Yet another crypto-related firm is turning its back on Silvergate Bank.
Marathon Digital, one of the world’s largest Bitcoin (BTC) miners, has ended its partnership with Silvergate Bank.
It is worth noting that Marathon Digital is the second-largest Bitcoin holder listed publicly in the world. The first is a software analytics firm, MicroStrategy.
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The Bitcoin miner decided to part ways with Silvergate on the 8th of March 2023, following the news that Silvergate Bank’s parent company, Silvergate Capital Corporation, wants to shut down the bank’s operations.
The mining company announced the news in a blog post, claiming that it has terminated its credit facilities with Silvergate Bank after completing its full loan repayment.
When commenting on the news about its loan repayment completion, Marathon's CFO, Hugh Gallagher, said:
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.
The paydown of its debts also increased the company’s Bitcoin holdings. It retrieved 3,132 Bitcoins, worth around $68 million it kept with a third-party custodian as collateral.
When discussing the decision to part ways with Silvergate Bank, Charlie Schumacher, the company’s corporate communications vice president, said, “ending our financial relationship with Silvergate is a major aspect of our financial plan.”
In October 2021, Marathon took a revolving credit facility from Silvergate Bank worth $100 million to buy mining equipment and finance its operations. Marathon took another full loan in December 2022 worth $30 million from Silvergate.
Since the beginning of the year, Marathon has been working hard to clear its debts and retrieve its restricted Bitcoin held up as collateral.
In January, Marathon announced a full payment of $30 million in revolver loans after selling off 1,500 Bitcoin. After repayment, Marathon retrieved its restricted 3,615 Bitcoin used as collateral for the loan. Then in February 2023, the company sold off another 650 Bitcoin to fund corporate expenses and other operations.
