By
Chimamanda U. Martha
April 19th, 2024
Marathon said it is cooperating with the SEC to provide the requested information, highlighting that it was dedicated to abiding by all relevant laws and rules.
Bitcoin mining firm Marathon Digital Holdings Inc (NASDAQ: MARA) has gotten a subpoena from the United States Securities and Exchange Commission (SEC) in connection with suspected violations of Federal securities laws.
According to reports from Bloomberg, the subpoena requests the production of certain documents related to the company’s recent public offering of securities. Specifically, the SEC is investigating whether the company violated the registration requirements of the Securities Act of 1933.
Markedly, the law mandates businesses to register with the SEC and give investors information, including financial statements, risk considerations, and other pertinent data. It is crucial to remember that receiving a subpoena does not necessarily mean the recipient has committed a crime. Rather, it simply means the SEC is interested in initiating an inquiry.
Notably, the news comes shortly after the Bitcoin miner announced an outstanding performance in its Q1 2023 report. Based on the report, Marathon Digital achieved its highest production month-on-month in March after mining a total of 825 BTC. Additionally, the company established that its Hashrate increased by 64% in Q1 2023 to 11.5 EH/s as of March 31, 2023.
In addition, Marathon also sold the Bitcoins it mined in February, as Coinspeaker reported at the time. According to the report, the company is currently having positive cash flow with total cash and cash equivalents unrestricted at $124.9 million.
Meanwhile, Marathon has previously received a subpoena from the SEC earlier in 2021. At the time, the regulator asked the Bitcoin miner to provide documents and information pertaining to its Montana data center facility.
Marathon said it is cooperating with the SEC to provide the requested information, highlighting that it was dedicated to abiding by all relevant laws and rules. However, the company noted that it cannot predict the outcome of the investigation or any potential regulatory action that may result.
Beyond Marathon Digital: Crypto Firms Come under SEC Scrutiny
Interestingly, receiving a subpoena from the SEC is not an uncommon occurrence for publicly traded companies and service providers in the crypto ecosystem. This is because the SEC has broad investigative powers and routinely conducts investigations into potential securities law violations.
Markedly, companies that receive subpoenas are typically required to provide the requested information and cooperate with the SEC’s investigation.
Notably, the recent SEC subpoena against Marathon Digital comes amid a recent regulatory crackdown on the blockchain industry. In the US, regulators have been scrutinizing the crypto ecosystem, and there have been several high-profile enforcement actions in recent months.
For example, Robinhood Markets Inc (NASDAQ: HOOD) recently received a subpoena from the SEC regarding its crypto ventures. While commenting on the update, Robinhood highlighted that the subpoena was issued in response to several crypto bankruptcies that took place last year.
Similarly, US regulators also probed into Hedge funds linked to Binance, the largest crypto exchange earlier in January. Additionally, some lawmakers were also mulling the possibility of criminal charges over concerns about money laundering.