Expert-Reviewed Insights and Transparent Editorial Practices
Our editorial content is meticulously curated and vetted by top industry professionals and experienced editors, maintaining transparency and reliability. We adhere to disclosure standards in all our communications.
Mawson Infrastructure Group’s Leadership Shakeup
This summer, Mawson Infrastructure Group’s board took decisive action by severing ties with its CEO amid grave allegations. On May 30, the company issued a notice of termination for “Cause” to CEO Rahul Mewawalla under his contract terms.
Advertisement Banner
Within a few days, Mewawalla was put on administrative leave, and by July 8, he was removed from his board position. Subsequently, a lawsuit was initiated in Delaware’s Court of Chancery. The lawsuit accuses him of fraud and breach of fiduciary duty during his tenure as the leader of the Nasdaq-listed Bitcoin mining company.
Initial Success Followed by Controversy
Reports indicate that just a few months before his dismissal, Mewawalla was awarded $2.5 million in cash bonuses and 1.2 million restricted stock units. His base salary was also increased to $1.2 million. During his leadership, Mawson lauded his achievements, highlighting a 36% increase in revenue, a 35% rise in gross profit, and reductions in SG&A expenses.
However, these accomplishments are now overshadowed by claims of misconduct and shareholder detriment. The unfolding situation raises concerns about governance standards within the cryptocurrency mining sector, where legal accountability is a critical issue.
Interim Leadership Appointed
In response to Mewawalla’s leave, Kaliste Saloom, the company’s general counsel, has been appointed as the interim CEO of the Bitcoin mining firm. Saloom is tasked with navigating the firm through what could potentially be a protracted legal conflict. The board is reportedly seeking to recover damages they attribute to Mewawalla’s actions.
In his defense, Mewawalla has issued a statement on July 17, “respectfully and vigorously” denying any wrongdoing, while referencing the board’s previous public commendations of his performance.
Additional Legal Challenges
Simultaneously, Mawson is embroiled in another legal dispute. Stone Ridge, the owner of NYDIG, has accused Mawson of unlawfully taking control of over 20,000 ASIC miners, valued at approximately $30 million. The two parties had a colocation agreement starting in December 2023, set to conclude by March 2025. However, disagreements over fees escalated into conflict.
Mawson issued invoices totaling $1.9 million for space and power usage, which Stone Ridge contested, citing an agreement to reduce energy usage in the final month. In response, Mawson altered the payout address for the miners and restricted Stone Ridge staff’s access, citing a contract clause that Stone Ridge argues is inapplicable.
Investors are closely monitoring both legal proceedings. If Mawson’s board successfully substantiates its claims in court, it could recover substantial funds and reinforce the importance of accountability in corporate governance.
Our Commitment to Editorial Integrity
At bitcoinist, our editorial process is focused on delivering thoroughly researched, accurate, and unbiased content. We maintain rigorous sourcing standards, and each article undergoes comprehensive review by our team of leading technology experts and seasoned editors. This diligent process ensures the integrity, relevance, and value of our content for our readers.
“`
