Bitcoin mining firm Marathon Digital has paid off its term loan and terminated its credit facilities with crypto-friendly Silvergate Bank, just as the bank announced it will be winding down operations.
Marathon announced on Mar. 8 that it had prepaid its outstanding loan balance earlier that day, and would be terminating the revolving line of credit facility between the firms after providing Silvergate Bank with the required 30-day notice in early February.
Marathon Digital Holdings has repaid its term loan and terminated its credit facilities with Silvergate Bank, reducing Marathon’s debt by $50 million and increasing the Company’s unrestricted bitcoin holdings by 3,132 BTC. Read our full update here: https://t.co/tihTTagfhR
— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) March 8, 2023
The announcement from Marathon came less than an hour after Silvergate Bank’s holding company — Silvergate Capital Corporation — announced it would be voluntarily liquidating the bank and winding down operations “in light of recent industry and regulatory developments.”
Cointelegraph reached out to Marathon Digital to understand whether the timing of the announcement had anything to do with the bank’s most recent development, but did not receive a response by the time of publication.
In the announcement, Marathon said the move will free up the 3,132 Bitcoin (BTC) — worth over $68 million at the time of writing — held as collateral for the loan. This would eliminate $50 million worth of debt and reduce its annual borrowing costs by $5 million, it said.
Marathon’s chief financial officer Hugh Gallagher noted that the crypto “industry has significantly changed” since the firm had opened the lending facilities with Silvergate Bank last summer, adding:
“We have been actively 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.”
According to a prior filing, Marathon secured the $100 million revolving credit facility with Silvergate Bank in October, 2021 and intended to use it to purchase Bitcoin mining equipment and fund its mining operations.
Related: Impact of the Silvergate collapse on crypto — Watch The Market Report live
Last month, Marathon’s vice president of corporate communications Charlie Schumacher…
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