Mar 01, 2023

Marathon Digital to Restate Financial Statements After SEC Errors

Marathon Digital Holdings, a Bitcoin (BTC) miner, has announced that it will be restating its financial statements due to some accounting errors that were pointed out by the United States Securities and Exchange Commission (SEC). According to a Feb. 27 SEC filing, Marathon will be reissuing its unaudited Q1, Q2, and Q3 quarterly reports from 2021 and 2022, as well as its audited annual report from 2021.

The SEC highlighted two issues with Marathon’s financial statements. Firstly, the method of calculating impairment on digital assets was incorrect. Secondly, Marathon incorrectly determined that it was acting as an agent rather than a principal while operating a Bitcoin mining pool. A principal is an entity that has the legal authority for decisions, while an agent is an entity that can only act on behalf of a principal.

Marathon noted that by changing the determination of its role in operating the pool from an agent to a principal, revenues and cost of revenues will see minor increases but does not believe the change will impact its bottom line. The restatement of the Impacted Financial Statements is not expected to have any impact on total margin, operating income or net income in 2021 or in any of the interim periods in 2021 or 2022.

Due to the accounting issues, Marathon has postponed its fourth-quarter 2022 earnings call and the publication of its corresponding financial results. The miner intends to file its results for 2022 by March 16 and has notified the SEC that it will take up to 15 days to make the necessary corrections to the report, which was previously due by March 1.

On Feb. 2, Marathon announced that it had sold 1,500 BTC throughout January, marking the first time it had sold Bitcoin since Oct. 1, 2020, as it looks to build up a “war chest” of both cash and Bitcoin and ensure it can be flexible throughout 2023.

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