- Marathon Digital received its second subpoena from the US SEC.
- The SEC alleges that the morning firm has violated federal securities laws.
- Marathon Digital has accrued several court filings against it.
The Montana-based BTC miner—Marathon Digital—has received yet another subpoena from the United States Securities and Exchange Commission (SEC) regarding its 100 megawatts data center.
On May 10, the BTC mining firm released a quarterly report explaining that it had received a subpoena a month ago, on April 10, under the allegations of violating federal securities laws. The crypto firm stated in its report that it was willing to cooperate with the US SEC.
Marathon Digital recalled when it first received a subpoena from the US SEC, claiming that as its third quarter ended on September 30, 2021, the company and its executives received a subpoena, demanding that they provide documents and communications concerning the data center facility located at Hardin, Montana.
“We understand that the Securities and Exchange Commission is investigating whether or not there could have been a violation of the federal securities laws; we at Marathon Digital are cooperating with the US SEC,” the firm said.
In the published quarterly report, the Bitcoin Mining firm listed its achievement and activities, including its shareholders’ agreement with FS Innovation LLC on January 27, 2023.
The partnership aimed to create an Abu Dhabi Global Markets company (ADGM). However, the ADGM Entity did not record any losses or gains as of the end of March 2023.
Marathon Digital’s Relationship With Silvergate Bank
Marathon Digital—formerly known as Verve Ventures—was first incorporated in 2010 in Nevada and has, since 2023, been solely focused on mining BTC within the Bitcoin ecosystem.
In July 2022, Marathon Digital entered a Revolving Credit and Security Agreement with the crashed Silvergate Bank. This agreement aimed for Silvergate to loan the mining firm $100,000.
According to Marathon Digital, the company entered into a $100,000 principal term loan with Silvergate Bank on the same day; however, in February 2023, Marathon Digital notified the bank of its intent to prepay its outstanding balance and terminate the term loan facility.
The lawsuit filed against Marathon Digital
In January 2021, a civil complaint was filed by Michael Ho—the plaintiff—against the BTC mining firm, claiming to have six causes of action against the firm.
According to Michael Ho’s complaint, Marathon Digital was accused of breach of implied contract, breach of a written agreement, services rendered, quasi-contract, negligent interference with prospective economic relations, and intentional interference with future economic ties.
Although the trial has been rescheduled to 2024, Marathon Digital believes it would come out victorious in this case since it consulted with legal counsel and found that it had no existing contract with Michael Ho.
Conclusion
History repeats itself as the US-based BTC mining firm has once again received a subpoena from the SEC. In a period where authorities are clamping down on crypto regulations, the SEC is investigating the 100 megawatts BTC mining firm for violating federal securities laws.
