- The company announced this an hour before the news of the liquidation of Silvergate Capital
- Marathon explained its decision with a “new financial strategy”
- The miner received a revolving line of credit in the amount of $100 million in the fall of the year before last
Yesterday, March 8, it became known that Silvergate Capital is curtailing its activities. The news hit the crypto market, and, apparently, will have consequences in the long term.
Before that, most of the major CEXs, as well as Tether and MicroStrategy, cut off all ties with the bank. Now Marathon Digital has also reported on this.
Recall that in early February, the miner sold part of the BTC for the first time in two years. It is possible that the company used part of the money received to pay off the loan from Silvergate ahead of schedule.
Relevant notification appeared on the official Marathon page. Thus, the total debt of the company was reduced by $50 million. The miner also liquidated a revolving line of credit from the bank.
Notably, Marathon announced their decision just an hour before the news of Silvergate’s liquidation. In a statement for Cointelegraph Vice President of Communications Charlie Schumacher said the break with the bank was part of the firm’s new financial strategy.
CFO Hugh Gallagher commented on the situation in more detail:
“We are actively building a more reliable balance that will have more fiat and unlimited BTC. Given current conditions, we have determined that early repayment of the loan and withdrawal of the credit line is in the firm’s best interest.”
Marathon entered into this agreement with Silvergate back in October 2021. The miner received a $100 million revolving line of credit to purchase new hardware.
Like most other “players” in the industry, Marathon suffered significant losses due to the recession last year. In many ways, this determined the company’s new strategy to increase reserves and reduce accounts payable.
