BTC Miner Marathon Digital ends credit facility with troubled Silvergate Bank

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Key Takeaways

  • Marathon has reduced its debt by $50 million and has increased its unrestricted bitcoin holdings by 3,132 BTC. 
  • The miner has prepaid its outstanding loan balance to Silvergate and would be ending the revolving line of credit facility between the firms.

Leading Bitcoin Miner Marathon Digital has announced ending its credit facilities with digital asset-focused Silvergate Bank. The latest development comes amid Silvergate Bank stating that it is shutting down and liquidating its assets.

Marathon Digital, one of the largest publicly traded bitcoin miners, in its official statement, noted that it had prepaid its outstanding loan balance and would be ending the revolving line of credit facility between Silvergate after providing the crypto Bank with the mandated thirty-day notice in early February.

The miner noted that owing to the loan repayment, it was able to reduce its debt obligation by $50 million and increased its unrestricted bitcoin holdings by 3,132 BTC as the BTC that was being held as collateral by a third-party custodian was now returned to the company.

“We have reduced our leverage by approximately $50 million, immediately freed up approximately $75 million in bitcoin that was being held as collateral for the term loan, and reduced our annual cash interest costs and facility fees by approximately $5 million,” noted Hugh Gallagher, the Company’s CFO in the statement.

He further added that the miner had been building a more robust balance sheet that features increased levels of cash and unrestricted bitcoin holdings. “Given our current cash position, we determined that it was in the Company’s best interest to prepay our term loan and eliminate both the term loan and RLOC facilities,” Hugh noted

In the wake of the bear market, Marathon has constantly been working towards shoring up its liquidity through debt payments and restructurings. Earlier this year, the BTC miner announced that it had fully paid off $30 million in revolver loans with Silvergate in December, freeing up almost 3,615 bitcoins (BTC) that had been pledged as collateral.

Marathon Digital also sold 650 bitcoins out of the 683 it mined in February, noting the sale was to help pay for operating expenses and for general corporate purposes. Marathon had sold 1,500 bitcoins in January, which marked the first time the miner had unloaded any of its BTC holdings.

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Saniya Raahath
Saniya Raahath

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