US law firm files class action against BTC miner Marathon

By Raffaele Redi
• Updated

The quarrel is related to a 2020 operation

Bitcoin mining farm                                 
Marathon Digital Holding is considered one of the largest bitcoin miners in the US – Photo:Shutterstock

American law firm Kessler Topaz Meltzer and Check has filed a securities class action lawsuit against one of the largest global crypto miners, Nasdaq-listed Marathon Digital Holdings.

In 2020, Marathon placed six million shares of its restricted common stock on the market to build a data centre for up to 100-megawatts in the US city of Hardin, Montana. However, the US Security and Exchange Commission (SEC) started investigating the operations.

According to the law firm, following the news reported by the company in its Q3 2021 results, Marathon (MARA) stock fell $20.52, or 27%, to close at $55.40 per share on 15 November 2021.

Law firm’s allegations

According to the firm, the action alleges Marathon violated the federal securities laws, including omissions and fraudulent misrepresentations relating to the company’s business, operations, and prospects.

“As a result of Marathon’s materially misleading statements to the public, Marathon investors have suffered significant losses,” according to the law firm.

Marathon: ‘Cooperating with the SEC’

According to Marathon’s report on the issue, on 6 October 2020, the company entered into a series of agreements with multiple parties to design and build a data centre for up to 100-megawatts in Hardin.

“In conjunction therewith, the company filed a current report on 13 October 2020 disclosing that, pursuant to a Data Facility Services Agreement, Marathon issued six million shares of restricted Common Stock, in transactions exempt from registration under Section 4 of the Securities Act of 1933, as amended,” according to the company.

“During the quarter ended 30 September 2021, Marathon and certain of its executives received a subpoena to produce documents and communications concerning the Hardin, Montana data centre facility described in our Form 8-K dated 13 October 2020.”

“We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC,” said Marathon in the report.

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