Marathon Digital CEO & Executives Get Sued by the Shareholders

Marathon Digital CEO and Executives get sued by the shareholders
  • Before the lawsuit, Marathon Digital had received multiple subpoenas and notices from the SEC.
  • Shareholders aim to appoint four new board members from their fraternity.

What is Marathon Digital?

Founded in 2010, and headquartered in Las Vegas, Nevada, Marathon Digital Holdings operates as a digital asset technology company engaged in cryptocurrency mining, specifically in Bitcoin mining. 

Not only this, the company is the biggest holder of Bitcoin among all the publicly traded companies in North America. Before becoming a Bitcoin mining company, Marathon Digital was known as Marathon Patent Group and operated as a patent holding company. The company focuses on the continuous development of the blockchain ecosystem and constant generation of assets. The company aims to convert the energy into economic value while maintaining the uniformity and security of the Bitcoin ledger. To achieve this, the company has pledged the use of technologically advanced and innovative techniques in converting energy into economic terms.

 Marathon Digital Sued by Shareholders

The Las Vegas-based Bitcoin mining firm has been sued by the company’s shareholders. The shareholders claim that the company’s CEO Fred Thiel among other C-suite and top executives has failed to comply with their fiduciary duties, and wasted corporate assets along with lining their pockets.

The lawsuit was filed on July 8, 2023, in the United States District Court for the District of Nevada. The ten executives, including the CEO, are being sued for five claims including the violations of the United States Securities Exchange Act, wastage of corporate assets, personal gain, and breach of fiduciary duties.

Due to the wrongful acts of Fred Thiel, Merrick Okamoto, Simeon Salzman, and Hugh Gallagher that led to the SEC’s complaint against the company, the plaintiffs are demanding compensation in that regard. However, the team representing the shareholders did not put forward any specific number, leaving it in the hands of the court to decide. In addition to this, the shareholders have also proposed to abolish the older system of directors’ selection. The shareholders also want to restructure the company’s governance in order to strengthen the board’s supervision of operations, in view of this they want to nominate four members from the shareholder’s fraternity to take positions as the directors.

The legal team claims that the company had been deemphasizing its problems, falsely inflating its valuation, making unjust profitable insider deals, and executives received ascending compensations along with inexcusable bonuses by falsifying and misleading financial statements.

Company’s Legal Interactions Before the Lawsuit

In May 2023, Marathon Digital was subpoenaed by the SEC in connection with transactions involving related parties during the construction of their Montana facility. In 2021, the SEC ordered Marathon Digital to release all communications related to the Montana facility’s construction. CEO Fred Thiel expressed confidence in the company’s strategy to reduce net losses from $12.9 million in Q1 2022 to $7.2 million in 2023. The company’s quarterly results were affected by Bitcoin’s price, but it managed to lower its debt in March. Marathon Digital also repaid a term loan to Silvergate Bank, freeing up 3132 Bitcoins that were held as collateral and reducing the company’s debt by $50 million, ultimately cutting borrowing costs by $5 million.


Marathon Digital Holdings, a prominent Bitcoin mining company, is facing legal challenges as its shareholders file a lawsuit against its CEO and executives for alleged breach of fiduciary duties and mismanagement of corporate assets. The shareholders also seek to appoint new board members to strengthen governance and address concerns regarding the company’s operations and financial disclosures.



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