Complaint filed against Compass Mining for losing BTC mining machines hits snag


A group of customers who tried to sue Compass Mining for more than $2 million for failing to return their Bitcoin machines after cutting ties with a Russian hosting company, had their case dismissed just one day after filing their complaint.

However, the judge has given the plaintiffs another two weeks to file a second amended complaint.

The original complaint stems from a partnership between Compass Mining and Bit River that was intended to allow Compass customers to host their machines at the Bit River facility to take advantage of “enterprise-grade, low-cost, low-emissions cryptocurrency mining facilities.” of carbon in Russia”. .”

In a court document filed with the United States District Court for the Southern District of Florida on January 17, the lawsuit states that Compass Mining terminated its “relationships and dealings with Bit River” in April 2022 due to the sanctions. imposed by Executive Decree 14024 and alleges that the Bitcoin machines housed in the Russian facility were never returned to customers.

The complaint argued that an explanation that the return of the mining machines would violate Executive Order 14024 was “false” and said that Compass has “both the right and the obligation to effect the return of its customers’ miners.”

The complaint then alleges that Compass failed to help customers recover their stranded machines. Compass representatives told clients that it is “unable to perform or even facilitate” any business dealings with Bit Riveraccording to the complaint.

When its clients had no choice but to contact Bit River, the Russian firm allegedly passed the buck to Compass, stating:

“From a legal standpoint, Bit River’s contract is with Compass and all the equipment is owned by Compass. Therefore, you should address all questions directly with Compass.”

The court document noted that Compass should have told Bit River that they were “simply the middleman” and that the machines were paid for and owned by the plaintiffs themselves.

The complaint also alleges that Compass’s promise of “95% uptime” for its machines was inaccurate, stating that it was actually “closer to 50-60%.” In some cases, miners were not online at all for weeks or months at a time.

In a statement to Cointelegraph, Compass Mining said it believed the filing was without merit, as it was confident it would not be successful.

“We are investigating the matter. As of now, Compass Mining firmly believes that the submission is without merit and is missing key elements. Compass is confident that this spurious submission will not be successful,” according to a spokesperson.

Related: For foreign trade only: Bank of Russia opposes free crypto investment

Just one day after the filing was filed, the Florida court dismissed the case with prejudice, due to “several deficiencies that prevent the court from moving forward,” according to United States District Judge Raag Singhal.

This included pro se litigant Jian Huang appearing on behalf of other plaintiffs, including corporate entities without proper authorization. The lawsuit also failed to adequately allege the parties’ citizenship, which is essential in determining a court’s jurisdiction in the matters.

The judge has allowed the plaintiffs to file an amended complaint “no later than February 3, 2023,” requiring all plaintiffs to sign the brief and requiring any corporate plaintiff to be represented by counsel. If this is not corrected, the case would be dismissed without further notice, the judge said.

Update Jan 19, 11:26pm UTC: Added a statement from Compass Mining and information about the subsequent dismissal of the lawsuit in court.