Customers have accused KnCMiner, a Sweden-based bitcoin and litecoin mining company, of fraud and complained to a government agency, Swedish media report.

 

Over 100 customers have apparently complained that they had experienced significant problems with mining hardware that they had ordered from KnCMiner last year. The goods did not arrive, were delayed, or did not function properly and some even caught on fire. One customer said that his order from last March still has not been delivered to them. The company refused to cancel the purchase and refund the customer when requested.  

The company allegedly stopped communicating with customers and does not reply to email and phone requests from plaintiffs, government organisations, or lawyers. CoinFox contacted KnCMiner to confirm the information but we have not received an answer so far.

The European Consumer Centre (ECC) in Sweden received calls from customers who had changed their mind after purchasing equipment from KnCMiner and wanted to withdraw their orders. The company either did not respond at all or refused to cancel the purchases, according to Erik Mattsson, Legal Advisor & Project Leader ECC Sweden. The cases are now being transferred to Swedish National Board for Consumer Complaints (ARN).

The first complaints started to appear on bitcoin forums last autumn. One Reddit user posted the text of the complaint which he had filed to the Swedish consumer protection agency. He wrote:

“The ‘Titan’ product they have shipped to consumers is not functional and poses an extreme fire hazard... I'm attaching a picture of the melted power connector cause by this device.  Luckily I smelled burning plastic and was able to turn off the device before and more damage was caused. I have been in contact with dozens of other consumers who also purchased this product ‘Titan’ and have also experienced melting connectors, burning wires, non-functioning devices. KnC is refusing to honour any refunds.”

Another consumer posted a summary of posts accusing KnCMiner of fraud on Reddit five days ago: “KnCMiner exploited the lack of international laws that protect consumers, to completely screw over everyone that had placed an order with them.”

ARN’s principal task is to settle disputes between clients and businesses about goods and services provided to the consumer. It also provides expert opinions at the request of courts and provides legal information for customers and traders. It can handle complaints against any trader in Sweden. If the company does not follow the ARN’s resolution, the consumer has right to take the matter to court.

CoinFox wrote about KnCMiner in February, when the startup received an investment of $15 million from the venture capital fund Accel Partners, who had previously invested in Facebook and Spotify and several other companies.