Marathon Digital, a digital asset technology company, which engages in Bitcoin (BTC) mining, has revealed it has received another subpoena from the United States Securities and Exchange Commission (SEC) relating to its 100-megawatt data center in Hardin, Montana.
This comes on the heels of Marathon Digital being subpoenaed in September 2021 for documents relating to the same data center. According to Marathon’s quarterly report filed May 10, it received the subpoena on April 10 “relating to, among other things, transactions with related parties” that occurred while it was creating the facility in Montana. The Bitcoin miner specified it is cooperating with the regulatory agency, following the Freash subpoena. As per the report, a spokesperson for Marathon stated,
“We understand that the SEC may be investigating whether there may have been any violations of the federal securities law. We are cooperating with the SEC.”
@SECGov has issued another subpoena to Marathon Digital.
Marathon Digital is a US based #Bitcoin mining firm.
The subpoena relates to ongoing investigation tied to Marathon Digital facility in Montana.
Marathon stated that #SEC may be investigating whether or not there have…
— CryptoSmind (@SmindCrypto) May 11, 2023
Marathon Posts Net Loss Of $7.2M
In addition, according to the Q1 earnings report, Marathon incurred a net loss of $7.2 million, or $0.05 per share, during the first fiscal quarter of 2023. This is lower than the $12.9 million net loss it reported in Q1, 2022. On the other hand, its revenue was $51.1 million for the quarter, marginally lower than the previous year’s revenue of $51.7 million.
The firm is one of the largest publicly traded crypto-mining companies by computing power in the world with facilities across the United States. Since the beginning of this year, Marathon share prices have surged almost 200%, outperforming Bitcoin (BTC) and the broader crypto market.
SEC Intensifies War On Crypto
It seems the recent subpoena is part of the crypto crackdown by the SEC. Over the past few months, the US regulatory agency has targetted several prominent cryptocurrency companies, including Coinbase, Kraken, and Beaxy among others. It was also reportedly planning to sue stablecoin issuer, Paxos Trust Company, over violating investor protection laws in its issue of the Binance USD (BUSD) stablecoin.
Recently, the SEC sued Bittrex in federal court last month, alleging it broke the regulator’s rules from 2017 through 2022 while bringing in at least $1.3 billion in revenue. The financial watchdog has intensified scrutiny in the crypto ecosystem after the dramatic collapse of Sam-Bankman Fried’s FTX Empire.
US SEC charges Bittrex with operating unregistered securities exchange https://t.co/xK15tHnXdM pic.twitter.com/vnbKVM9QpI
— Reuters (@Reuters) April 17, 2023
In a bid to ramp up crypto regulations, the SEC Chair Gary Gensler had requested the Biden Administration to allocate a staggering $2.4 billion in funding for the regulator, emphasizing the need to curb“misconduct” in the industry. Gensler requested the record funding to increase his agency’s staff count highlighting the need to push forward stringent crypto regulations citing “the Wild West of the crypto markets is rife with noncompliance.“
Gensler Acts As A War General
Not only additional funding but in February 2023, the SEC proposed new rules to make it more difficult for cryptocurrency firms to serve as digital asset custodians in the future and require companies to gain or maintain registration in order to hold customer assets.
🚨SCOOP: Prior to today's @FinancialCmte/@HouseAgGOP hearing on digital asset regulation, a memo was circulated among Democrat Committee members.
It contained "key messages" for the @FSCDems to stick to including supporting the @SECGov's total authority over crypto regulation,… pic.twitter.com/AabSfwquaw
— Eleanor Terrett (@EleanorTerrett) May 10, 2023
Furthermore, as per a recent House Financial Services Committee hearing on digital assets, a memo was distributed to Democratic committee members that specified that U.S. Democrats want to bring the crypto industry under their full control, with Gensler at the forefront.
As per the memo, both the SEC and the Commodity Futures Trading Commission (CFTC) agree that the SEC is the regulator that determines whether cryptocurrencies are securities. It somehow explains that Gensler is the general of the blatant war against the digital assets industry.