Compass Mining has won a $1.5 million court battle against hosting services provider Dynamics Corp, a rare win in a year that has seen the block reward miner collapse and file for bankruptcy.
Compass sued Dynamics in June 2022 after the latter ended a hosting agreement, claiming Compass had failed to meet the required payments. Of the $1.2 million that Compass was supposed to pay, it had only paid $665,000 and had missed at least three payments, and was late on six others, Dynamics claimed.
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
Compass fought back in court, denying the claims and accusing the hosting company of “misunderstanding the terms of the contracts the two parties had signed.”
Six months later, Compass won the court battle. In its announcement, the miner revealed that the Delaware Court of Chancery had awarded it $1.5 million.
“On December 29, 2022, Judge J Travis Laster, of the Delaware Court of Chancery, ruled in favor of Compass Mining and entered default judgment against Dynamics for $1,474,400, plus post-judgment interest and costs. The judgment represents deposits, capital expenditures, and other charges improperly retained by Dynamics Mining,” the miner stated.
While it won the court battle, Compass claimed it was unsure if it would be able to collect the money. After all, it alleged that Dynamics’ attorneys had withdrawn from the lawsuit for lack of payment.
“We’re glad to see the correct ruling play out. Dynamics Mining violated the rights of both Compass Mining and our clients, and we’re thankful the U.S. legal system has produced a just result. We demand a high level of honesty and integrity from our hosting providers and will aggressively protect our clientele when their interests are threatened,” Thomas Heller, co-CEO and co-founder of Compass Mining, said.
Compass Mining is one of the many victims of last year’s ‘crypto winter.’ The company filed for Chapter 11 bankruptcy in Texas in September, revealing it had over $500 million in debt. Some of the company’s financiers had managed to recover their money, including ceasing some of the miner’s assets.
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