Marathon Digital Holdings is facing a class action lawsuit alleging it violated federal securities laws.
The Klein Law Firm filed a file complaint On behalf of the shareholders of Marathon Digital. It claims that the company made false and misleading statements over a period of nearly two years. Marathon allegedly failed to disclose information that could have had a material adverse effect on its financial situation.
Marathon Digital Disclosures
Marathon Digital Holdings, Inc. is a company that supports and secures the Bitcoin ecosystem through mining operations. Miners use powerful computers to verify Bitcoin transactions on the blockchain and get Bitcoin as a reward.
The complaint refers to the period from May 10, 2021 to February 28, 2023. It alleges that Marathon Digital exaggerated the effectiveness of disclosure controls and procedures and internal control over financial reporting. This, in turn, led the company to err in determining its revenue and cost of revenue during the relevant period.
According to the lawsuit, the fraud had a material impact on the investors involved.
Shareholders who have suffered a loss thanks to Marathon have until May 30, 2023 until May 30, 2023 petition The court for the position of the main plaintiff.
Marathon fortunes
Marathon’s operational hash rate increased by 64% during the first quarter of 2023, from 7.0 exahashes to 11.5 exahashes, resulting in a 41% increase in Bitcoin production from the previous quarter to a record 2,195 Bitcoin in the first quarter. The company also reduced debt by $50 million and increased its unrestricted bitcoin holdings by 3,132 bitcoins during the quarter.
The company struggled to relieve its debt burden and free up bitcoins held as collateral. In March, the company moved to end its relationship with troubled Silvergate Bank, canceling its credit facility.
In November 2021, Marathon’s share price fell 27% amid news of a subpoena from the Securities and Exchange Commission (SEC). The agency launched an investigation into Marathon’s dealings with the energy company Beowulf and alleged violations of securities law.
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