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Sphere 3D Sues Gryphon Digital Mining Over Alleged Spoofing Attack

Zach Anderson   Apr 10, 2023 08:04 0 Min Read


Sphere 3D has filed a lawsuit against its partner, Gryphon Digital Mining, over an alleged spoofing attack that led to the irregular transfer of Bitcoin. The complaint, filed on April 7, accuses Gryphon's CEO, Rob Chang, of wiring 18 BTC to a fraudster posing as Sphere 3D's chief financial officer in January. The lawsuit also claims that another eight Bitcoin were sent to the same address a few days later.

In a spoofing attack, an attacker falsifies data, such as IP addresses, email headers, or user credentials, to trick a system or a user into believing that they are someone else. This can give the attacker access to a system, sensitive information, or enable them to launch further attacks.

Sphere 3D CEO, Patricia Trompeter, said in a statement for investors that Gryphon had materially breached the Master Services Agreement (MSA) the companies had entered into. Trompeter accused Gryphon of "willfully violating their contractual duties" and putting Sphere 3D's assets at significant risk.

According to the statement, Gryphon manages Sphere 3D's "crypto mining activities" and maintains "fiduciary duties of Sphere’s digital assets." In return for this work, Gryphon receives 22.5% of Sphere's gross profit as payment.

The relationship between the companies, which were once considering a merger, appears to have deteriorated. Trompeter's statement suggests that the lawsuit was filed because Sphere 3D would not be "bullied or threatened by the likes of Gryphon." She added that Gryphon had failed to act with integrity and to honor their contract, and that Sphere 3D would hold them accountable.

Gryphon has not yet responded to the complaint. A spokesperson for the company said that they could not comment on pending litigation but were confident that their response to the complaint and the evidence that would come to light in the aftermath would speak for themselves.

The incident highlights the risks associated with spoofing attacks and the importance of maintaining robust security protocols. The outcome of the lawsuit will be closely watched by those in the cryptocurrency industry as it may have implications for how partners manage and secure digital assets.


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