Swedish Court Rules Against KnCMiner Mining Hardware Customers

A legal effort to sue bitcoin mining firm KnCMiner over product refunds has been dealt a blow in Sweden, court documents reveal.

The suit traces back to public furor related to the Titan, a mining product developed and released by KnCMiner in 2014 that was designed to confirm transactions for non-bitcoin cryptocurrencies like litecoin, a process known as mining.

Anger among the firm’s customer base over delayed shipments and hardware problems sparked controversy and the rumblings of legal action. The situation led to accusations of fraud and misrepresentation, allegations of which formed the heart of the suit filed in Sweden.

This particular case, one of as many as three publicly known legal efforts begun against KnCMiner, was tried on behalf of 11 individuals, including three based in Sweden.

Documents provided to CoinDesk show that the recent suit against KnCMiner ran into problems related to what rights as consumers those customers had. The court ruled on 29th April that the plaintiffs involved should be considered businesses, not consumers – a key determination that effectively cut them off from seeking redress from the consumer perspective.

Joakim Stringert, who represents the plaintiffs, explained to CoinDesk:

"The main reason we lost is because the court judged that the plaintiffs weren’t consumers. And the reason for that was because we said that, these machines you can own and use them for making money. And the purpose of the purchase can only be to make money. So, therefore, the court deemed the plaintiffs to be businesses."

The court further ordered the plaintiffs to pay KnC’s legal costs, amounting to 772,000 krona, or approximately $93,000.

While Stringert said he is appealing the decision on the legal costs, he said there was no immediate plan to appeal the broader court judgment on the grounds that the risk of losing – and bearing even more legal costs – is too high, given the decision pertaining to the customers being businesses.

Path forward uncertain

KnCMiner's Sam Cole told CoinDesk that his firm “won on all counts”, and was awaiting word on the outcome of the legal cost appeal. He also drew contention with the case put forward by the plaintiffs, going as far as to accuse them of presenting false evidence.

"The one thing I will say is the other side had a lot of nonsense and fake evidence they tried to put in front of the court," he said in an email.

In interview, Stringert highlighted a separate class action lawsuit that, according to local reports, is also moving forward. However, he struck a pessimistic tone when asked about the future direction of the lawsuit he represented.

"I can see a few openings here, but it’s nothing I would bet on. And I can’t risk my client’s money, because if we appeal the judgment itself and we lose again, the legal costs will be even higher," he said, adding:

"It’s a really sad day for Swedish justice."

The full (Swedish language) court decision can be found below:

TR T 14917-14 Dom 2016-04-29 by CoinDesk

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