Bitcoin miner startup HashFast could be forced to liquidate

This HashFast board is no longer for sale.

HashFasts already terrible situation just got a lot worse.

The Bitcoin miner manufacturer-turned-chipmaker never fulfilled a $6 million deal with Bitcoinmining firm Liquidbits, whichfiled a slew of new documents in federal bankruptcy court in San Francisco on Wednesday.

HashFast: We are evaluating our options and preparing our response."

Absent the immediate appointment of a trustee to realize the value of the [Bitcoin mining] chips, there may be nothing left in the estate to liquidate by the time an order for relief is entered, Liquidbits argues in one of its filings.

Liquidbits CEO Gregory Bachrach alleges that HashFast is currently attempting to sell off its remaining inventory of Bitcoin mining chips to a foreign companydespite a binding arbitration order that forbids it from doing so. Neither HashFast nor its attorneys responded to Ars repeated requests for comment.

10 days ago, a different group of five customers filed an involuntary bankruptcy petition against the fledgling San Francisco startup. That was the first step in an attempt to recover more than $330,000 in payments that were apparently never fulfilled. The new filings tack onto that existing involuntary bankruptcy case.

The involuntary bankruptcy filing came days after HashFasts CEO told Ars that his company was as poor as church mice. Prior to that, the company fired half of its staff and declared were not scammers.

In early May 2014, Ars profiled the San Francisco startup and chronicled the numerous arbitration cases and lawsuits that the company has pending against it. Many customers have accused the firm of outright fraud, and some are upset that when the company failed to fulfill its orders, it would not refund the amount in bitcoins as it had previously promised.

In a declaration to the court, Liquidbits CEO Gregory Bachrach writes that his company had placed a $6 million order with HashFast as of October 3, 2013 to acquire Bitcoin hardware constituting a total of three petahashes per second.

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Bitcoin miner startup HashFast could be forced to liquidate