Compass Mining cannot pay energy bill and loses mining facility

Last Updated: 29 June 2022

Bitcoin mining hardware and hosting company, Compass Mining, has lost one of its facilities in Maine after its owner, Dynamics Mining, terminated the contract because Compass Mining could not pay its energy bill. Dynamics Mining announced on 27 June that the contract between the two had been broken as of 14 June.

Problems at Compass Mining

According to Dynamics Mining, Compass Mining has been late with the payment of the energy bill six times and has failed completely twice. In a later tweet, Dynamics Mining announces that the total bill is $1.2 million, of which Compass Mining has only paid $665,000.

Compass Mining, in turn, claims that the money for the accounts was, indeed, sent, but Dynamics states that this money was used to build new facilities. Cointelegraph has tried to contact both parties, but could not get a response.

Whit Gibbs, the CEO of Compass Mining, says that his company prefers to fight the case in court and not via Twitter. Dynamics Mining responds with the statement that Compass Mining only had to pay 250.000 dollar for 3 months of power. Furthermore it states that Twitter is the voice of Compass Mining’s users and not the courtroom.

Unclear what awaits users

At the time of writing, it is not clear what awaits Compass Mining users. The American company sells ASIC miners, which customers can then have Compass Mining put to work in the United States or Canada. However, Compass Mining’s hosting agreement states that Compass Mining may move and remove the mining hardware in case of an emergency without the damage being done by Compass Mining.

The same agreement states that by signing it, customers waive their rights to seek a solution through the courts. The problematic situation for Compass Mining comes at a time when the mining industry is under pressure due to the relatively low bitcoin price and increasing energy costs.

After the price fell below $24,000 a while ago, many old ASIC miners became loss-making, and even some miners of the newer generations had to be shut down. Currently, miners profitability is about 75 percent lower than at the peak of the market.

  • Ivan Brightly

    Ivan Brightly is a leading cryptocurrency analyst and author with over 5 years of experience in the blockchain and digital asset space. He previously served as a senior analyst at a major cryptocurrency hedge fund where he led quantitative research and trading strategy development.

    Ivan holds a Master's degree in Finance from the London School of Economics and a Bachelor's in Computer Science from Stanford University. He is frequently invited to speak at fintech and blockchain conferences worldwide on topics spanning cryptocurrency trading, blockchain technology, and the future of digital assets.

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