Limestone Bitcoin mine trial expected before fall | WJHL
JONESBOROUGH, Tenn. (WJHL) — Washington County’s lawsuit against utility BrightRidge and Bitcoin mine operator Red Dog Technologies will likely go to trial before this fall, the county attorney told county commissioners Monday night.
Commissioners voted overwhelmingly Nov. 28 to reject a settlement proposal that would have allowed Red Dog to build a new Bitcoin mine at the Washington County Industrial Park to replace one in Limestone that started operating in late 2020.
Commissioners sued BrightRidge in November 2021, claiming the mine didn’t meet zoning requirements and that no permit for it had been granted. BrightRidge leases property to Red Dog next to its Bailey Bridge Road substation in the New Salem community and it was BrightRidge that initially applied for a rezoning to allow what it said would be a “blockchain data center.”
GRIID Infrastructure, Red Dog’s parent company, was the planned user of the space and a Bitcoin mine is a type of blockchain data center, but county commissioners were never told about a Bitcoin mine or a user other than BrightRidge when the utility applied for the rezoning in February 2020.
The lawsuit came months after residents near the mine complained of its noise in May 2021. The mine has continued to operate throughout the duration of the lawsuit.
Wilkinson talked at greater length with commissioners in a closed executive session Monday night. She did say in response to a question from Commissioner Richard Tucker that “the lawsuit that Washington County filed was never dismissed while settlement was under discussion.”
She said the day after the county’s 13-2 vote to reject the settlement proposal, her office contacted Washington County Chancery Court, where the suit is filed, “to advise them that settlement was not an option under those terms.”
Her office explained some scheduling issues that defense attorneys had raised considering the coming holidays. As of Monday morning, no updates had been filed in the case, but Wilkinson said that was going to change soon.
“Just this week we have heard back from the court to discuss different trial dates,” Wilkinson said. “That would be the next step.”
Wilkinson said she has already discussed dates with Angie Charles, Washington County’s planning director and the primary plaintiff in the case, about her schedule.
“We’re waiting to hear from all counsel that all of the parties are available,” Wilkinson said. Plaintiff Washington County stands ready for trial as and when the court sets it, which I would expect to be before the fall.”
GRIID, meanwhile, has had a deadline extended for it to go public through a “special purpose acquisition company” (SPAC) called Adit EdTech. The SPAC’s shareholders voted overwhelmingly to allow a six-month extension past a previous January deadline.
A report by GRIID filed in early December as part of an Adit EdTech Securities and Exchange Commission filing reveals that GRIID had suffered net losses of almost $37 million through the first nine months of 2022, compared to a net profit of $5.1 million for the same period of 2021. GRIID has operating losses of $13.7 million in the first nine months of 2022, with most of the remainder of its net losses coming from interest expenses.
In 2021, GRIID had an operating profit of $14.6 million as Bitcoin prices were higher.
That report also revealed that GRIID’s entire Bitcoin mining capacity is just 68 megawatts (MW). About 25 MW of that is at the Limestone site.
In addition to lower prices for Bitcoin, GRIID paid more for electricity in 2022.
GRIID has had to borrow additional funds at very high interest rates in recent months. The company’s interest expense in the first nine months of 2022 was $22.7 million, compared to just $2.6 million in the first nine months of 2021.
The company had to rework its lending agreement with Blockchain Access Limited in mid-2022. Rather than a line of credit with the company it now has a $57 million term loan.