Gryphon Digital Mining sues law firm over bankruptcy claim, alleging that K&L Gates’ legal malpractice and overbilling resulted in significant financial losses for the bitcoin mining company. The lawsuit, filed in the U.S. District Court for the Southern District of New York, centers on K&L Gates’ alleged failure to properly handle a bankruptcy claim involving Core Scientific, a major player in the crypto mining industry.
Gryphon Digital Mining, recognized as an industry leader in environmentally responsible bitcoin mining, asserts that K&L Gates and partner Robert Honeywell engaged in improper billing practices that overcharged Gryphon by more than one million dollars. More critically, the complaint claims that the law firm’s oversight in the Core Scientific bankruptcy case resulted in Gryphon missing a crucial claim, directly leading to substantial financial harm for the company.
The legal action highlights the increasing complexity and high stakes of legal representation in the cryptocurrency sector, where missed deadlines or procedural errors can have immediate and costly consequences. According to the complaint, Gryphon relied on K&L Gates for expert legal counsel during the Core Scientific bankruptcy proceedings. However, the firm allegedly failed to file or adequately pursue a bankruptcy claim on Gryphon’s behalf, depriving the miner of potential recoveries and exacerbating its financial challenges during a turbulent period for the crypto industry.
In addition to the missed bankruptcy claim, Gryphon’s lawsuit accuses K&L Gates of systematically overbilling for legal services, further compounding the company’s losses. The complaint details how these billing practices resulted in Gryphon being overcharged by more than a million dollars, raising broader questions about law firm accountability and transparency in billing clients operating in emerging industries like digital assets.
The dispute comes at a time when Gryphon Digital Mining has already been involved in other high-profile legal battles, including a recent lawsuit with Sphere 3D over a disputed bitcoin transfer. In that case, Gryphon sought legal counsel from K&L Gates, underscoring the firm’s central role in the company’s legal affairs. The new malpractice suit, however, signals a dramatic shift in Gryphon’s relationship with its former legal advisors.
Legal observers note that the outcome of Gryphon’s lawsuit against K&L Gates could set important precedents for how law firms manage complex bankruptcy claims in the cryptocurrency sector. The case also draws attention to the importance of robust legal oversight and transparent billing practices for companies navigating the volatile and rapidly evolving digital asset landscape.
As the litigation unfolds, both Gryphon Digital Mining and K&L Gates are likely to face scrutiny from industry stakeholders, investors, and regulatory bodies. The case serves as a cautionary tale for crypto firms about the risks associated with legal representation and the potential fallout from missed opportunities in bankruptcy proceedings.
For now, Gryphon Digital Mining’s legal action against K&L Gates stands as a stark reminder of the high stakes involved when law firms fail to deliver on their professional obligations—especially in an industry where timing and precision are critical to financial survival.
