Marathon Reveals $80M in Total Exposure to Bankrupt Crypto Mining Data Firm

Compute North, which filed for Chapter 11 in late September, has as much as $500 million in outstanding payments to at least 200 creditors

article-image

Bitcoin mining farm | Source: Shutterstock

share

key takeaways

  • Marathon Digital Holdings has more than $80 million exposed to recently bankrupt Compute North
  • Marathon previously installed 40,000 mining machines in Compute North’s wind-powered Texas mining site, one of four the firm has in the US

Marathon Digital Holdings has more than $80 million hanging in the balance of the recent bankruptcy of mining data firm Compute North, the bitcoin miner said Thursday.

Marathon has about $10 million invested in convertible preferred stock options, plus $21.3 million “related to an unsecured senior promissory note with Compute North,” the publicly traded company said in a statement

Marathon installed 40,000 mining rigs in Compute North’s wind-powered McCamey, Texas, mining site, one of the firm’s four US facilities, per Marathon’s second quarter earnings. Marathon had started to “expand its hosting arrangements with Compute North” during the second quarter of 2022, the company added. 

Compute North, which filed for Chapter 11 bankruptcy in late September, has as much as $500 million in outstanding payments to at least 200 creditors, according to court filings in the Southern District of Texas. The disclosure came around six months after the firm’s $85 million Series C venture round in February. Compute North additionally took on a $300 million debt financing round at the same time. 

Compute North cited decreasing bitcoin prices and supply issues as rationale for the bankruptcy, and its chief executive, Dave Perrill, stepped down at the time of the announcement. 

“Compute North has been a supportive partner, and we respect this voluntary step to stabilize their business,” Fred Thiel, Marathon’s chair and CEO, said in a statement. “Based on the information available today, we do not anticipate these proceedings impacting our current operations or our ability to achieve our primary target of 23 exahashes per second in 2023.”  

Marathon’s Compute North exposure is the latest challenge for the miner, which has been hit hard by the recent market pullback. The company posted a quarterly record $127 million impairment on its bitcoin holdings last quarter.  

“The second quarter was challenging for the industry and Marathon in particular,” Thiel said during the company’s earnings call in August. “Bitcoin mining is a nascent industry…and there is no playbook. However, given our progress, we’re confident that we remain on track to grow our position as a leader in this space.”

Things are looking up though, Thiel said. The company is slated to reveal its official third quarter financial results in November, with the CEO saying their numbers already look promising. 

“During the third quarter, we sequentially improved our bitcoin production as we successfully transitioned out of our facility in Montana and continued scaling operations at new locations, including the King Mountain wind farm in Texas,” he said. 

Through the first week of October, the company had added about 19,000 new mining rigs — good for two exahashes per second — since the end of the previous quarter.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Decentralized money was a “very unpopular goal” when concepts were proposed in the ’90s, said Nick Szabo

article-image

Cove aims to deliver “risk-adjusted yield” through curated DeFi vaults

article-image

The best capital markets are open to the most people — and crypto capital markets are open to everyone

article-image

Post-conference musings on Firedancer, Kraken, Solana Mobile and Trump

article-image

Executives expect others to follow SharpLink Gaming’s lead in purchasing an asset that has surged this past month

article-image

After a weekend of tariff policy shifts, investors appear confident that trade deals are underway