Marathon Digital fined $138 million for breaching non-disclosure agreement triggers 2.5% drop in MARA stock

Marathon Digital Holdings, the world’s largest Bitcoin mining company by market capitalization, recently found itself in a tricky situation. recent press releaseThe company was fined a whopping $138 million for violating a non-disclosure or non-circumvention agreement — a type of contract that protects parties to a transaction from circumvention.

The lawsuit was filed by Michael Ho, a former co-founder of US Bitcoin Corp and currently chief strategy officer of another mining rig, Hut 83.

The breach of the agreement and the jury’s verdict in favor of Ho

In 2020, Michael Ho, former co-founder of US Bitcoin Corp and chief strategy officer of Hut 8 Mining Companydeveloped a growth strategy for Marathon Digital. The plan was to create a large Bitcoin mining center in North America. However, Marathon Digital allegedly implemented Ho’s strategy without compensating him for his efforts. Thus, violating the non-circumvention agreement between the two parties.

The court ruled in Ho’s favor, and Marathon Digital was fined a whopping $138 million. The decision underscores the importance of honoring contractual obligations and maintaining professional relationships in the cryptocurrency industry. As Ho’s defendant, David Affeld, a partner at Affeld England & Johnson LLP, puts it, “…ethical business practices are not optional; they are essential” to the integrity of the industry.

Bitcoin Miners Impact and Capitulation and Recovery

Following the court ruling, Marathon Digital (NASDAQ: MARA) stock has been on the decline. On Monday, the stock fell 3%, and the downward trend continued with an additional 2.5% drop in Tuesday’s pre-market session. Investors are keeping a close eye on the situation and the company must work hard to regain their trust.

Despite this problem, Marathon Digital Holdings remains a major player in Bitcoin mining. With a value of $6.77 billion, it is well ahead of its closest rival, CleanSparkvalued at $4.13 billion. Marathon recently doubled its mining power to 26.3 exahashes per second, largely due to improvements at its Ellendale center. In June alone, the company’s mining pool found 158 blocks, a 10% increase over last year.

In the same way, The broader Bitcoin mining industry is getting back on its feetWilly Woo, a well-known industry analyst, believes that the toughest times for miners are over. Typically, the lowest points occur when miners are making the least money.

The recent introduction of next-generation mining hardware, such as the M66 and S21 Pros, has contributed to the recovery of BTC price and hash rate.

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