Marathon Digital’s Deal to Establish a New Data Center Draws the Attention of the US Securities and Exchange Commission

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The US Securities and Exchange Commission has requested papers and emails from one of Marathon Digital Holdings’ data mining center in Hardin, Montana.

 The SEC subpoenaed the self-mining firm, one of the largest in the United States, to deliver a detailed financial report, known as a Form 10-Q, in response to an inquiry into possible federal securities law violations. Marathon Digital claims to be cooperating with the SEC, but did not provide any details on the subpoena.

Marathon Digital had been required by the Securities and Exchange Commission to produce documents and correspondence for the Montana facility in the third quarter of 2021, which it had planned to create and store Bitcoin miners in October 2020. 

Marathon Digital successfully completed the assignment

Marathon Digital issued 6 million shares of restricted common stock in unregulated transactions, which may have been a factor. Shares in the Montana plant appear to be tied to contracts for its design and construction.

As a result, Marathon Digital is a self-mining firm, with the primary objective of mining Bitcoin using specialized hardware it owns and profiting from the exchange of the resulting coins for fiat currency. 

The company has stated that it intends to enhance its importance over the next year through “the acquisition of Bitcoin or Bitcoin mining machines” Senior convertible notes, a type of issue in which investors earn interest in exchange for providing a business with cash resources, were used to raise the $500 million (about Rs. 3,722 crore) required for the expansion.

The Securities and Exchange Commission (SEC) is becoming increasingly interested in blockchain companies that create cryptocurrencies, particularly those that undertake initial coin offerings (ICOs) and provide investment contracts. Marathon Digital, a mining operation, does not fall into this category. 

The SEC appears to have taken action against a cryptocurrency mining company

The new SEC Chairman Gary Gensler’s new regulatory stance on bitcoin companies is keeping investors on their toes. The agency has placed a premium on stablecoins and altcoins, as well as decentralised finance (DeFi) protocols on Ethereum and other networks.

According to sources, the value of Marathon Digital’s stock plummeted immediately upon learning of the subpoena. On Monday, Nasdaq, its shares plunged 17% to $63.07 (roughly Rs. 4,691). (MARA).

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