Marathon Digital, the industry-leading Bitcoin mining firm, was fined $138 million for breaking a non-circumvention agreement with ex-executive Michael Ho. Ho also co-founded US Bitcoin Corp and serves as the chief strategic officer for Hut 8, another well-known Bitcoin mining company.
A press release on the matter stated, “A federal court jury unanimously ruled in favor of Michael Ho against Marathon Digital Holdings, Inc. for $138 million after finding that Marathon breached a Non-Disclosure/Non-Circumvention Agreement.” Such an agreement protects parties involved in a business deal if one cuts out the other unfairly and continues to profit from their contributions.
Marathon Digital used proprietary information provided by Ho regarding a large-scale energy supplier. According to the release, Marathon Digital agreed not to undercut Ho while securing power needed for its mining activities from the supplier but did so anyway.
“Marathon promised not to circumvent Michael Ho by doing business with that supplier without compensating Michael Ho for this valuable information. In breach of its agreement, Marathon cut Michael Ho out and dealt directly with the energy supplier.”
With Ho’s expertise in the Bitcoin mining sector, Marathon Digital utilized his network to expand its mining capacity before distancing from the business transaction, providing grounds for a civil suit. The suit was brought by Ho with the assistance of legal representation from David W. Affeld and Edward E. Johnson of Affeld England & Johnson LLP.
Affeld said about Marathon Digital’s violation, “The unanimous jury verdict for $138 million vindicates Michael Ho’s efforts and expertise, and it reinforces the importance of honoring contractual obligations and respecting professional relationships.”
Regardless, Marathon Digital remains the biggest Bitcoin miner across the globe. For perspective, it is 48% bigger than the runner-up, CleanSpark. The firm has managed to increase revenues despite the Bitcoin halving, mining 158 blocks in July 2024, a 10% increase from the same month last year. It has strategically increased its mining capabilities over the years to rise to the top of the mining sector.
