$150 Million for Chips That Never Shipped: Coinmint v. Katena

What Happened

In 2021, near the top of the market, Coinmint ran one of the largest mining sites in the country at a former aluminum plant in upstate New York. That year it signed a purchase agreement worth about $150 million with a startup called Katena Computing for new miners, and paid roughly $23 million in deposits. The machines were built around a chip that was still in development. No miners were delivered.

Coinmint took Katena to arbitration. It alleged the deal had been pushed through improperly and claimed Katena had influenced Coinmint's own chief financial officer. According to CoinDesk's report on the award, in February 2024 the arbitration panel rejected Coinmint's claims and awarded Katena just over $14 million on Katena's counterclaim. The panel found that Coinmint's executives had chosen the purchase on their own.

As reported, Coinmint had paid about $23 million in deposits, received no machines, and was ordered to pay Katena just over $14 million. Coinmint separately sued a chip design firm in California over the same deal, alleging it had been deceived.

Why I Follow This Story

I follow this case because it sits at the point where hardware engineering and contract terms meet. Buying miners carries known risks even with established manufacturers such as Bitmain, MicroBT, and Canaan: large deposits paid up front, delivery dates that move, and machine prices that can fall sharply between order and arrival. This case added another layer. The order was for machines built on a chip that was still in development when the contract was signed. Other ASIC purchase and delivery disputes have involved customs holds and late shipments.

Getting a new mining chip from design to a working, efficient, mass produced machine takes years, large amounts of capital, and access to a small number of foundries that many companies compete for. The 2021 market, when mining margins were high, saw strong demand for new hardware and large orders across the industry. Even when machines do exist, getting them into the country carries its own risk, as the Antminer customs detentions showed.

Issues This Case Raises

The public reports do not describe the full terms of the Coinmint and Katena agreement. The points below describe terms that sometimes appear in ASIC purchase agreements, and open questions that orders like this one tend to raise.

• Evidence of working hardware. Some purchase agreements tie deposits to working sample units, independent test results, or evidence of a foundry allocation. Others rely on published specifications. Which approach applies depends on what the parties negotiated.
• Deposit structure. Some contracts release deposits at milestones such as tape out, working samples, production start, and shipment; others take a single deposit up front. Sellers of new designs often need early capital to fund development, while buyers want to limit what they have at stake before delivery. The structure reflects how those interests were balanced.
• The dispute forum. This dispute was decided in private arbitration under a clause fixed when the contract was signed. Parties choose arbitration for reasons such as privacy and specialized decision makers, and choose court for reasons such as broader appeal rights and public records.
• Internal approvals. Coinmint alleged that Katena had influenced its chief financial officer; the panel found that Coinmint's executives chose the purchase on their own. How a buyer's internal approval process worked became a factual question in the case.

Disputes over ASIC orders often turn on technical questions, such as whether the hardware was ready and whether the stated specifications were achievable. Arbitration panels hear those questions from experts, and that process is described on the crypto arbitration expert page.