Liquidation of Silvergate: Marathon Digital recovers its bitcoins

Bye bye, Silvergate! – The mining company Marathon Holdings announced on March 8 that it had sold out and closed all the accounts and credit she still had with Silvergate Bank. As a reminder, this bank has just carried out its voluntary liquidation for reasons that everyone knows. But it must be believed that the minor had felt the wind turn, since at the beginning of February, he had already warned Silvergate of his intentions.

Marathon Digital balances its various accounts and credit at Silvergate…

The announcement of Marathon Digital Holdings came only an hour after that of Silvergate. The number 1 in cryptocurrency mining has announced that it has fully refunded a term loan and that he was also terminating his credit facilities with the bank. Marathon has followed suit and joined other major players in the sector, such as Coinbase, Circle, Microstrategy, Tether or Paxos who have distanced themselves from Silvergate Bank.

And this decision was not taken at the last minute, since at the beginning of February, the Marathon teams had filed a notice with the bank in difficulty. The legal period of 30 days being over, it is completely legitimate that the decisions are finally effective. THE tight timing of yesterday is therefore only a simple coincidence.

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… and take the opportunity to strengthen its cash flow in bitcoins and cash

It was also about putting END to a line of revolving credit opened by Marathon, but which was void at the time of closing anyway. After the publication news, Hugh Gallagherthe financial director of Marathon, wanted to reassure observers and indirectly also his own investors, while taking stock of the situation of the company:

“Our industry has changed significantly since we set up these facilities last summer, and we have adapted our financial strategy accordingly. Given our current cash position, we have determined that it is in the company’s best interests to prepay our term loan and eliminate both the term loan and the credit facilities. As a result, we reduced our leverage by approximately $50 million, immediately released approximately $75 million in bitcoins that were held as collateral for the term loan, and reduced our annual interest and setup fees. approximately $5 million. »

THE 75 million of dollars in bitcoins correspond to 3,132 BTC which were deposited as collateral and which were repatriated to the company. Charlie Schumacherhead of corporate communications clarified that the separation from Silvergate was part of a strategy wider. It was a matter of building up a war chest by bitcoins and in cash, while reducing the company’s indebtedness. It is partly done.

As a reminder, Marathon Digital Holdings owns, according to CoinGecko, the second largest bitcoin reserve behind Microstrategy. Michael J. Saylor’s company owns 129,699 and the miner, 10,054. Nice war chest for Marathon which will however have to face increasingly enterprising competition, in particular from TeraWulf which has just announced that it has connected nearly 8,000 ASICs at a nuclear power plant.

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