Anonymous France

Crypto Mining Firm Marathon Digital Terminates Loan with Silvergate Bank

• Marathon Digital Holdings has repaid its term loan and terminated its credit facilities with Silvergate Bank.
• The move will free up the 3,132 Bitcoin held as collateral for the loan, reducing debt by $50 million and annual borrowing costs by $5 million.
• The decision to end its loan facilities with Silvergate Bank follows a shift in Marathon’s long-term financial strategy to build liquidity.

Marathon Digital Terminates Credit Facilities With Silvergate Bank

Bitcoin mining firm Marathon Digital has paid off its term loan and terminated its credit facilities with Silvergate Bank, just as the crypto-friendly bank announced it would be winding down operations.

Termination of Loan Agreement

Marathon announced on March 8 that it had prepaid its outstanding loan balance earlier that day and would be terminating the revolving line of credit facility between the firms after providing Silvergate Bank with the required 30-day notice in early February.

Increase in Bitcoin Holdings

The announcement from Marathon came less than an hour after Silvergate Capital Corporation announced it would be voluntarily liquidating the bank and winding down operations “in light of recent industry and regulatory developments.” The move will free up the 3,132 Bitcoin held as collateral for the loan, reducing debt by $50 million and increasing Marathon’s unrestricted bitcoin holdings by 3,132 BTC — worth over $68 million at the time of writing — thereby eliminating $50 million worth of debt and reducing its annual borrowing costs by $5 million.

Shift in Long Term Financial Strategy

Marathon chief financial officer Hugh Gallagher noted that the crypto “industry has significantly changed” since they opened lending facilities with Silvergate last summer, adding: “We have been actively building a more robust balance sheet that features increased levels of cash and unrestricted Bitcoin holdings.” This shift in their long-term financial strategy signals an effort to increase liquidity across their business operations.

Conclusion

Marathon’s decision to terminate their agreement with Silvergate Bank is indicative of a strategic shift towards building greater liquidity through increased cash reserves and unrestricted Bitcoin holdings. By doing so, they have freed up valuable resources that can be deployed to further benefit their business operations moving forward.