As the legal battle between the United States Securities and Exchange Commission (SEC) and Ripple continues, the cryptocurrency community is betting that the blockchain company’s victory could open an alt season, which has led to an increase in open interest in XRP perpetual futures.
Indeed, the volume of XRP perpetual futures open interest has surpassed $600 million on five different crypto exchanges, increasing nearly $400 million over the previous seven days, according to the data and chart shared on Twitter by the crypto analytics platform Kaiko on March 31.
As Kaiko stated:“XRP perpetual futures open interest more than doubled this week on bets that a possible victory in Ripple’s lawsuit against the US SEC will trigger an alt season.”
Notably, ‘alt season’ is a slang term in the crypto community that signifies a period in which alternative digital assets, such as XRP, Solana (SOL), Polkadot (DOT), and gaming tokens, outperform the crypto market heavyweights Bitcoin (BTC) and Ethereum (ETH).
The highest volume was recorded on Binance, which has also found itself in the U.S. regulatory line of fire as the Commodity Futures Trading Commission (CFTC) filed a lawsuit accusing it of running an “illegal digital asset derivatives exchange,” as well as of “willful evasion” of U.S. law “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”
XRP price analysis
Meanwhile, XRP was at press time trading at the price of $0.53, recording a decline of 2.95% in the last 24 hours but still advancing 19.13% across the previous week and an even more significant 41.10% over the past 30 days, as charts suggest.
Interestingly, XRP recently saw a strong increase in the social dominance of its network after crossing the $0.49 threshold and continuing above $0.50, and machine learning algorithms have projected that it would keep strengthening, despite Jim Cramer’s comments on the SEC case seemingly exerting a brief bearish effect.
Indeed, the volume of XRP perpetual futures open interest has surpassed $600 million on five different crypto exchanges, increasing nearly $400 million over the previous seven days, according to the data and chart shared on Twitter by the crypto analytics platform Kaiko on March 31.
Christy McMullen, vice-president of Summerhill Market, estimates her family-run business spends about $1 million per year on fees to process credit card transactions. It’s a big cost in the grocery business, which already operates on razor-thin profit margins, but as of next Thursday, the chain of four upscale Toronto grocery stores could choose to pass the “swipe” fees along to customers as a surcharge.
That’s an option McMullen said she cannot take.“It’s not something that you can pass on to your customers. They would go somewhere else,” she said. “It would be another reason for them to go to the big chain rather than the independent.”
As part of a settlement this year of a class-action lawsuit over what are known as interchange fees, Visa and Mastercard agreed to let Canadian merchants apply an extra fee at checkout for the use of credit cards under either of their brands. That change goes into effect next week.
But some small business owners and advocates for retailers say this is not a workable solution to the problem they face when customers pay with plastic, specifically credit cards. (Retailers say the cost of offering debit as a payment option is much lower.)
“Telling retailers to charge customers? That’s not an answer. That’s not anything,” said Giancarlo Trimarchi, managing partner at Vince’s Market, an independent chain of four grocery stores near the GTA.
Instead, they want the federal government to live up to a promise it has made for years, starting with the 2019 election campaign, to reduce credit card transaction fees.
Ottawa has said it wants to ensure small businesses pay similar rates as large businesses (that in some cases have negotiated lower rates with the credit card companies). It held a consultation last year on lowering the average overall cost of such fees for merchants.The consultation wrapped up in December, but small business and retail lobby groups worry that momentum on the issue has died.
“The government has put this file on hold for many years despite repeated promises to small business owners that they’re going to do a further reduction in credit card processing fees,” said Dan Kelly, CEO of the Canadian Federation of Independent Business. “This file seems to be very much at the bottom of the government’s priority list at the moment.”
The two major credit-card companies, Visa and Mastercard, set interchange fees — these vary depending on the type of credit card and can be significantly higher for premium cards associated with reward points programs — but the issuing banks also get a portion of the fees paid by merchants.
In 2020, under a voluntary deal with the federal government, the credit card companies agreed to drop the cost of consumer credit card transaction processing fees to an average of 1.4 per cent (this came down from 1.5 per cent under a previous voluntary agreement).
But as credit card use for payment soared during the pandemic, when consumers spurned cash and purchased more online, retailers say that’s still a hefty price to pay.
As a rough estimate based on the total volume of credit card transactions in 2020 (about $570 billion, according to Payments Canada), merchants would have paid almost $8 billion in credit card processing fees.The retail lobby groups say those numbers were likely even higher in 2021 as the economy recovered after the first year of the pandemic and consumers resumed travelling, dining out and other spending.
“We’ve continued to push for further reductions (in the interchange rate) particularly because we saw such a massive migration away from cash as a result of the pandemic,” said Gary Sands, senior vice-president at the Canadian Federation of Independent Grocers.
“The volume of payments (with credit card) has increased so significantly that it’s just eroding the bottom line of many businesses.”The 2022 federal budget said consultations on the topic continue but the lobby groups say they have not heard anything further from Ottawa.
“The government is committed to lowering the cost of credit-card fees in a way that benefits small businesses and protects existing reward points for consumers,” Adrienne Vaupshas, a spokesperson for Minister of Finance Chrystia Freeland, said in an email.In the meantime, passing on a surcharge to customers will likely be a tough sell for many businesses as Canadians grapple with the effects of soaring inflation.
“We’ve never seen surcharging as the solution to this problem,” said Karl Littler, senior vice-president at the Retail Council of Canada.There have long been exceptions to the previous prohibition on surcharging. For example, some public institutions such as universities and utilities have been able to impose fees for credit card use.
Telecom provider Telus recently told customers it plans to charge a fee for payments made by credit cards and Littler said he could also see it working for smaller merchants who have ongoing and face-to-face relationships with customers, who might sympathize with the costs the businesses incur.
“But I don’t see it working at scale,” he said. “I don’t expect there will be broad adoption of surcharging by Canadian merchants.” Kelly said the CFIB does support retailers having the option but suspects uptake will be limited. He said a poll of 3,914 CFIB members conducted in early September indicated 19 per cent of respondents plan to use the new power.
A Visa spokesperson said the company is not in favour of surcharges, stating in an email, “We believe that the simplest, most economically efficient and consumer-friendly approach is for merchants not to impose surcharges on consumers for using their cards.”
Emilija Businskas, vice-president, communications for Mastercard in Canada, said the option to charge customers a surcharge will give merchants flexibility. On the broader issue of interchange fees, Mastercard “remains committed to building a strong, innovative payments system in Canada,” she said. “This includes our voluntary agreement with government which brings a thoughtful approach to the cost of acceptance for all.”
Mathieu Labrèche, a spokesperson for the Canadian Bankers Association, declined to comment for this story.
Christy McMullen, vice-president of Summerhill Market, estimates her family-run business spends about $1 million per year on fees to process credit card transactions.
It’s a big cost in the grocery business, which already operates on razor-thin profit margins, but as of next Thursday, the chain of four upscale Toronto grocery stores could choose to pass the “swipe” fees along to customers as a surcharge.
Does swiping your plastic (or metal) credit card sometimes seem more like you’re spending funny money than actual currency? It’s a normal feeling. And research confirms that people do in fact spend more money — often, substantially more money — when they make purchases on a credit card instead of using cash.
It makes sense. Cash is a tangible piece of paper with value attached to it. When you spend it, you have less of it in your wallet. You see this and process it. But with the widespread adoption of credit cards, mobile wallets and peer-to-peer payment systems like Venmo, transactions are less transparent.
Will that make you spend more? Here’s what the studies say, and how you can make sure you’re in control of your spending.
The psychology of credit card spending
It’s easy to convince yourself, without even knowing it, that you’re not spending “real” money when you charge on your credit card. And technically, that’s correct.
“In fact, you’re not really spending money — you’re borrowing money,” writes author and certified public accountant Michele Cagan in her book, “Debt 101.” “You know that you’ll have to pay the bill eventually, but the promise of small minimum payments can make purchases seem like bargains.” Unless you pay back the purchase immediately, you won’t feel the pain of the bill for basically a month.
Multiple behavioral economics studies back this up, including a now-classic study by Drazen Prelec and Duncan Simester, professors at Massachusetts Institute of Technology, in which randomly selected participants were offered the opportunity to buy highly desirable, sold-out tickets to a professional basketball game. “Unless you pay back a credit card purchase immediately, you won’t feel the pain of the bill for basically a month.”
Half the participants were told that they would have to pay cash for the tickets. The other half were told that they would be required to pay by credit card. Those who were told they would have to pay by credit card were willing to pay more than twice as much on average as those who were told that they would have to pay by cash. In other words, study participants were willing to pay a 100% premium for the opportunity to buy now and pay later.
Another often-cited study is one conducted by Dun & Bradstreet, in which the company found that people spend 12%-18% more when using credit cards instead of cash. The Federal Reserve Bank of Boston recently found an even sharper disparity between cash and non-cash transactions. According to a 2016 report from the bank, the average value of a cash transaction was $22, compared with $112 for non-cash transactions — a 409% jump.
Older studies and real-world data points have also tended to support this general idea through the years:
McDonald’s once reported that its average ticket was $7 when people used credit cards versus $4.50 for cash.
A published paper from MIT economist Amy Finkelstein found that U.S. states with highway tolls would tend to increase that toll once they’d installed an automatic collection system, such as EZ-Pass. The study suggests that states realized they could charge more because consumers don’t “feel” the electronic transaction in the same way they would by parting with “real money.”
If you’ve ever shopped at Amazon at 2 a.m, you probably know this all too well. Since studies have shown that consumers are willing to spend more when they charge their purchases, it makes sense that credit cards are ripe for impulse purchases….To be continued..
Medical data is supposed to be confidential. But social media is threatening the privacy and dignity of patients. For years, Martin Jugenburg—a Toronto-based plastic and reconstructive surgeon who goes by Dr. 6ix on social media—shared dozens of before-and-after photos and videos on Instagram of the altered bodies that had passed through his hands. There were tummy tucks, Brazilian butt lifts, and breast augmentations, all of them sorted into a kind of virtual assembly line for his thousands of followers to see.
But many of the women he featured in his posts—sometimes depicted post-op and sedated, their genitals and breasts blurred out—hadn’t consented to having their images circulated, according to an ongoing class action lawsuit, and some were only alerted of their presence online due to an investigation by CBC journalists. Unbeknownst to his patients and followers, investigators later found that Jugenburg was using a covert network of cameras in his clinic to perform a rigorous feat of surveillance, documenting thousands surgical procedures.
Women who realized he had posted images of them told investigators they felt violated; they were upset, embarrassed, and distressed. Dr. 6ix’s loose approach to respecting patient privacy on social media is hardly unusual in the world of “med Twitter” and “MedTok,” or medical TikTok. On Twitter, orthopedic surgeons complain about chronic pain “crazies,” nurses mock women who choose to give birth without an epidural, and doctors complain about “liars,” “Googlers,” and patients with conditions they are struggling to diagnose.
TikTok is worse. In a post by someone with the username Nurse Johnn, whose derogatory skits about dementia patients he claims are fiction, the nurse mockingly dances in blue-green scrubs on a hospital bed, imitating someone under his care. One nurse filmed themselves holding the hand of a patient they said was dying of COVID-19. There is a video of someone in what appears to be a psychiatric crisis and another of a patient having their toenails cut. A Miami-based doctor posted about how he “walks in the footsteps of giants” in reference to porn star Johnny Sins, who impersonates a doctor having sex with his patients.
To scroll through many medical social media accounts is to wade into a virtual subculture where patients have become fodder for derision, their privacy and dignity regularly violated. But since there isn’t really any oversight of this virtual world, patients must bear the repercussions.
Medical professionals spilling these traumatic, “hilarious” stories about their patients can lead to people not going to the doctor, says Shayna Hermann, a graduate student at the University of North Texas who studies criminology. This means the underlying health issue can “get worse and worse,” she adds—often with dire consequences.
The concealment of a patient’s medical information is an ancient custom, for such knowledge is a “holy secret,” according to the Hippocratic Oath. Medical students still refer to a doctrine of “doing no harm” that is based on the Hippocratic oath, and harm, to Hippocrates, included the dissemination of information shared between a patient and their doctor. Otherwise, trust in medicine could be undermined, disrupting treatment and diagnosis. Medicine is about acting but also about not acting.
The Enlightenment enshrined patient confidentiality as one of the formative values of the modern biomedical model. Ideals cherished under liberalism, like the individual’s right to autonomy over their body, would be impossible to respect without the guarantee that their medical records remained private. Those ideas would persist throughout the twentieth century. In 1948, the World Medical Association, an international body that now represents 115 medical associations worldwide, produced the Declaration of Geneva for the purposes of unifying an international standard for medical practice.
The document reads: “I will respect the secrets that are confided in me, even after the patient has died.” Today, a patient’s right to privacy has been legally protected in both Canada and the United States. If it is violated, doctors can be sanctioned and even lose their medical licence, temporarily or permanently. Despite this basis for the preservation of confidentiality, the growing presence of practitioners on social media presents a risk for breaches.
Physicians, like many of us, have used platforms like Twitter and Instagram since their inception, with 90 percent reporting they used social media to find information related to their patients and practice in 2017, according to a report by market analyst Research2Guidance. Today, lists of the top twenty-five “medical influencers” include accounts of family physicians and doctors who have been endorsed by celebrities and have millions of followers. And, at times, their posts contain jokes involving patient information.
A 2020 study by Wasim Ahmed of Newcastle University, which analyzed 348 tweets about living patients, found that nearly 47 percent contained details that would likely make patients identifiable to themselves. In some ways, packaging patient information for public consumption is in line with lesser-known traditions of the medical world. The history of medicine is also a history of performance; health care workers have advanced their careers through the exhibition of less powerful people for hundreds of years.
Despite the progress made around patient confidentiality during the Enlightenment, during the seventeenth and eighteenth centuries it wasn’t uncommon for both students and the public to pay an entry fee to witness dissections that took place as part of medical education in Europe. Many people viewed the practice as necessary for scientific advancement, but physicians used, almost universally, bodies of the poorest subjects, stealing cadavers from graves without consent and then displaying them for the public.
In the era before anesthetic was widely used, surgeons would operate on conscious patients before an audience of, at times, 700 to 800 onlookers. In an article for JSTOR Daily, Rebecca Rego Barry wrote that surgeons “seemed to revel in the showmanship aspect of their work,” receiving applause at the moment they entered what one medical college called the “pit.” It was this performative aspect of medicine—perpetrated by practitioners and revered by observers—that helped usher in the era of the celebrity doctor.
Of course, the conditions health care professionals train and work in have always encouraged physicians to establish public influence. Canadian hospitals and medical schools reward and publicly promote their most prestigious students, researchers, and clinicians; competition for esteem and funding from donors encourages already-high-achieving people to differentiate themselves and build lucrative research reputations. But television fundamentally changed the way we think about doctors, commodifying the act of giving medical care so that it could be sold as entertainment on a mass scale.
Just look at celebrities like Dr. Drew and Dr. Oz or shows like Dr. 90210 and Botched. Every week, viewers tune in to watch the assessment, diagnosis and treatment of patients, despite the criticisms these shows have received for exploitative practices. Reality shows like ABC’s NY Med used footage from actual emergency rooms and operating theatres, sometimes filming surgeries without consent from patients.
Joel M. Geiderman, an LA emergency physician, told Emergency Medicine News that he knows people who consented to being filmed while stressed and in the emergency department, then regretted the publicization of their medical treatment in the media. So, while the disclosure of medical secrets to the public is not particularly new, technology has made it much easier.
There is certainly a place for doctors online. Medical misinformation and vaccine hesitancy need to be confronted, especially in the era of COVID-19, and many clinicians have made invaluable contributions to online discussions about medical racism, homophobia, ableism, and misogyny. A number of physicians use social media to help patients with conditions underrepresented in medical literature self-advocate. Others advise oppressed patients on how to ensure they’re getting the best care possible and answer pressing questions about the pandemic.
But growing distrust in the medical establishment, which the violation of patient confidentiality encourages, must be reckoned with just as seriously. According to a recent survey by NORC at the University of Chicago, since the start of COVID, 32 percent of respondents decreased their trust in the health care system. This distrust is often particularly present in Black, Indigenous, and LGBTQ+ communities, which have been subjected to medical exploitation, experimentation, and harm for centuries.
Research shows suspicion of pharmaceutical companies continues to drive vaccine hesitancy. “COVID put physicians in the forefront of the cultural mainstream,” says Stephanie Lee, a hematologist at St. Michael’s Hospital in Toronto. “Everyone was looking to physicians for guidance on what was happening.” She adds that, for many physicians, there was a feedback loop of wanting more attention and likes on social media.
While she believes health care practitioners generally have good intentions, “when the well runs dry of content on COVID, people wanted to mine their professional lives to maintain their status. COVID accelerated what was already an issue.” The targets of these posts are, overwhelmingly, the oppressed. Faithful to the history of medical theatre, women with mental illness and patients who are geriatric, disabled, fat, impoverished, or perceived as uneducated are subjected to the majority of ridicule.
And it’s not uncommon for patients in similar situations to see these posts. Reacting to discussions of trans healthcare by physicians on Twitter, one person tweeted, “My lived experience/identity has been distilled to a saccharine and self-serving Aesop[’s fable].” Another nurse, who posted that she knew when patients were faking symptoms, inspired a #PatientsAreNotFaking hashtag used by thousands of people.
“Whenever I see nurses and doctors on TikTok . . . disparaging their patients . . . it makes it hard, for not just me but a lot of people, to be vulnerable to their doctors,” says the University of North Texas’s Hermann. She adds that patients who grew up in poverty, like herself, already distrust health care professionals, and social media has the potential to make it worse. Patients have already expressed a variety of concerns in the comments sections of these platforms:
“TikTok singlehandedly made me not seek medical care recently,” wrote one user; another posted about their anxieties around having emergency surgery, writing, “I was literally fearful of my nurses having their phones on them and videoing me while I’m vulnerable.” With no real oversight in place to monitor online behaviour, it’s clear that the regulations around patient confidentiality must evolve to capture these new concerns.
The Canadian Medical Association does have a data-stewardship policy that covers patient privacy, but it only mentions the sharing of patient details over email—nothing about social media. The issue has been addressed in the College of the Physicians and Surgeons of Ontario’s new set of guidelines for the use of social media by physicians, which includes the recommendation that doctors “exercise caution when posting information online that relates to an actual patient” and asks them to “bear in mind that an unnamed patient may still be identified through a range of their information such as a description of their clinical condition.”
These are, however, just guidelines, and they are still violated constantly online. Both Hermann and Lee think that social media use should be addressed in medical curricula; hospitals and medical boards already have disciplinary mechanisms in place for violations of patient confidentiality, which should be implemented when health care practitioners post derogatory content online with the same consistency that they are when practitioners are careless with physical copies of patient data.
Directives, they added, should take into account that comments deriding or ridiculing sick people in general can be as harmful to the public’s relationship with the medical system as individual violations of patient confidentiality. Lee believes that, when done correctly, patient narratives shared on social media can have a constructive and positive function. “There’s an opportunity to do a lot of good,” she says. “
But physicians need to take stock of how this is really helping our patients. Is there really a net material benefit to patients by posting this? Is there an alternative way that preserves the patient’s dignity better, maintains their anonymity better?” Asking for consent to post about a patient online is complicated, however. The power differential between patients and doctors, in most cases, is enormous.
It is difficult to imagine conditions in which patients wouldn’t potentially feel coerced into agreeing to let their physician share their information on a public social media account. “Hospital fundraising campaigns share patient information all the time, but the big difference is the patients’ stories are shared after the acute issue has been resolved,” says Lee, adding that, often, those narratives are shared in the patient’s own words, sometimes written in partnership with their former health care providers. “You have to empower the patient to be part of the process, to be part of sharing their story,” she says.
In 2021, following his disciplinary hearing at the College of Physicians and Surgeons of Ontario, Martin Jugenburg was suspended from his job for six months. At some point, he removed all the patient content predating November 2019 from his Instagram account. The committee wrote that there was a “troubling pattern of Dr. Jugenburg pursuing his own interests . . . in publicity and in cultivating a strong social media presence, at the expense of the privacy of his patients.” His “seeming indifference to these issues was appalling and is deserving of significant sanction,” the committee added.
Jugenburg has since resumed his career at the Toronto Cosmetic Surgery Institute and has publicly vowed to fight attempts made by patients to seek financial compensation for the damages done. His Instagram account is still public, and he has begun posting new post-op images of his patients—presumably with permission this time. It’s almost business as usual.
For patients, the situation remains unchanged. Questions about the function of social media in medicine have yet to be posed with seriousness, and solutions have not been identified or implemented. Meanwhile, influencer-doctors continue to practise the tradition of performance, prolonging a hidden history of sickness as spectacle.
“It’s really easy to detach empathy when you’re doing a TikTok. It’s really easy for those viewers to not see that person as a person,” says Hermann. “[But] I think, now, it’s coming to a head.”
Moderna previously pledged not to enforce COVID-19-related patents but changed its stance as the pandemic shifted gears.
Moderna has said it is suing rival vaccine maker Pfizer and its German partner BioNTech, citing infringement on its patents in developing the first COVID-19 vaccine approved in the United States, alleging they copied technology that Moderna developed years before the pandemic.
The lawsuits set up a high-stakes showdown between the leading manufacturers of COVID-19 shots that are a key tool in the fight against the disease. “Moderna believes that Pfizer and BioNTech’s Covid-19 vaccine Comirnaty infringes patents Moderna filed between 2010 and 2016 covering Moderna’s foundational mRNA technology,” the US-based biotech firm said in a statement on Friday.
“Pfizer and BioNTech copied this technology, without Moderna’s permission, to make Comirnaty,” Moderna said. Pfizer and BioNTech said they have not fully reviewed the complaint, but expressed surprise over the litigation.
“The Pfizer/BioNTech Covid-19 vaccine was based on BioNTech’s proprietary mRNA technology,” a statement said. “We will vigorously defend against the allegations of the lawsuit.” When the news broke, Pfizer shares fell nearly 1 percent, while BioNTech US-listed shares were down about 1.5 percent and Moderna shares slipped 1.7 percent.
The lawsuit, which seeks undetermined monetary damages, was filed in the US District Court in the state of Massachusetts. Moderna said the lawsuit would also be filed in the Regional Court of Dusseldorf in Germany.
Just a decade old, Moderna, based in Cambridge, Massachusetts, had been an innovator in the messenger RNA (mRNA) vaccine technology that enabled unprecedented speed in developing the COVID-19 vaccine.
The mRNA technology used in the Moderna and Pfizer-BioNTech shots differs from that in traditional vaccines, which rely on injecting weakened or dead forms of a virus to allow the immune system to recognize it and build antibodies.
Instead, mRNA vaccines deliver instructions to cells to build a harmless piece of the spike protein found on the surface of the virus that causes COVID-19. After creating this spike protein, cells can recognize and fight the real virus, hailed as a major advancement in the development of vaccines.
Germany-based BioNTech had also been working in this field when it partnered with the US pharma giant Pfizer.
Lawsuits can take years to resolve
Moderna said it had begun building up the technology in 2010 and patented work on coronaviruses in 2015 and 2016, which allowed for the rollout of its shots in “record time” after the pandemic struck.
The virus has killed at least 6.48 million people worldwide since 2020 and made nearly 600 million ill, according to a Johns Hopkins University tracker. In addition to death and suffering, the disease has led to a reshaping of life ranging from a change in norms on working from home to a scrambling of supply chains and workforces.
Moderna said it pledged in October 2020 not to enforce its COVID-19-related patents while the pandemic continued, but less than two years later changed that stance as the fight shifted gears.“Moderna expected companies such as Pfizer and BioNTech to respect its intellectual property rights and would consider a commercially reasonable licence should they request one for other markets,” it said.
“Pfizer and BioNTech have failed to do so,” the firm added. Pfizer and BioNTech are already facing multiple lawsuits from other companies which say the partnership’s vaccine infringes on their patents. Germany’s CureVac, for instance, also filed a lawsuit against BioNTech in Germany in July. BioNTech responded in a statement that its work was original.
Moderna has also been sued for patent infringement in the US and has an ongoing dispute with the US National Institutes of Health (NIH) over rights to mRNA technology. These types of lawsuits are not unheard of in the pharmaceutical industry, where patents can be worth billions of dollars, and can take years to resolve.
It was 8:45 in the morning of June 13 when Bill Stewart, the CEO of Maine-based bitcoin mining business Dynamics Mining, received a call from one of his employees. “He’s like, ‘Every machine inside of our facility in Brunswick [in Cumberland County, Maine] has been taken,’” Stewart says. “That’s crazy. 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 at large. Stewart had a theory on who might have taken the machines: In those days he had been wrangling 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—due to a dispute over energy bills. Stewart thought Compass had to pay for them; Compass believed their contract said otherwise.
A few days earlier, Dynamics had sent Compass a termination letter demanding payment, and shortly thereafter had switched the company’s machines off. Then, Compass Mining staffers had taken their equipment away from Brunswick, and they were about to enter the Lewiston plant to recover more machines. “They’re trying to get inside the building,” Stewart says. “And I’m telling my brother, who runs our security, ‘Do not let them into the building. We’re not ripping miners out of the wall. Do not let them inside.’”
In a lawsuit filed against Dynamics in the Delaware Court of Chancery on June 21, Compass Mining alleged that Stewart, having refused to foot the energy bill he was supposed to pay, had been “holding this valuable equipment hostage to gain leverage in negotiations.” The way Stewart tells it, he simply wanted the removal to happen in an orderly fashion as opposed to hastily and under cover of darkness. What’s more, he says, for a while he had considered continuing to host the machines on behalf of Compass’ customers, cutting out the middleman.
“Their customers were reaching out, saying, ‘Hey, can we just mine directly with you?’” Stewart says. The reason that couldn’t happen, Stewart says, is that Compass had not given its customers the identifying serial numbers of the machines they had bought, and there was no way for Stewart to know who owned what.
On July 5 the Court granted Compass’ request to get its machines back, but underlined that that should happen following a formal request to unmount and relocate the machines. Stewart says that during the removal, Compass’ team also grabbed one of Dynamics’ own servers—that is confirmed in an email by one of Compass’ lawyers to Stewart, mentioning how the server had been “inadvertently scooped up” and asking how to return it.
“Our team is laser-focused on serving our clients, 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 these contracts in a court of law,” Compass interim co-CEO Thomas Heller said in an email interview.
Even if Compass had prevailed, the optics of the row was terrible. Stewart had chronicled the dispute on Twitter as it played out—accusing Compass of owing him hundreds of thousands of dollars in energy bills, and of having essentially broken into Dynamics’ facility—and thundered at length against Compass in Twitter Spaces. After a vertiginous rise, Compass had spent the last few months in constant crisis mode, until—mere hours after Stewart had started 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 called Omar Todd. Todd, based in Australia, cofounded the pro-Julian Assange WikiLeaks Party in 2013—which went on to compete in the Australian national election and secure 0.6 percent of the vote; in 2016, he joined the pugnacious marine conservation charity Sea Shepherd as a director. In recent months, his work description has grown once more:
In his spare time, Todd is orchestrating an international legal effort to rescue thousands of bitcoin mining machines from Compass in Siberia. The approximately 4,000 mining rigs, whose value Bloomberg has reported at $30 million, are stranded in Russia due to Western sanctions following Moscow’s invasion of Ukraine. The machines had initially operated in a Russian mining farm under a partnership between Compass, and Russian firm BitRiver. Compass had sold machines to ordinary users and installed them in a BitRiver facility for the price of the rigs plus the payment of a monthly hosting fee.
In April 2022, when the US Office of Foreign Assets Control (OFAC) designated BitRiver a sanctioned organization, Compass ended its relationship with the company to avoid breaching the sanctions. BitRiver turned the machines off and told individual Compass customers who wanted to reclaim their valuable gear that all the machines legally belonged to Compass, according to evidence submitted in a California lawsuit brought against Compass by Veribi LLC, a Nevada-based customer, on July 1.
Both customers who had their serial numbers and those who did not discovered that, in BitRiver’s eye, they held no title to the devices they had purchased—unless Compass stepped in, the machines would stay in Irkutsk, Siberia. “Compass Mining refused to communicate with us and, unfortunately, refused to deal with the return of the equipment,” BitRiver spokesperson Andrei Loboda says in a WhatsApp message. Compass’ Heller describes that characterization as “false” in an email interview. “Compass’ management team will continue to make efforts to assist its customers while maintaining compliance with OFAC regulations,” Heller says.
With nowhere to turn, and millions in sunk costs, customers turned to Todd. “I floated to the top because I was the most public individual,” he says. Todd’s company SkyWiFi Pty raised tens of thousands of dollars through a Discord server for Compass customers. (Todd won’t say exactly how much, but public Discord messages suggest that it is north of $60,000.) He says these funds will be used to retain lawyers and other experts in the US, Russia, Australia, and the UK and broker a solution on customers’ behalf.
However, two lawyers featured on the list of advisers Todd provided to the crowdfunders—Erich Ferrari and Vasily Kuznetsov—say they had not in fact been retained and were not planning to work on the case; on August 1 Todd removed some names from the list and notified WIRED of the change in an email.
A good outcome, Todd says, would be to transfer the machines to a Russian facility run by a non-sanctioned organization. Todd says that while Compass’ legal team has been cooperative, the company’s strategy has largely boiled down to watching and waiting. “Compass Mining is waiting for me to help them—they have no answers,” he says.
Customers rallying behind SkyWiFi have accused Compass Mining of blundering its way into this situation. Following Russia’s invasion of Ukraine on February 24, many customers feared that their mining machines would be caught in the brewing geopolitical crisis, and some asked for the equipment to be removed. “I told them, ‘Listen, let’s move the miners out of Russia. It doesn’t make sense to continue to deploy there,’” recalls one customer, who asked not to be named because they still have ongoing business with Compass. “A lot of other people did the same.”
Compass’ response, in a March 4 Discord message, has earned meme status among its customers. The company’s then-CEO, Whit Gibbs, wrote that the situation was “‘business as usual’ and there is no reason to be worried.” Gibbs went on to underline BitRiver’s links to the Russian government, implying that they would make the operation safer. (BitRiver did not comment on these supposed links.) “If the situation changes, Compass will take swift action to remove all machines out of Russia immediately,” Gibbs added.
Compass did offer customers the option to get out of the contract and take their machines elsewhere, but Todd says it was unclear how that would play out. “Some people wanted their miners returned, and they were told that there’s just no shipping or logistics available,” he says. “Really, there was no choice for anybody apart from waiting for Compass.”
The customer says that when their business partner called Compass to inquire about pulling the equipment out of Russia, he was told that “they could not guarantee they could safely remove the machines.” According to emails shared with WIRED, the customer’s own request to deploy some of the machines they had ordered to a US facility instead of Russia was rebuffed by Compass. The customer says that between the cost of the machines marooned in Russia and the lost revenue due to their sitting idle, they have so far lost around $70,000.
The customer says that despite multiple requests, they still do not know their machines’ serial numbers. “Clients can easily obtain their serial numbers by contacting our Support team,” Heller says. Veribi, the Nevada company that is taking Compass to court in California on charges of breach of contract, negligence, conversion, and fraud, alleges a loss of over $1.5 million. From its evidence, however, it does appear to have received its 20 machines’ serial numbers.
On April 20, 2022, when the OFAC eventually decided to sanction BitRiver for “help[ing] Russia monetize its natural resources,” Compass sent a lawyerly email to its customers on April 21 announcing the ending of all relations with BitRiver. Compass asked for customers’ permission to sell their machines and recover at least some of the money, which Todd describes as “a fire sale,” a scenario that most customers—some of whom had paid up to $13,500 per mining machine—could not stomach.
As Compass’ Discord filled with angry customers, Gibbs delivered a curious barb. “You could have hosted in another country, you chose Russia. take some personal responsibility [sic]” he wrote. Gibbs declined to comment for this article. Eventually, the company shut its Discord server down for good. That, Heller says, was due to the fact that “using Discord to support thousands of clients was unstructured and lengthened our response times.”
After that, Gibbs had to “fall on his sword,” Todd explains. “There was just too much hype to the guy. He said too many things which turned out to be disingenuous at worst.” On June 28, Gibbs and Compass’ chief financial officer, Jodie Fisher, both resigned, with Heller and chief technology officer Paul Gosker stepping up as co-CEOs. It wasn’t only Compass customers, who by then had congregated on another unofficial Discord server, celebrating Gibbs’s departure; even some Compass employees expressed some relief.
In a Discord message posted the day after the announcement, Compass sales manager Andrew Nagel said that the two days after Gibbs’ resignation had been “the best days I’ve had in a long time.” He noted that Compass’ customer service had been “poor” for a long time. Even before the Russia affair, 2022 had been plagued by delays in the company’s US operations, culminating on June 27 in the public fallout with Dynamics.
Under the new leadership, the hope was, things would be different. But many Compass employees wouldn’t remain at the company long enough to see that happen. On July 7, the company announced the layoff of 15 percent of its workforce, as well as compensation and spending reduction across the board. The message was that Compass had grown “too quickly” and that had made it dysfunctional.
Compass is in many ways emblematic of a very specific age in crypto history. Buoyed by a pandemic-induced craving for novel risky assets, the price of bitcoin had grown vertiginously since late 2020, eventually touching its all-time high of $67,000 in November 2021. Compass Mining was incorporated in August 2020 with a business model predicated on the idea of allowing ordinary people—jocularly called “plebs” in the company’s now defunct Discord—to mine crypto.
According to CoinDesk, in its first two months of operations, Compass sold $11.4 million in mining rigs to its customers, and by March 2021, it was raising $1.7 million from cryptoland household names such as Mike Novogratz’s Galaxy Digital. Before even celebrating its first anniversary, Compass was throwing a yacht party in Miami. But in 2022, when growing inflation, Russia’s warmongering, and high-profile industry scandals brought crypto prices down—with a sector-wide loss of about $2 trillion—Compass, like many others, started experiencing problem after problem.
Still, even after this fallout with its own customers, Compass’ reputational damage is nothing compared with the more serious financial difficulties that many other bitcoin mining companies, including some publicly listed ones, are facing. “In Compass’ model they deal with retail, which has a really strong voice online, so their issues are broadcasted to the public with a speakerphone,” says Ethan Vera, cofounder and chief operations officer of crypto-mining infrastructure company Luxor Mining.
“But the 2021 mining cycle has left many companies in a tough position. Over-leverage, too rapid growth, and purchasing machines at the top of the cycle is the common theme that will lead some companies to bankruptcies or fire sales of their assets.”
As the legal battle between the United States Securities and Exchange Commission (SEC) and Ripple continues, the cryptocurrency community is betting that the blockchain company’s victory could open an alt season, which has led to an increase in open interest in XRP perpetual futures.
Notably, ‘alt season’ is a slang term in the crypto community that signifies a period in which alternative digital assets, such as XRP, Solana (SOL), Polkadot (DOT), and gaming tokens, outperform the crypto market heavyweights Bitcoin (BTC) and Ethereum (ETH).
