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Gryphon Digital, a prominent cryptocurrency mining entity, is taking steps to defend itself against a lawsuit filed by its former associate, Sphere 3D. The lawsuit accuses Gryphon of losing 26 Bitcoin (BTC) in a cyber deception scheme, resulting in a loss exceeding half a million dollars.
The legal action by Sphere 3D, initiated in April, revolves around an incident in January. Gryphon's top executive, Rob Chang, allegedly sent 18 BTC to a fraudster impersonating the CFO of Sphere 3D using a cyber technique known as "spoofing." Subsequently, an additional eight Bitcoins were wrongly transferred to the imposter's address.
In contrast, Gryphon contends that Sphere 3D's inadequate computer system security created the vulnerability that allowed this incident to occur. Gryphon argues that the lack of digital protection on Sphere's end enabled a malicious individual to breach Sphere's system, mimic its official email address, and deceive Gryphon into transferring the cryptocurrency.
For those unfamiliar, a spoofing attack is a fraudulent strategy where cybercriminals disguise themselves as trustworthy entities or individuals. This covert technique is employed to deceive users or systems and can manifest through various mediums such as emails or IP addresses. Such subterfuge often aims to breach protocols, gain unauthorized access, steal data, or divert harmful actions.
In response to the lawsuit, Sphere 3D's CEO, Patricia Trompeter, previously stated that Gryphon's actions exposed the company to significant financial risk and violated contractual commitments.
This legal dispute is not the first disagreement between the two parties. They entered a joint venture in August 2021, with Gryphon assuming control over Sphere 3D's cryptocurrency mining operations. Both entities had contemplated merging under Gryphon's umbrella. However, by April 2022, the consolidation plan was abandoned, and both parties mutually agreed to this decision.
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