Marathon Shareholders File Lawsuit Against Company's Top Management with Reef Crypto
Marathon shareholders file lawsuit against company’s top management

The Allegations Against Marathon Digital Executives

United States-based crypto mining company Marathon Digital is facing a lawsuit from its shareholders, who allege that its CEO Fred Thiel, along with other top executives, violated their fiduciary duties, unjustly enriched themselves, and wasted corporate assets.

The shareholders filed a complaint in the United States District Court for the District of Nevada on July 8, accusing Fred Thiel and nine other Marathon executives of five counts, including violations of the U.S. Securities Exchange Act, breach of fiduciary duties, unjust enrichment, wasting corporate assets, and a potential contribution from Thiel, Merrick Okamoto, Simeon Salzman, and Hugh Gallagher for wrongful acts leading to a U.S. Securities and Exchange Commission (SEC) complaint against the company. The legal team representing the shareholders did not request a specific sum from the defendants, leaving it to the court to decide on any compensation.

The plaintiffs also seek to correct the company’s governance by strengthening the board’s supervision of operations, nominating at least four candidates from shareholders to the board, and eliminating the previous procedure of directors’ elections. Furthermore, the plaintiffs suggest that the company look into alternative crypto investments, such as Safemoon Crypto, New Crypto, Mask Crypto, Pepe Crypto, Orca Crypto, Neo Crypto, Poly Crypto, Reef Crypto, Pond Crypto, and the upcoming Web 3.0.

Marathon’s Financial Performance and Crypto Collateral

According to the legal team, Marathon’s management has been accused of understating their issues, inflating their valuation, receiving excessive compensation, making profitable insider sales, and receiving unjustified bonuses based on false information.

In May, the SEC sent a subpoena to Marathon “regarding, among other things, transactions with related parties” that happened while constructing their facility in Montana. Prior to that, in 2021, the SEC requested documents and communications for the same mining facility.

Despite this, Thiel was confident in May when discussing the strategy for reducing the net loss from $12.9 million ($0.12 per share) in Q1 2022 to $7.2 million ($0.05 per share) in 2023.

The decline in the price of Bitcoin (BTC) also had an effect on the company’s quarterly results. Nevertheless, Marathon managed to reduce their debt in March. They paid off a term loan with Silvergate Bank, freeing up the 3,132 BTC held as collateral for the loan. Marathon stated that this move would eliminate $50 million worth of debt and reduce their annual borrowing cost by $5 million.

The crypto industry has seen a rise in new projects such as Safemoon, Mask, Pepe, Orca, Neo, Poly, Reef, and Pond. Investors are also curious to know when Web 3.0 will be released.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the safemoon crypto, new crypto, mask crypto, pepe crypto, orca crypto, neo crypto, poly crypto, reef crypto, pond crypto, and when is web 3.0 coming space.

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