Compass Mining – a US-based mining service that hosts Bitcoin miners on behalf of clients – has recently announced that both CEO Whit Gibbs and CFO Jodie Fisher would be stepping down, effective immediately.
The statement also informed users that CTO Paul Gosker and Chief Mining Officer (CMO) Thomas Heller would be taking over as temporary leaders until a more permanent solution could be found.
“Through this restructuring, the company is wholly focused on regaining the goodwill of our stakeholders and the community, as well as delivering on our mission of providing best-in-class service for miners of all sizes.”https://t.co/wWcTcz8m9y
— Compass Mining 🧭 (@compass_mining) June 28, 2022
The statement indicated that their main objective – making mining easier – has been compromised by “multiple setbacks. ”
“We recognize that there have been multiple setbacks and disappointments that have detracted from that objective. Through this restructuring, the company is wholly focused on regaining the goodwill of our stakeholders and the community, as well as delivering on our mission of providing best-in-class service for miners of all sizes. These changes are being implemented to achieve the next level of growth for Compass Mining.”
It would be easy to assume the neutral wording above refers to the current bear market that is causing many DeFi platforms and crypto exchanges to struggle to stay afloat. However, a number of allegations have recently surfaced that could indicate Compass’ current woes are far more widespread.
Customer Support Curtailed With Only a Brief Warning
Following an update by DynamicsMining – a business partner of Compass reportedly preparing for litigation over non-payment of electricity bills for hosted mining hardware – Compass clients stated that the firm’s Discord had also been shut down with only one day’s advance warning.
Wonder why the did this? 🤔 pic.twitter.com/uufk1YA6Ln
— paul (@birdsrnotreal2) June 27, 2022
Additionally, DynamicsMining stated that they have tried to help Compass’ customers in getting control over their mining rigs. However, as the mining service provider allegedly did not inform their clients of the serial numbers of said machines, Dynamics is unable to do much for them at this moment.
Furthermore, Compass’ ToS, paragraph 3.4, states that the company reserves the right to “rearrange, remove, or relocate Customer Hardware without any liability to Compass.” As a result, the worries of Compass clients regarding the state of their miners in the Maine facility run by Dynamics seem quite reasonable.
Over Half a Million in Unpaid Bills
Although the current dispute with Dynamics cannot be ascertained to be the main catalyst behind Compass’ troubles – particularly since they had to sell off about $30 million worth of hardware administered by Russian crypto mining company Bitriver – a sudden move to end the firm’s business relationship with DynamicsMining probably played a significant part. Not to mention the legal costs the split could incur if the situation is not solved amicably.
DynamicsMining has stated on Twitter that Compass currently owes them $1.2mln in electricity bills, of which they have only paid $665k. The statement points out further alleged irregularities in the recently terminated partnership, with a promise of more receipts as proof. DynamicsMining plans to move forward with legal action on the basis of breach of contract unless an amicable agreement can be reached.