- Crypto mining firm Marathon Digital Holdings has been served with a second subpoena over potential security law breaches in its Montana data center.
- Marathon Digital reported a net loss of $7 million in the first quarter which shows an improvement compared to last year’s Q1 losses of $12.9 million.
- In another development, the firm has rolled out plans to partner with Zero Two to create a high-end BTC mining facility in Abu Dhabi.
Digital asset miners have remained under the radar of authorities in recent weeks as both the White House and the SEC launch fresh attacks.
Marathon Digital, a top Bitcoin (BTC) mining firm, has disclosed in its quarterly report that it received a subpoena from the Securities and Exchange Commission (SEC) on April 10 relating to its over 100-megawatt mining plant In Montana. The basis for the subpoena centered on an alleged breach of security laws by the firm during the formation process.
According to the report, the firm is cooperating with the Commission on how it handled transactions with related parties among others
“We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC,” the report reads.
This marks the second subpoena regarding the same subject matter signifying that the SEC may be keen on escalating the matter. In Sept 2021, Marathon Digital was hit with the first subpoena for documents leading up to the establishment of the center.
According to a Bloomberg report, the company admitted to specific “accounting errors” in statements to the SEC regarding the center. The announcement of the second subpoena comes when the White House is pushing a new cryptocurrency mining tax law popularly known as the DAME Tax.
Revenue uptick to the rescue
Marathon Digital posted its Q1 2023 statement revealing a $7 million loss, about $0.05 per share in the first three months of the year. While this may look bad coupled with regulatory hurdles miners have faced this year including a looming tax hike coming from the White House, there is a bright side.
Compared with last year’s Q1 loss of $12.9 million and a revenue of $51.1 million this year, the firm is up to a strong start as stated by its Chief Executive, Fred Thiel.
“After weathering a tumultuous 2022 that tested the resilience of our entire industry, this year is off to a strong start as we grew our hash rate, reduced our cost to mine, and improved our balance sheet during the first quarter.”
MARA, the company’s stock has surged nearly 200% this year outperforming BTC and trades at $10.15. All looks good for the firm considering a spike in BTC mining profitability hinged on BTC Ordinals.
