JONESBOROUGH, Tenn. (WJHL) – A lawsuit requesting the shutdown of a Bitcoin mine in rural Washington County may hinge on when county officials knew that the operation next to a utility substation would be owned and run by a private company and not power distributor BrightRidge, new documents show.
On Wednesday, Chancellor John Rambo set another hearing for Dec. 8 and granted the company, Red Dog Technologies, the right to join as a defendant in Washington County’s suit against BrightRidge. The suit, filed Nov. 15, claims that a privately operated cryptocurrency mine is an “unpermitted use” in the A-3 (agricultural business) zone.
The county granted BrightRidge’s rezoning request for land it owns next to its substation at 1444 Bailey Bridge Road in the New Salem community of Limestone in February 2020. BrightRidge said the intended use was a “blockchain data center,” which, among other things, cryptocurrency mines are.
The county’s lawsuit claims it didn’t learn that BrightRidge wouldn’t be the direct operator of the facility until after neighboring residents voiced complaints about noise in May 2021.
At that point, the suit alleges the county learned “through an undisclosed relationship with unidentified contracting parties, BrightRidge had agreed and consented to Red Dog Technologies, LLC’s use of the property to operate a Bitcoin blockchain verification facility.”
BrightRidge’s attorney, Steve Darden, argued Wednesday that “it’s abundantly clear that Red Dog should be in this matter.”
Red Dog Technologies, which wrote in a Monday court filing that it expects a net profit of at least $36 million over the next 18 months from the mine, will have attorneys present Dec. 8 when Rambo takes the case back up.
Washington County sued Nov. 15 for a restraining order that would prevent Red Dog from continuing operation, but that suit names BrightRidge as the defendant.
BrightRidge owns the property next to its substation on Bailey Bridge Road and secured the property’s rezoning in February 2020 to A-3 “agricultural business” for a “blockchain data center.” The Washington County Planning Commission and later the full county commission both unanimously approved the request.
The county’s lawsuit alleges that BrightRidge didn’t disclose that a private company would operate the data center, and that while utilities are a permitted use under A-3, a private company mining cryptocurrency is not.
But in a counterclaim, Red Dog claims that the county was aware on Feb. 14, 2020 — before the rezoning passed the commission — “that the property would be rezoned for the operation of a block chain verification data center and that the block chain verification data center would be owned and operated by GRIID or a related entity, and not by BrightRidge;”
Feb. 14, 2020 is the date BrightRidge formally responded to a request for proposals by GRIID (Red Dog’s predecessor company) and bid to host a facility that would use up to 25 megawatts of power.
In addition to its claimed net profit of about $2 million a month, Red Dog is BrightRidge’s largest single electricity customer.
This is a developing story.