Compass Mining sued for losing Bitcoin mining machines bought by customers
Customers are suing Compass Mining for over $2 million, alleging fraud, after the company cut ties with Russian hosting company Bit River and failed to return customers’ Bitcoin machines, citing a non-applicable United States sanction as the reason.
According to a court document filed on Jan. 17, Compass Mining issued a notice in April 2022 that it has terminated its “relationships and dealings with Bit River” due to the sanctions imposed by Executive Order 14024.
It is alleged that Compass “did not offer” to return or even retrieve the assets that its customers entrusted the company with to host at Bit River’s facilities in Russia.
However, it was stated that it is “false” that the return of the mining machines would be in violation of Executive Order 14024, which prohibits dealings with sanctioned entities.
The court document noted that Compass has “both the right and obligation to effect the return of its customers’ miners.”
Compass representatives met customers’ concerns with hostility, saying that it is “unable to conduct or even facilitate” any business dealings with Bit River.
When its customers had no option but to contact Bit River, the Russian firm allegedly pointed them back to Compass. Bit River representatives responded to those that reached out:
The court document noted that Compass should have disclosed to Bit River they are “simply the middleman” and the machines were actually paid for and owned by the plaintiffs themselves.
The partnership with Bit River was originally intended to enable Compass’ customers to host their machines at Bit River’s facilities to take advantage of “enterprise-grade, low-cost and low-carbon cryptocurrency mining facilities in Russia.”
Related: Only for foreign trade: Bank of Russia
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