Marathon Digital, a leading терминалдарда miner, cuts ties with Silvergate Bank in the latest development aired on March 09. This development came at a time when Silvergate Capital Corporation (the parent company of Silvergate) decided to shut down banking operations.
Marathon Digital (MARA), one of the largest Bitcoin mining companies in the United States, is making headlines. Per the official блог, the mining firm completed the entire loan prepayment and ended its credit facilities with Silvergate.
Given the adverse market conditions, this development came when the crypto-friendly bank ended its operation.
The prepayment reduced the debt exposure by $50 million and increased the company’s unrestricted bitcoin holdings by 3,132 BTC, held as collateral.
“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,” said Hugh Gallagher, Marathon’s CFO in the statement.
Taking Steps to Help the Company
Reducing debt obligations will indeed help the firm and the mining industry as a whole. Marathon Digital is a тоо-кен казып алуу company that specializes in Bitcoin mining. As a mining company, its business model involves using high-powered computers to solve complex mathematical problems to validate Bitcoin transactions and earn rewards in the form of new bitcoins.
The firm requires significant capital investment in expensive computer hardware, electricity, and other operational costs to operate this business. The company undertook debt to finance these investments, which could be a source of financial strain.
Nonetheless, the mining giant proactively restored its balance sheet by paying off some of its debts and freeing up its restricted Bitcoins.
For instance, Marathon Digital тазаланды $30 million in revolver loans with Silvergate in December. Thereby setting free 3,615 BTC kept as collateral. Such examples will help struggling miners free up additional милдеттенмелер that could restrict further growth.
Silvergate Calls Quits on Operations
The timing of this development to reduce exposure was interesting. The trending crypto-friendly bank took steps to “wind down operations.” The announcement was “in light of recent industry and regulatory developments,” per the March 8 пресс-релиз. The Silvergate Bank liquidation plan included “full repayment of all deposits.”
The liquidation comes just a day after a report мүнөздүү hinting at a potential revival. The bank was discussing ways to avoid a shutdown with US federal regulators. Needless to say, the decision has шартталган аябагандай чоң кооптонткон activity concerning its stock price ($SI).
Numerous famous clients кесүү contact with the said bank as covered by BeInCrypto. Silvergate Bank’s closure may leave rippling effects on the crypto industry and pave the way for existing and new entrants to fill the void.
Sponsored
Sponsored
баш тартуу
BeInCrypto акыркы окуялар жөнүндө расмий билдирүү алуу үчүн окуяга катышкан компанияга же жеке адамга кайрылды, бирок ал азырынча жооп ала элек.
Source: https://beincrypto.com/marathon-ends-credit-facilities-silvergate-prepays-loan/