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

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.png

Research

The convergence of DePIN and energy generation aims to address modern grid challenges by incentivizing distributed generation.

article-image

The deal is made up of $700 million in cash and 11 million shares of Coinbase’s Class A common stock

article-image

Blockworks Research uses numbers to help crypto advance to a higher stage of storytelling

article-image

While Arizona’s governor could veto another crypto reserve bill, similar North Carolina and Texas laws are approaching the finish line

article-image

However, they noted there’s now an increased risk that unemployment and inflation will rise in the coming months. 

article-image

The network’s most ambitious upgrade since the Merge brings validator streamlining, smart account UX and doubled blobspace to Ethereum