Compass Mining was recently hit with a lawsuit brought on by clients who assert that the company misplaced their crypto currency mining hardware during business with Bit River.
A lawsuit has been filed against Compass Mining for the loss of Bitcoin (BTC) mining rigs that clients purchased.
Compass Mining is being sued (1) for more than $2 million by the owners of Bitcoin mining equipment because the company refused to return the machines when it severed its links with the Russian hosting firm Bit River, according to sources. Bit River was the company that hosted the machines.
In addition, the complaint argues that Compass Mining engaged in fraudulent activity and asserts that the mining company concealed its identity as a "middleman" from Bit River. The plaintiffs say that Bit River may have wrongly thought that Compass owned the mining machines.
On January 17th, the plaintiffs submitted their action against Compass to the United States District Court for the Southern District of Florida. In addition, the statement submitted to the court claims that Compass gave Bit River notice in April of its intent to terminate their commercial relationship.
The mining business cited the new sanctions by Executive Order 14024 and the termination of "relationships and dealings" as the grounds for the termination of "relationships and dealings."
Compass Mining Indifference to the Returning Customers' Assets
However, according to the allegations, Compass did not attempt to return or reclaim the property its clients entrusted to its care. According to reports, these Bitcoin mining assets have been used at Bit River's facilities in Russia.
The court document believes that the misguided fear that returning the devices would infringe Executive Order 14024, which cracks down on interactions with authorized entities, is unfounded. Executive Order 14024 frowns against contacts with sanctioned businesses. This paper claims that Compass possesses "both the right and responsibility to ensure the return of its customers' miners."
The legal statement further said that the representations made by Compass regarding the "uptime of 95%" of its computers were false. The complainant stated that the actual number was probably closer to fifty or sixty percent. In many instances, the dossier revealed clearly that mines had been shut down for several weeks or months.
On the other hand, when customers voiced their complaints, staff from Compass replied with contempt. The company, which focuses mostly on the brokerage and provision of hosting services for Bitcoin mining machines, argues that it cannot engage in business with Bit River.
Compass is being accused of redirecting clients who tried to contact Bit River out of desperation but were instead referred back to the firm by Bit River. Bit River officials provided the following explanation as to why the party that was wronged needed to go back to Compass to plot a course of action moving forward:
"The contract that Bit River has with Compass is the legally binding one, and Compass is the one that owns all of the equipment. As a result, you are required to discuss any concerns directly with Compass.
In the beginning, the goal of the partnership between Compass and Bit River was to convince Compass's clients to host their machines at Bit River's offices. In addition, the purpose of this agreement was to use "enterprise-grade, low-cost, and low-carbon crypto mining facilities in Russia."
Other Problems at Compass
Compass has said they would be cutting jobs in July of 2022 to be profitable during the Crypto Winter.
In the prolonged negative market for crypto currencies, Compass was the first mining company to declare a significant decrease in personnel in July of last year. The corporation laid off around fifteen percent of its workforce and forced significant wage reductions on the remaining employees, including top executives. The reduction at Compass in July followed closely on the heels of the departure of CEO Whit Gibbs and CFO Jodie Fisher.