Compass Mining Wins $1.5M in Lawsuit Against Hosting Firm

The mining-services broker claimed Dynamics Mining failed to provide services it had agreed to.

AccessTimeIconJan 3, 2023 at 4:02 p.m. UTC
Updated Jan 3, 2023 at 4:54 p.m. UTC

Mining-services broker Compass Mining won $1.5 million in a lawsuit against hosting provider Dynamics Mining, court documents from last Thursday show.

Compass sued Dynamics last June for its failure to provide services and for withholding clients' machines. The broker had lent Dynamics $1 million to build two bitcoin mining sites, on top of paying $650,000 in hosting fees and deposits. Dynamics claimed that Compass failed to pay $861,000 in hosting and electricity charges and that Compass tried to break into Dynamics' mining facilities in order to steal the mining rigs.

Judge J. Travis Laster, of the Delaware Court of Chancery ruled in favor of Compass, entering in a default judgement against Dynamics for $1.5 million, as well as post-judgment interest and costs.

“We demand a high level of honesty and integrity from our hosting providers and will aggressively protect our clientele when their interests are threatened,” Compass co-CEO and co-founder Thomas Heller said in a blog post Friday.

In a tweet on Monday, Dynamics said it hopes "that the US courts provides justice to the thousands of customers who have been displaced and lost their revenue."

Compass, however, said it isn't sure whether it will be able to collect the $1.5 million.

"Compass Mining’s efforts in this case will now turn to collecting its judgment against Dynamics, whose attorneys withdrew from the case for non-payment," it said in its blog post.

Compass has been trying to improve its reputation and relationship with customers after a series of what it called "setbacks and disappointments" that led to the resignation of then-CEO Whit Gibbs.


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Eliza Gkritsi

Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.