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Home»News»Cryptocurrency»Marathon Digital terminates its lines of credit with Silvergate Bank

Marathon Digital terminates its lines of credit with Silvergate Bank

MatthewBy MatthewMarch 9, 2023No Comments3 Mins Read
Marathon Digital terminates its lines of credit with Silvergate Bank
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bitcoin mining company Marathon Digital has repaid its installment loan and terminated its credit lines with Silvergate Bank, pro-crypto financial entity, just when the bank has announced that it will stop operating.

Marathon announced on March 8 that it had prepaid the outstanding balance of its loan earlier that day and would terminate the revolving credit facility between the two companies after giving Silvergate Bank the required 30-day notice in early February.

Marathon Digital Holdings has repaid its term loan and terminated its credit facilities with Silvergate Bank, reducing Marathon’s debt by $50 million and increasing the Company’s unrestricted bitcoin holdings by 3,132 BTC. Read our full update here: https://t.co/tihTTagfhR

— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) March 8, 2023

Marathon’s announcement came less than an hour after Silvergate Bank’s holding company, Silvergate Capital Corporation, announced that it would voluntarily liquidate the bank and would reduce its operations “in light of recent industry and regulatory developments.”

Cointelegraph reached out to Marathon Digital to find out if the timing of the announcement had anything to do with the bank’s latest news, but has not received a response by press time.

In the ad, Marathon claims that the move will release the 3,132 bitcoins (BTC) – valued at more than $68 million at current prices – that it held as collateral for the loan. This would eliminate a debt of USD 50 million and reduce its annual borrowing costs by USD 5 million.

Marathon’s CFO, Hugh Gallagher, pointed out that “the cryptocurrency sector has changed significantly” since the company opened lending facilities with Silvergate Bank last summer, adding:

“We have been actively building a stronger balance sheet that features higher levels of cash and unrestricted bitcoin holdings. Given our current cash position, we have decided that it was in the company’s best interest to repay our term loan early and eliminate both the loan term as the RLOC lines”.

According to a previous filing, Marathon secured the $100 million revolving credit facility with Silvergate Bank in October 2021 and he intended to use it to buy Bitcoin mining equipment and finance his mining operations.

Read:  Chamber of Digital Commerce Says “The Time Has Come” for the SEC to Approve a Bitcoin ETF

Last month, Marathon’s VP of corporate communications, Charlie Schumacher, suggested that the company is trying to establish a good liquidity balance, comprised of both cash and Bitcoin, and trying to keep paying down debt as it grows. their cash reserves.

The comments came on February 3, after news broke that the firm had sold Bitcoin for the first time since 2020.

According to CoinGecko, Marathon is the second largest publicly traded Bitcoin holder, second only to the software analytics firm; MicroStrategy.

Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.

Keep reading:

Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.

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