bitcoin’s appreciated price out of SBI’s damages model, which was a critical blow to the size of the potential recovery.
SBI’s damages calculation had apparently included the Bitcoin that would have been mined but wasn’t due to the alleged capacity misrepresentation, valued at prices reflecting Bitcoin’s appreciation since 2021. Bitcoin has risen significantly from 2021 levels to current prices near $67,000. A damages model that includes that appreciation on unmined Bitcoin produces a dramatically larger number than one based on contemporaneous prices.
When the court excluded appreciated Bitcoin values from the calculation, SBI’s potential recovery contracted substantially. A case that might have been worth fighting to a verdict at $350 million looks different when the maximum realistic recovery is a fraction of that. The settlement for $20 million, roughly 6% of the original $350 million claim, reflects that recalibration.
What It Costs Riot
Twenty million dollars is a real cost. For context, Riot reported record annual revenue of $647.4 million for 2025, covered earlier this week. The settlement represents approximately 3% of that annual revenue. Manageable, but not trivial.
The timing matters too. Riot is in the middle of an aggressive AI infrastructure expansion, with the AMD data center partnership generating revenue since January 2026 and the first 112 megawatts of Corsicana data center capacity scheduled to begin construction in Q1 2026. A $20 million cash settlement removes a legal overhang at a moment when the company is trying to attract institutional partners and capital for that transition.
The alternative, continuing through trial with a damages model that had been partially limited but still carried meaningful uncertainty, carried its own costs in management attention, legal fees, and potential liability. Paying $20 million to close a three-year dispute that started at $350 million is not a great outcome. It is probably a better one than the alternatives available after the court ruling.
