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Kentucky-based Dynamics said in June that Compass had failed to pay utility and hosting bills tied to a facility in Maine, and terminated its hosting agreement. Compass sells hardware that customers can use to mine Bitcoin, and also provides hosting for the power-intensive machines through partnered facilities.
Compass filed a lawsuit, claiming that Dynamics’ allegations were “completely incorrect, lack any factual support, and create further damage to Compass.” The company further alleged that Dynamics Mining was holding its machines “hostage.”
— Compass Mining 🧭 (@compass_mining) December 30, 2022
Today, following the announcement of the Thursday judgment, a Compass representative told Decrypt that the “situation with Dynamics Mining is currently not uncommon” in the industry. “We are focused on finding high-quality providers and growing in a sustainable way,” they added.
A judge ruled in favor of Compass on Thursday and entered a default judgment against Dynamics for just over $1.47 million, plus post-judgment interest and costs. Compass said in a statement that “it is not clear” whether it will be able to collect the judgment from Dynamics.
“Dynamics Mining violated the rights of both Compass Mining and our clients, and we’re thankful the U.S. legal system has produced a just result,” Compass co-CEO Thomas Heller said in a statement.
Dynamics, which provides 100% renewable energy mining facilities, told Decrypt that an “appeal is already in the works,” and blamed paperwork that “was filed incorrectly.”
The Dynamics representative added that Compass was trying “to improve their terrible company image” by “preemptively” sharing news of the court judgment.
Back in June, both CEO and co-founder Whitney “Whit” Gibbs and Chief Finance Officer Jodie Fisher resigned from Compass, soon after the news of the Dynamics dispute came to light.
Bitcoin miners have had a difficult time this year: a brutal ongoing bear market means that the price of Bitcoin has plunged, leading to less profit for the companies. Many firms have had to sell their Bitcoin to increase liquidity.
Editor's note: This article was updated after publication to clarify when the lawsuit was filed.