Marathon Digital To Restate Financials After Accounting Issues

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Bitcoin miner Marathon Digital has announced that it will reissue several financial statements from its audited 2021 results and unaudited reports from 2022. 

The announcement comes after an inquiry conducted by the Securities and Exchange Commission (SEC) flagged several accounting errors committed by the firm. 

Inquiry Reveals Inconsistencies 

Bitcoin miner Marathon Digital will be reissuing a significant number of financial statements after an inquiry from the Securities and Exchange Commission (SEC) revealed several accounting errors made by the firm. According to the 27th of February filing by the SEC, Marathon Digital will be reissuing its unaudited quarterly reports from Q1, Q1, and Q3 reports from 2021 and 2022. Additionally, Marathon will also be reissuing its audited annual report from 2021. The company also added that the affected financial statements, related earnings releases, and other financial communications issued during the period in question should not be relied upon. 

SEC Flags Problems 

The Securities and Exchange Commission highlighted the issues in question on the 22nd of February. These issues revolved around Marathon Digital’s method for calculating the impairment on digital assets and the company’s determination that it was acting as an agent while operating a Bitcoin mining pool rather than a principal. A principal refers to an entity that has the legal authority to make decisions. On the other hand, an agent refers to an entity acting on the principal’s behalf. 

Marathon Digital stated that any changes in the determination of its role in the operations of the pool from an agent to a principal would impact revenues and cost of revenues. According to the company, while both would see a marginal increase, it believes that its bottom line would not be impacted. Marathon stated, 

“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.”

Earnings Call Postponed 

As a result of the accounting issues thrown up by the Securities and Exchange Commission inquiry, Marathon Digital has also announced that it will be postponing its fourth-quarter 2022 earnings call. The earnings call was scheduled to take place on the 28th of February, 2023. According to Marathon, this would also lead to the postponement of the publication of the company’s corresponding financial results. The company announced the cancellation of its conference and Webcast on Twitter, stating, 

“Today, we announced that we are canceling our webcast and conference call for Q4 & FY 2022, initially scheduled for today at 4:30 p.m. ET, and are postponing the publication of our corresponding financial results. For more, please see this press release.”

Marathon has stated to the SEC that it plans to file its financial results for 2022 by the 16th of March, 2022. The company added that it would take around a fortnight to implement the corrections to the report, initially due on the 1st of March. 

Read more:  The US-based Bittrex Exchange has Filed for Bankruptcy

Bitcoin Rebounding? 

Marathon Digital had announced that it had sold around 1500 BTC during January. This made it the first time the company sold any Bitcoin since October 2020, as it looked to assemble a war chest of Bitcoin and cash. 2022 was quite a difficult year for Bitcoin miners, with the year seeing the capitulation of Core Scientific. However, stability in Bitcoin’s price and consistency in electricity prices have seen the industry rebound in 2023, with hash rates and production rates seeing an upswing.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: ryptodaily.co.uk

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