Marathon Digital Holdings is facing a class action lawsuit alleging that it violated federal securities laws.
The Klein Law Firm has filed a complaint on behalf of Marathon Digital shareholders. It claims that the company made false and misleading statements over nearly two years. Allegedly, Marathon failed to disclose information that would have had a material negative impact on its financial condition.
Marathon Digital’s 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 receive Bitcoin as a reward.
The complaint refers to the period from May 10, 2021, to February 28, 2023. It alleges that Marathon Digital overstated the effectiveness of its disclosure controls and procedures and internal control over financial reporting. This, in turn, led to the company misstating its revenues and cost of revenue during the period in question.
According to the lawsuit, the fraud has had a material impact on the investors who are involved.
The shareholders who suffered a loss thanks to Marathon have until May 30, 2023, to petition the court for lead plaintiff status.
The Fortunes of Marathon
Marathon’s operational hash rate rose by 64% during the first quarter of 2023, from 7.0 exahashes to 11.5 exahashes, which led to an increase in its Bitcoin production by 41% from the prior quarter to a record 2,195 bitcoin in Q1. The company also cut its debt by $50 million and upped its unrestricted bitcoin holdings by 3,132 bitcoin during the quarter.
The firm has struggled to ease its debt burdens and free up Bitcoin held as collateral. In March, the firm moved to end its relationship with ailing Silvergate Bank, nixing its credit facilities.
In November 2021, Marathon’s share price fell by 27% amid news of a subpoena from the Securities and Exchange Commission (SEC). The agency launched an investigation into Marathon’s dealings with Beowulf Energy and alleged securities law violations.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
