JONESBOROUGH, Tenn. (WJHL) — Washington County commissioners will consider a proposed settlement Monday in their lawsuit against BrightRidge and Bitcoin mine operator Red Dog Technologies, a wholly owned subsidiary of GRIID Infrastructure.
An agenda for the called 6 p.m. meeting shows that after a presentation of a proposed settlement agreement, the commission will enter a closed executive session. Certain matters related to the lawsuit, filed in November 2021, can be discussed without the presence of the public or media.
After that, members of the public who sign up to address the settlement agreement issue will each have three minutes to speak. The only other item is discussion of the status and potential settlement of the lawsuit. GRIID, which gets about half its Bitcoin from the Red Dog site, lost $61 million in 2022 and $22 million in the first six months of 2023.
Located next to BrightRidge’s Bailey Bridge Road substation in Limestone, the “mine” — where hundreds of high-powered computers perform complex equations to “mine” the cryptocurrency or validate its transactions — has been the subject of controversy since May 2021. That’s when neighbors in the rural community began complaining about noise coming from the fans that are needed to cool the computers.
By late summer, commissioners learned that Zoning Administrator Angela Charles and County Attorney Allyson Wilkinson both believed the mine’s function did not comply with the A-3 (agriculture business) zoning designation. BrightRidge had requested the property be rezoned from A-1 (general agriculture) to A-3 in February 2020 for what it described as a “blockchain data center.”
The rezoning request, which county commissioners approved unanimously, did not mention a Bitcoin mine or an operator other than BrightRidge.
The commission demanded that BrightRidge shut the operation down in September 2021. When that didn’t happen, the commission filed suit.
Before the suit went to trial, Red Dog, BrightRidge and the county agreed to work toward a settlement. In June 2022, the commission approved a settlement that called for Red Dog to pay penalties totaling more than $200,000, relocate to the Washington County Industrial Park in Telford by the end of 2024, purchase the site for the new mine, and agree to penalties for decibel readings above 60 decibels.
The deal drew fresh public opposition from people living around the industrial park, and before it had time to be voted on in final form, a countywide election had changed the complexion of the commission. A follow-up vote on Nov. 28, 2022 failed 13-2, and early this year Washington County Chancery Court Judge John Rambo set a trial for Feb. 5-7, 2024.
Red Dog parent co. lost $22 million first 6 months of 2023
The county will be negotiating with a wounded company that once had massive growth plans and hopes of going public. GRIID entered an agreement in late 2021 with a special purpose acquisition company, Adit EdTech, to take it public. There was much talk of a $3.3 billion value and growing from about 50 megawatts of capacity to more than 1,000.
None of that happened, and when the price of Bitcoin plummeted in the spring of 2022, the company — with roughly half its production capacity in Limestone — found itself unable to pay its creditors. It restructured its loan and as of late 2022, owed more than $57 million.
Through the first six months of 2023, GRIID posted an operating loss of $9.4 million and a total loss of $22 million according to Adit EdTech SEC filings. The public offering has continued to be delayed, and the prospects of GRIID having the capacity to construct a new mining operation in Washington County would depend on the appetite of Blockchain Access, GRIID’s primary lender, to spend additional capital to stand up a new facility.