The Rise and Fall of a Bitcoin Mining Sensation

The Rise and Fall of a Bitcoin Mining Sensation
The Rise and Fall of a Bitcoin Mining Sensation

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’s like, ‘Every machine inside our facility in Brunswick.’ [​​in Cumberland County, Maine] has been taken,’” says Stewart. “That’s insane. I couldn’t 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: These days, he had been arguing 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—because of a dispute over energy bills. Stewart thought Compass had to pay for them; Compass thought their contract said otherwise.

A few days earlier, Dynamics had sent Compass a letter of termination demanding payment, and shortly afterwards switched off the company’s machines. Subsequently, Compass Mining employees had taken their equipment from Brunswick and were about to enter the Lewiston facility to recover more machinery. “They’re trying to get into the building,” Stewart says. “And I tell my brother, who runs our security, ‘Don’t let them into the building. We’re not ripping 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 alleged that Stewart, after refusing to pay the energy bill he was owed, had “held this valuable equipment hostage 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. Also, he says, he had for a while considered continuing to host the machines on behalf of Compass’s customers, cutting out the middleman. “Their customers were reaching out and saying, ‘Hey, can we just get in touch with you directly?'” says Stewart. The reason that couldn’t happen, Stewart says, is that Compass had not given its customers identifying serial numbers on the machines they had purchased, and there was no way for Stewart to know who owned what.

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On July 5, the court granted Compass’ request to get the machines back, but stressed that this would be 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, mentioning how the server had been “unintentionally ‘scraped up'” and asking how they were supposed to return it.

“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 in a court of law,” Kompass interim co -CEO Thomas Heller said in an email interview.

Although the Compass had won, the optics of the line 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 of breaking into Dynamics’ facilities — and lashed out at Compass at length in Twitter Spaces. After a dizzying recovery, Compass had spent the past few months in constant crisis mode, until — just hours after Stewart had started tweeting about his early-morning showdown with the company — it decided to settle with the 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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