The Rise and Fall of a Bitcoin Mining Sensation | MarketingwithAnoy

The time was 8:45 on the morning of June 13, when Bill Stewart, CEO of Maine-based bitcoin mining company Dynamics Mining, received a call from one of his employees. “He says, ‘Every machine inside our facility in Brunswick [​​in Cumberland County, Maine] has been taken,” says Stewart. “It’s crazy. I could not believe it.”

He alerted personnel manning another mining facility in nearby Lewiston [in Androscoggin County, Maine], and told them to “be on their toes.” He thought a burglar was on the loose. Stewart had a theory about who might have taken the machines: In those days, he had been feuding with a customer, Compass Mining — a Delaware company that allowed people to buy mining machines and have them hosted in third-party facilities like Stewart’s — over a dispute about energy bills. Stewart thought Compass should pay for them; Compass thought their contract said otherwise.

A few days earlier, Dynamics had sent Compass a letter of termination with a demand for payment and shortly afterwards had switched off the company’s machines. After that, Compass Mining employees had taken their equipment away from Brunswick and were going into the Lewiston plant to pick up more machines. “They’re trying to get into the building,” Stewart says. “And I tell my brother, who runs our security, ‘Don’t let them in the building. We’re not tearing miners out of the wall. Don’t let them in.'”

In a lawsuit filed against Dynamics in the Delaware Court of Chancery on June 21, Compass Mining claimed that Stewart, after refusing to pay the energy bill he was owed, had “held this valuable equipment hostage in order to gain leverage in negotiations. ” As Stewart tells it, he simply wanted the removal to be done in an orderly manner as opposed to hastily and under the cover of darkness. What’s more, he says, he had considered for a while continuing to host the machines on behalf of Compass’ customers, cutting out the middleman. “Their customers reached out and said, ‘Hey, can we just mine directly with you?'” says Stewart. The reason that couldn’t happen, Stewart says, is that Compass hadn’t given its customers the identifying serial numbers of the machines they had purchased, and there was no way for Stewart to know who owned what.

On July 5, the Court granted Compass’s request to get its machines back, but emphasized that this should be done after a formal request to dismantle and move the machines. Stewart says that during the takedown, Compass’ team also grabbed one of Dynamics’ own servers – this is confirmed in an email from one of Compass’s lawyers to Stewart, in which he mentions how the server had been “unintentionally been scooped up” and asked how to return. that.

“Our team is laser-focused on serving our customers and will do so in accordance with the contracts we have in place with our service providers and by resolving any disputes arising from a fundamental misunderstanding of those contracts at a court,” Compass interim co-CEO Thomas Heller said in an email interview.

Even though the Compass had won, the optics in the line-up were terrible. Stewart had chronicled the dispute on Twitter as it unfolded—accusing Compass of owing him hundreds of thousands of dollars in energy bills and essentially breaking into Dynamics’ facility—and thundered at length against Compass in Twitter Spaces. After a dizzying rise, Compass had spent the past few months in constant crisis mode until — just hours after Stewart began tweeting about his early-morning showdown with the company — it decided to do away with its CEO. At the center of that crisis was Russia’s war with Ukraine and a bespectacled, curly-haired cybersecurity entrepreneur named Omar Todd.

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