Bitcoin mining firm Marathon Digital plans to reissue several financial statements after the U.S. Securities and Exchange Commission called attention to a number of accounting errors the company had made. According to a recent SEC filing, Marathon Digital will be restating its unaudited reports for Q1, Q2, and Q3. These will include both 2021 and 2022, as well as its audited yearly 2021 report.
Marathon Digital reported that the financial statements, earnings releases, and various other types of financial communications in question for these time periods “should not be relied upon.” The problems pointed out by the SEC were related to the method used by Marathon to calculate impairment on cryptocurrencies.
The SEC also took issue with Marathon determining that it had been acting as an agent while running a mining pool as opposed to a principal. In this instance, a principal is defined as an entity that possesses the legal right to make decisions. An agent, on the other hand, would be an entity that is only able to act on the behalf of a principal.
Marathon Digital said that by converting the determination of its primary role in operating the mining pool from agent to principal, both revenue and the cost of revenue increase slightly, but the firm is not expecting the change to have any real impact on its bottom line:
“The restatement of the Impacted Financial Statements is not expected to have any impact on total margin, operating income, or net income in 2021 or in any of the interim periods in 2021 or 2022.”
Due to said accounting issues, Marathon Digital delayed its earnings call for Q4 of 2022. That call was scheduled to happen on February 28th. The company also plans to postpone publishing its related financial data. Marathon plans to file the final results for 2022 no later than March 16th and has informed the SEC that it could take as long as 15 days to correct the report, which was originally due to be submitted by March 1st.
The firm announced last month that it had sold off 1,500 BTC during the month of January. The last time the company sold any of its Bitcoin was in October 2020. Marathon has stated in the past that it intends to build a “war chest” consisting of cash and Bitcoin that will help them to remain financially flexible throughout the rest of the year.
Although 2022 was a difficult year for miners, an increase in the price of Bitcoin and improving energy prices have aided the industry in rebounding strongly in 2023. Across the board, miners are reporting increases in both production and hash rates.