Marathon Announce $80M Exposure to Compute North

Digital assets mining company Marathon Digital Holdings announced that it has over $80 million of exposure to crypto mining data center Compute North which recently filed for bankruptcy at a Texas court. 

According to Marathon Digital, its financial exposure to Compute North stems from “$10 million in convertible preferred stock of Compute North Holdings, Inc. and $21.3 million related to an unsecured senior promissory note with Compute North LLC.” Previously, Compute North stated the $21.3 million senior promissory note while declaring its debt.

The debt came from installing 40,000 Bitcoin (BTC) miners in the West Texas wind-powered facility of Compute North. Additionally, Marathon Digital Holdings made a payment of $50 million in operating deposits to Compute North entities. Together, these deposits were made in relation to King Mountain and Wolf Hollow security deposits and prepayments.

The deposits all contributed to accelerating the ongoing operation of those sites. Noteworthy is the fact that Marathon Digital had only begun to expand its hosting engagement with Compute North in Q2 of 2022. While stating its financial exposure to Compute North, Marathon still expresses its sympathy and solidarity for the troubled firm.

Marathon Moves 3,000 Miners From Compute North

As per the published statement, “Compute North has been a supportive partner, and we respect this voluntary step to stabilize their business. Based on the information available today, we do not anticipate these proceedings impacting our current operations or our ability to achieve our primary target of 23 exahashes per second in 2023.”

“We are in active discussions with Compute North’s management and intend to closely monitor the progress of their proceedings. While we expect operations to continue as originally anticipated, our asset-light model provides us with the optionality to relocate our miners to other locations, should the need arise. We believe this agility is a particularly valuable strategic advantage we maintain given current market conditions.”

Although not connected to the BTC mining hosting service provider’s bankruptcy process, Marathon Digital is in the middle of moving 3,000 miners from Compute North’s facilities in Nebraska and South Dakota to new facilities. Marathon Digital claimed that this was already scheduled for October 3rd in agreement with the expiration of the company’s contract. 

Also, the United States court approved first-day motions for Compute North before the bankruptcy process. In effect, Compute North can operate its cash management systems, pay insurance obligations and file a list of its creditors.