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January 13, 2015

C7 Data Centers sues bitcoin firm CoinTerra for $5.4m

The lawsuit alleges that CoinTerra did not pay its bills for data centre services.

By Amy-Jo Crowley

C7 Data Centers has accused customer and bitcoin mining firm CoinTerra of not paying its bills for its collocation, hosting and maintenance services.

The data centre firm, based in Utah, has filed a lawsuit after claiming that CoinTerra failed to keep up with payments on a monthly basis and now owes $1.4m in unpaid services.

According to court filings, CoinTerra signed an 18-month contract with C7 to provide colocation, hosting, monitoring, and management services in April 2014.

"Almost immediately after entering into the contract, CoinTerra fell delinquent, often paying less than the amount required to bring it current. Upon information and belief, CoinTerra often had revenue sufficient to make larger payments to C7," the filings read.

C7 also alleges that CoinTerra’s payment balance was $1.4m in early December, even though it issued weekly invoices about the late payments.

The data centre firm is now seeking $5.4m in damages, which includes court fees, total costs of services for the duration of the contract and other related charges.

"Cointerra’s breach manifests its bad faith as, upon information and belief, Cointerra had the ability to make larger payments but intentionally refrained from doing so knowing that C7 had significant expenses to maintain its services for Cointerra," the filings said.

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