Marathon Digital has been penalized $138M for violating a non-disclosure, non-circumvention agreement with former executive Michael Ho.
The largest Bitcoin mining company by market capitalization, Marathon Digital, has reportedly been fined $138 million for violating a non-disclosure or non-circumvention agreement.
Michael Ho, the former co-founder of US Bitcoin Corp and the chief strategy officer of mining company Hut 8, was awarded a unanimous jury verdict in his breach of contract lawsuit against Marathon Digital Holdings.
A non-circumvention agreement is a legally enforceable agreement that safeguards firms or individuals from being circumvented by other parties involved in a transaction.
Marathon violates its agreement with Michael Ho.
Affeld England & Johnson LLP, which represented Ho, disclosed in a press release sent to Cointelegraph that the executive devised a growth strategy for Marathon in 2020, including establishing a large-scale Bitcoin mining facility in North America.
According to the law firm, Marathon violated its non-circumvention agreement with Ho by executing his strategy without compensating him for the proprietary information he provided.
The verdict underscores the significance of honoring commitments and selecting the appropriate business associates, according to David Affeld, one of the partners at Affeld England & Johnson LLP who presented the case. Affeld added the following:
“It sends a powerful message that ethical business practices are not optional, they are essential.”
Affeld also stated that the unanimous jury verdict for $138 million validates Ho’s expertise and efforts. Affeld said, “It underscores the significance of adhering to contractual obligations and maintaining professional relationships.”
Affeld worked with Gregg Zucker of Foundation Law Group LLP, who initiated the initial lawsuit.
Marathon Digital did not respond to Cointelegraph’s request for comment.
Marathon Digital remains the world’s largest mining firm
Despite the lawsuit, Marathon Digital Holdings remains the world’s largest Bitcoin mining firm in market capitalization. The company is valued at $6.77 billion, surpassing the second-largest mining firm, CleanSpark, by 48%. CleanSpark’s market capitalization is $4.13 billion, as CompaniesMarketCap data indicates.
Marathon Digital increased its operational hashrate to 26.3 exahashes (EH/s) in June, representing a twofold increase from the previous year. Improving its Ellendate facility, which was fully operational in July, was the reason for the rise.
Marathon Digital’s CEO and chairman, Fred Thiel, reported that their mining pool captured 158 blocks in the month, representing a 10% increase from the previous year.
