Major Bitcoin mining company Marathon Digital Holdings has been hit with a substantial fine of $138 million.
The penalty stems from a breach of a non-disclosure or non-circumvention agreement, according to a recent press release.
The lawsuit was brought by Michael Ho, a former co-founder of US Bitcoin Corp and currently the chief strategy officer at Hut 8, another mining firm.
Ho secured a unanimous jury verdict in his favor, underscoring the importance of adhering to contractual agreements in the business world.
Ho Developed Growth Strategy for Marathon
A non-circumvention agreement is designed to protect parties in a transaction from being bypassed, ensuring that all involved are duly compensated for their contributions and proprietary information.
Affeld England & Johnson LLP, the law firm representing Ho, said that he had developed a growth strategy for Marathon Digital in 2020, which included plans for establishing a large-scale Bitcoin mining facility in North America.
However, Marathon allegedly executed Ho’s strategy without providing him with the agreed-upon compensation, thus violating the non-circumvention agreement.
The largest Bitcoin miner Marathon Digital (NASDAQ: MARA) has been slapped $139 million in fine against the charges of breach of a non-disclosure agreement. This happened as the Bitcoin miner lost a jury verdict against Michael Ho, the former co-founder of US Bitcoin Corp and … pic.twitter.com/Y1bKD5Adwm
— Parrot Coin (@parrot_coins) July 23, 2024
“The decision underscores the necessity of ethical business practices and honoring commitments,” David Affeld, a partner at Affeld England & Johnson LLP, reportedly said.
“It sends a powerful message that ethical business practices are not optional; they are essential.”
The case was jointly handled by Affeld and Gregg Zucker from Foundation Law Group LLP, who initiated the original legal action.
They believe the $138 million verdict vindicates Ho’s expertise and reinforces the need to respect professional relationships and contractual obligations.
Marathon Digital Remains a Leader in Bitcoin Mining
Despite the legal setback, Marathon Digital Holdings remains a dominant force in the Bitcoin mining industry.
With a market capitalization of $6.77 billion, it significantly outpaces its closest competitor, CleanSpark, which stands at $4.13 billion.
In recent months, Marathon has also doubled its operational hashrate to 26.3 exahashes per second, largely due to enhancements at its Ellendale facility.
The company’s mining pool captured 158 blocks in June alone, marking a 10% increase from the previous year.
Last month, Marathon Digital announced its foray into mining Kaspa (KAS), a token designed to address Bitcoin’s scalability issue, as part of its diversification strategy.
Since September, Marathon Digital has mined approximately $16 million worth of Kaspa tokens, aiming to capitalize on the higher profit margins associated with Kaspa mining machines, which have reached up to 95% in some cases.
Marathon has acquired around 60 petahashes of KS3, KS5, and KS5 Pro ASICs specifically for Kaspa mining, with half of the equipment currently operational and the rest scheduled to be installed in the third quarter.
More recently, Marathon launched a 2-megawatt pilot project in the Satakunta region of Finland, which aims to warm the community using the heat generated from digital asset computing.
Bitcoin miners are seeking ways to augment their revenue following the 2024 Bitcoin halving, which reduced block rewards from 6.25 BTC to 3.125 BTC.
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