The subpoena caused a direct impact on the price of the bitcoin mining firm’s competitors too.
The shares of Marathon Digital Holdings saw a sharp dip in the share market post it filed the 10-Q quarterly report with the US Securities and Exchange Commission (SEC). The publicly traded bitcoin mining firm revealed in its filing that the SEC is looking into the company’s financials for security violations. The subpoena Marathon received from the SEC on September 30, 2021, is connected to its 2020 signed 100-megawatts data center design to be built in Hardin. At the time, it had also issued 6 million worth of restricted common shares.
Subpoena for Marathon Digital
The news gave a big blow to the shares of the bitcoin mining firm and the price fell by up to 27%. The subpoena by SEC requires the firm to produce relevant documents and communication collateral connected to the Montana data center facility. The firm has guaranteed complete cooperation with the SEC in its investigations into violation of federal securities law. The subpoena caused a direct impact on the price of MARA’s competitors too, like Riot Blockchain, Bit Digital, Bitfarms and Hut 8.
As per a report by Cointelegraph, the company’s shares had reached a 6-year high earlier this month, with the firm amassing $460 million worth of Bitcoin. Also, just last week, the bitcoin mining firm had revealed a successful third quarter boasting 76% revenue growth compared to the second quarter. Recently, it announced its plans to buy more bitcoin and bitcoin miners, the funding for which was to be collected through a $500 million private debt offering i.e. through senior convertible notes.
Growing Regulatory Pressure
It is no surprise that cryptocurrencies are a favourite of the regulatory bodies across the world. With the crypto market growing every second, countries are formulating laws and rules to keep the market in check. It is widely known that there has been a shift in the US Securities and Exchange Commission’s regulatory position after Gary Gensler became the new SEC Chair. It has started looking into possible violations by bitcoin mining firms like Marathon Digital even though its principal interest is in areas of stable coins and decentralized finance protocols.
About Marathon Digital
Marathon Digital Holdings is a bitcoin mining firm that aims to be America’s largest mining operation at one of the lowest energy costs. As part of its growth strategy, the firm is working towards improving the cryptocurrency Bitcoin’s production through an increase in hash rate by adding more miners. It also wants to be a risk mitigator by adopting agile solutions so that it can make the business more resilient to future and present shocks and deterioration in the currency’s price. It offers its customers different ways to get Bitcoin exposure; through the coin’s direct purchase, buying of an ETF and investing in a producer.
This self-mining company earns profit through the direct exchange of the coins against cash. It uses extremely sophisticated and specialized technology and hardware in its mining operations. With $113 million worth of bitcoins minted this year alone, the bitcoin mining firm has also set up over 2000 miners in North Dakota.
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