Riot Platforms (NASDAQ: RIOT) and SBI Crypto Co., the mining subsidiary of Japanese financial giant SBI Holdings, reached a verbal settlement on February 16, 2026, one week into a trial at the Western District of Texas before U.S. Magistrate Judge Derek Gilliland. The agreement covers all existing or future claims between the parties. SBI Crypto's original filing sought more than $175 million in lost profits and more than $50 million in equipment replacement costs, for a combined demand of approximately $225 million or more. A later expert report submitted during litigation placed the damages figure above $350 million, but that report was subsequently struck by the court. The $20 million figure represents roughly nine cents on the dollar against the original demand.

How the Case Unraveled

SBI Crypto filed its lawsuit in April 2023 against Whinstone US, a Texas data center operator that Riot acquired in May 2021 for $80 million in cash plus $11.8 million in stock. At the time of that acquisition, the Rockdale, Texas facility was described by CoinDesk as the largest Bitcoin hosting site in North America.

SBI Crypto had signed a hosting agreement with Whinstone back in October 2019, covering colocation of up to 20,000 mining machines. Operations started in June 2020 but never hit contracted levels. According to court filings, the active machine count peaked at 16,200 in September 2020 and had dropped to 14,600 by April 2021. SBI alleged that Whinstone misrepresented having secured power contracts at the time the hosting deal was signed, when those contracts were not actually finalized until just before operations launched. The complaint also alleged negligent bailment and described Whinstone as having told SBI that permits and certifications for the facility were unnecessary. A June 2021 inspection found machines covered in dust and corrosion, with protective filters reportedly provided to other clients but not to SBI. Whinstone and Riot countersued in November 2024, alleging breach of contract and fraudulent inducement by SBI.

The Ruling That Reshaped the Settlement

The clearest explanation for the settlement's low figure sits in a February 2 partial summary judgment, issued one week before trial began. Judge Gilliland barred SBI from using Bitcoin's price appreciation as a component of its lost-profits damages. That ruling effectively dismantled the core of SBI's damages theory. The original claim had included more than $175 million in lost profits, a number built heavily on the price trajectory Bitcoin followed during the relevant operational period. Once the court removed that variable from the equation, SBI's negotiating position weakened considerably.

Riot's Financial Position

For context on how material this settlement is to Riot, the company reported full-year 2025 revenue of $647.4 million, a record, alongside a net loss of $663 million. Mining costs reached $49,645 per bitcoin, up from $32,216 in 2024. Riot held 18,005 BTC on its balance sheet as of December 31, 2025, valued at approximately $1.6 billion at the year-end price of around $87,498. The company reported $309.8 million in cash, of which $76.3 million was restricted. At that scale, the $20 million settlement represents approximately 3 percent of annual revenue and roughly 6.5 percent of unrestricted cash on hand.

What This Means for Miners Outside the United States

The legal logic in this case carries practical weight for mining operators in South Asia and Africa, regions where colocation-style arrangements (where a miner pays a third party to host and power their hardware) are becoming a standard infrastructure model.

The court's decision to exclude Bitcoin price appreciation from lost-profits damages is particularly instructive, at least in US-adjacent common law jurisdictions. Operators in India, Ethiopia, Kenya, and Nigeria who enter into hosting agreements should understand that courts may limit compensation to measurable operational losses rather than speculative gains tied to price movement. That distinction changes how risk should be priced into contracts from the start.

Ethiopia's situation adds another layer of relevance. The country generated roughly $55 million from Bitcoin mining over a 10-month period in fiscal 2024 through formal agreements with 25 companies, but authorities have now suspended new mining permits as the national power grid approaches capacity. Many of the informal hosting arrangements operating in that environment expose miners to exactly the risks SBI documented in Texas: power supply gaps, underdelivered hardware capacity, and inadequate contractual protections.

Legal analysis of recent mining contract disputes across multiple jurisdictions points to a consistent set of gaps: missing minimum power guarantees, no equipment inventory reconciliation schedules, unverified facility ownership, and no solvency screening of counterparties. In the SBI case, a machine shortfall that reached 19 percent against contracted capacity at its peak in September 2020 and widened to 27 percent by April 2021, alongside contaminated server hardware, stretched into 34 months of litigation before settling for a fraction of claimed losses.

What Comes Next

Neither Riot nor SBI Holdings had released named executive statements on the settlement as of publication. Riot's fourth-quarter 2025 earnings call, held on March 2, did not appear to address the settlement directly in available transcripts.

The company operationalized a 10-year, $311 million data center lease with AMD for AI and high-performance computing infrastructure in January 2026. For SBI Holdings, which reported 80 billion yen in digital asset revenues in fiscal 2024, the settlement closes an expensive chapter in its international mining operations.