Bitcoin Miner Compass Kicked Out of Facility Over Unpaid Bills

With the crypto market seeing a significant downturn in prices, the mining space appears to be returning to the early 2021 periods when they were strapped for cash.

Now, Compass mining – a prominent mining firm – has lost access to one of its facilities after its landlord called it out for failing to meet its financial obligations.

Compass Welches on its Commitments

In the early hours of Monday, Dynamics Mining – the operator of a Bitcoin mining facility based in Maine – announced that it had terminated its occupancy agreement with one of its tenants, Compass Mining. In a tweet, Dynamics Mining confirmed that it had terminated the hosting agreement as of June 14, claiming that Compass had failed to pay its hosting fees and utility bills on separate occasions.

Effective June 14th @compass_mining facility hosting agreement in Maine was terminated by @dynamics2k for failure to pay power consumption charges. 6 late payment and 3 non payments. @MiningScandals pic.twitter.com/cSfnWMmqTY

— DynamicsMining (@DynamicsMining) June 27, 2022

Compass Mining sells Application-Specific Integrated Circuits (ASICs). While retail appears to be the focal point of its business, the company also rents spaces in mining facilities across the United States and Canada. So some of its customers and other retail miners looking to find a place to mine their coins can easily contact the company to set up at one of its facilities.

As Dynamics explained, Compass Mining had made late payments of bills on six separate occasions. Even worse, the mining company had left three bills outstanding while maintaining access to the Maine-based facility.

In a follow-up tweet, Dynamics pointed out that the power consumption bills were a total of $1.2 million. So far, Compass has only remitted about $665,000 of its total obligations. While Compass claims to have paid off all outstanding debts, Dynamics claimed that the money was diverted to build other facilities instead.

For clarity @compass_mining power consumption @Dynamics2k totaled $1.2 million and they only paid $415k and $250k initial power deposits. Compass claims that they gave money to @Dynamics2k but the money was used to build out their facilities. #truth pic.twitter.com/9esvuCFulO

— DynamicsMining (@DynamicsMining) June 27, 2022

While a war of words has ensued between Compass and Dynamics, the former appears to have been removed from the property in question. Compass has facilities across the States and in Canada. It is unclear what will happen to its rigs and customers who stayed in the Maine-based facility. But Compass would most likely have to move them elsewhere in the interim.

Mining Companies Feeling the Market’s Heat

The eviction of Compass mining from its facility is just the latest development in what appears to be a difficult time for mining companies across the market. Mining firms have taken a severe beating following the drop in cryptocurrency prices.

Facing a cash crunch, several of these mining firms have resorted to selling their entire stash to maintain operations. Last week, data from Arcane Research showed that publicly listed crypto mining firms sold off 100% of their Bitcoin production in May. This is much higher when compared to the first three months of the year when mining companies only sold about 30% of their production.

While public Bitcoin miners only make up about a fifth of the entire network’s hashrate, their behaviour tends to be an indication of the broader market’s behaviour – as well as that of private miners. Their selling spree could cause a massive price drop, leading to further negative sentiment around the market.

#Bitcoin miners have been forced to tap into their cryptocurrency stashes due to a plunge in prices, rising energy costs, and increased competitionhttps://t.co/bGPb6hq19v#CryptoWithNDTV pic.twitter.com/5flv1QyE2Z

— Gadgets 360 (@Gadgets360) June 28, 2022

Of course, this doesn’t necessarily extend to everyone in the market. Recently, Charlie Schumacher, the vice president of corporate communications at Marathon Digital, noted that the company remained committed to its work even amid the bear market. Marathon is one of the largest publicly listed mining companies. And Schumacher pointed out that Marathon Digital has been holding Bitcoin since October 2020. The mining giant holds almost 10,000 BTC now. This means that Marathon is “well-positioned and insulated” enough from the bear market to continue operating.

While they’re not immune to the market’s dynamics, Marathon Digital will continue to buy Bitcoin, according to Schumacher.

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