Cryptocurrency miner Gryphon Digital is seeking to have a lawsuit filed by its former partner Sphere 3D dismissed over a spoofing attack that resulted in 26 Bitcoins (BTC) being transferred to a fraudulent address.
According to an initial complaint filed by Sphere 3D in April, Gryphon CEO Rob Chang allegedly wired 18 BTC to scammers posing as Sphere 3D’s chief financial officer in a spoofing attack in January. Within days, 8 more bitcoins were sent to the same address, resulting in a total loss of over $500,000 at the time.
However, Gryphon claims to be the victim of Sphere’s “gross negligence,” which allowed malicious actors to access Sphere’s computer systems, send spoofed emails from its domain, and cause Gryphon to send cryptocurrencies intended for Sphere to attacker.
“Sphere’s complete lack of attention to the protection, security, and control of its technical systems resulted in Gryphon sending more than $500,000 worth of bitcoin to hostile threat actors from which Gryphon was unable to recover,” the court filing read. Coins” 18 August.
A spoofing attack is when a hacker impersonates a trusted entity to deceive a system or user. This scam can happen on various platforms such as email or IP address. The goal is usually unauthorized access, data theft, or redirection of malicious activity.
In a previous statement about the lawsuit, Sphere 3D CEO Patricia Trompeter said, “Gryphon placed the company’s assets at significant risk and was in willful breach of contractual obligations.”
In addition to dismissing the allegations related to the asset transfer, Gryphon also brought breach of contract, negligence and defamation claims against Sphere 3D. The lawsuit is the latest phase of a partnership that began in August 2021, with Gryphon managing Sphere 3D’s “cryptocurrency mining activities.” At the time, the two companies planned to merge under the Gryphon brand. However, those plans were quickly dashed and they called off the merger in April 2022, claiming it was a mutual decision.
Cointelegraph reached out to Sphere 3D but did not immediately hear back.
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