Allegations of fraud against Compass Mining after company cuts ties with Russian
Compass Mining severed its ties with the Russian hosting provider Bit River and did not return Bitcoin mining gear to its customers. The company claimed the reason for its actions as a non-applicable sanction issued by the United States of America. Directly as a result of this, customers of Compass Mining have filed lawsuits against the company, alleging that it engaged in misleading business practises in an attempt to recoup more than two million dollars.
A document that was submitted to the court on January 17 reveals that Compass Mining informed the court in April 2022 that it had terminated its “relationships and transactions with Bit River” as a direct response to the sanctions that were issued as a consequence of Executive Order 14024. The information was revealed in the document that was filed with the court.
According to the accusations, Compass “did not offer” to return or even retrieve the assets that its clients had entrusted the firm with and which were being housed at Bit River’s facilities in Russia. These assets had been entrusted to Compass by its customers. The Russian Federation was the location of these assets.
On the other hand, it has been said that the claim that the return of the mining equipment would violate Executive Order 14024 is “false.” This order prohibits entering into deals with companies that have been blacklisted. Transactions with companies that have been placed on a blacklist are forbidden under this ruling. It was said that this directive may be the cause of the disagreement in question.
Compass has “both the right and responsibility” to ensure the return of its customers’ mines, as stated in the legal agreement between the two parties. The paper does have this stipulation as a part of it.
In an angry response to the concerns raised by clients, the management of Compass said that the company is “unable to execute or even assist” any business transactions with Bit River. This was done in response to the concerns expressed by the consumers.