Marathon Digital, the largest Bitcoin mining company by market capitalization, has been hit with a $138 million fine after being found guilty of breaching a non-disclosure and non-circumvention agreement with Michael Ho, a former executive.
Michael Ho, who co-founded US Bitcoin Corp and served as chief strategy officer at Hut 8, secured a unanimous jury verdict in his favor against Marathon Digital Holdings. The lawsuit centered on a breach of contract, specifically a non-circumvention agreement designed to prevent parties from bypassing each other in business transactions.
In 2020, Michael Ho developed a comprehensive growth strategy for Marathon, which included plans for a large-scale Bitcoin mining facility in North America. According to Ho’s legal representation, Marathon used his strategy without compensating him for the proprietary information, thus violating their agreement.
David Affeld, a partner at Affeld England & Johnson LLP, the law firm representing Ho, emphasized the significance of the verdict. He noted that it underscores the importance of ethical business practices and honoring commitments. Affeld stated, “It sends a powerful message that ethical business practices are not optional, they are essential.” He also highlighted that the $138 million jury verdict validates Ho’s contributions and stresses the need to respect contractual obligations and professional relationships.
Despite the legal setback, Marathon Digital remains the world’s largest Bitcoin mining firm based on market capitalization. Valued at $6.77 billion, Marathon significantly surpasses its closest competitor, CleanSpark, which has a market capitalization of $4.13 billion.
In June, Marathon Digital reported a year-over-year doubling of its operational hashrate, reaching 26.3 exahashes per second (EH/s). This growth was largely attributed to the full operational status of their Ellendate facility in July. Fred Thiel, CEO and chairman of Marathon Digital, announced that their mining pool captured 158 blocks in June, marking a 10% increase from the previous year.
This case and its outcome highlight the critical importance of adhering to business agreements and maintaining ethical standards in the rapidly evolving crypto industry.
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