Bitcoin Miner Marathon Digital Unfazed by $81.3M Bankruptcy Data Center Exposure
by James · October 7, 2022
In its latest monthly report, Bitcoin miner Marathon Digital disclosed $81.3 million exposure in the now-bankrupt Compute North data center.
The publicly traded mining company had invested $10 million in convertible preferred stock and $21.3 million in unsecured senior promissory notes in the bankrupt data center Compute North.
Marathon added that it had paid approximately $50 million to Compute North as an operating deposit for hosting services, primarily at its Wolf Hollow and King Mountain facilities in Texas.
The latter firm filed for Chapter 11 bankruptcy on September 22, citing mounting pressure from the effects of crypto winter and rising energy costs.
Despite the data center’s financial problems, Marathon Digital stated that it “has not experienced any significant negative impacts on operations at King Mountain.” Marathon’s “asset light” approach means the firm does not build or own mining facilities, relying on third parties such as Compute North for its operations.
However, the company disclosed that it experienced “some delays” at Wolf Hollow, which Compute North said was “attributed to a regulatory matter.”
“While we expect operations to continue as originally anticipated, our asset light model gives us the ability to move our miners to other locations, should the need arise,” Marathon said in a statement.
Compute North, one of the world’s largest providers of crypto mining infrastructure with facilities in Texas, Nebraska and South Dakota, raised $385 million in strategic funding in February of this year. The firm’s other major clients include Compass Mining, Hive Blockchain and Atlas Mining.
Neither Marathon Digital nor Compute North have responded Decryptits request for comment at press time.
Marathon has $207 million in Bitcoin
Marathon’s monthly report revealed that the firm currently holds 10,670 Bitcoin with a “fair market value” of $207.3 million. The firm said it produced 360 BTC in September and 616 BTC during the third quarter of this year.
On a year-over-year basis, Marathon reported a 23% increase in Bitcoin production, with 2,582 BTC mined as of September 30.
According to Marathon CEO Fred Thiel, the firm currently has around 57,000 active Bitcoin miners deployed, producing approximately 5.7 EH/s.
“We expect to continue building our hashrate in the fourth quarter as approximately 19,000 additional miners, representing approximately 2.0 exahashes per second, are expected to come online over the next 30 days,” Thiel said.
Marathon’s shares, which trade on the Nasdaq exchange, are up about 2% in premarket trading on Friday, changing hands at $13.10 at press time. The firm’s shares have grown 21.69% in the past five days, and more than 12% in the past month.
