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Marathon Digital terminates credit score amenities with Silvergate Financial institution


Bitcoin mining agency Marathon Digital has paid off its time period mortgage and terminated its credit score amenities with crypto-friendly Silvergate Financial institution, simply because the financial institution introduced will probably be winding down operations.

Marathon announced on Mar. 8 that it had pay as you go its excellent mortgage stability earlier that day, and can be terminating the revolving line of credit score facility between the companies after offering Silvergate Financial institution with the required 30-day discover in early February.

The announcement from Marathon got here lower than an hour after Silvergate Financial institution’s holding firm — Silvergate Capital Company — introduced it will be voluntarily liquidating the bank and winding down operations “in gentle of current business and regulatory developments.”

Cointelegraph reached out to Marathon Digital to grasp whether or not the timing of the announcement had something to do with the financial institution’s most up-to-date improvement, however didn’t obtain a response by the point of publication. 

Within the announcement, Marathon mentioned the transfer will liberate the three,132 Bitcoin (BTC) — price over $68 million on the time of writing — held as collateral for the mortgage. This could get rid of $50 million price of debt and cut back its annual borrowing prices by $5 million, it mentioned. 

Marathon’s chief monetary officer Hugh Gallagher famous that the crypto “business has considerably modified” because the agency had opened the lending amenities with Silvergate Financial institution final summer season, including:

“We have now been actively constructing a extra strong stability sheet that options elevated ranges of money and unrestricted bitcoin holdings. Given our present money place, we decided that it was within the Firm’s greatest curiosity to prepay our time period mortgage and get rid of each the time period mortgage and RLOC amenities.”

Based on a previous submitting, Marathon secured the $100 million revolving credit score facility with Silvergate Financial institution in October, 2021 and supposed to make use of it to purchase Bitcoin mining equipment and fund its mining operations.

Associated: Impact of the Silvergate collapse on crypto — Watch The Market Report live

Final month, Marathon’s vp of company communications Charlie Schumacher instructed the agency is seeking to construct a “battle chest” of liquidity, composed of each money and Bitcoin, and is seeking to proceed paying down debt while rising its money positions.

The feedback got here on Feb. 3, following stories that the agency had sold Bitcoin for the first time since 2020.

Marathon is the second-biggest publicly listed holder of Bitcoin according to CoinGecko, overwhelmed solely by software program analytics firm MicroStrategy.