Montana Blasts SEC ‘Regulatory Power Grab’ in Kraken’s Case: ‘Crypto Assets Are Not Automatically Securities’

March 4, 2024 Bitcoin.com

Bitcoin miner Marathon Digital hit with another SEC subpoena

May 11, 2023 Coin Telegraph

abu dhabi

The first subpoena was given to Marathon in the third quarter of 2021, concerning whether it may have violated federal securities laws relating to its data center in Hardin.

Bitcoin (BTC) miner Marathon Digital has disclosed that it received another subpoena from the United States Securities and Exchange Commission relating to its 100-megawatt data center in Hardin, Montana.

According to Marathon’s quarterly report filed May 10, it received the subpoena on April 10 “relating to, among other things, transactions with related parties” that occurred while it was creating the facility in Montana, adding:

“We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC.”

The subpoena is the second one received by Marathon regarding the facility. It also received one late in the third quarter of 2021 in which the SEC ordered the firm to produce a number of related documents and communications.

@SECGov has issued another subpoena to Marathon Digital.

Marathon Digital is a US based #Bitcoin mining firm.

The subpoena relates to ongoing investigation tied to Marathon Digital facility in Montana.

Marathon stated that #SEC may be investigating whether or not there have…
— CryptoSmind (@SmindCrypto) May 11, 2023

A Marathon spokesperson declined to provide any additional comments.

On May 9, Marathon announced that it had partnered with digital assets infrastructure company Zero Two to create a large-scale immersion Bitcoin mining facility in Abu Dhabi.

The facility would consist of two mining mines with a combined 250-megawatt capacity, and Marathon noted that while mining in Abu Dhabi would normally be infeasible, its “custom-built immersion solution” would be sufficient to ensure the mining rigs remained cool.

The announcement came just two months after the Biden administration proposed a new tax for crypto miners operating in the U.S., which would require them to pay a tax equal to 30% of the cost of any electricity used while mining for crypto.

Magazine: $3.4B of Bitcoin in a popcorn tin — The Silk Road hacker’s story

Montana governor signs pro-cryptocurrency mining bill into law

May 4, 2023 Coin Telegraph

Bitcoin mining

The legislation includes revisions to laws aimed at prohibiting discriminatory electrical rates for mining firms and not allowing taxation for crypto used as a method of payment.

Greg Gianforte, the governor of Montana, has signed into law a bill largely preventing local governments in the state from passing laws prohibiting cryptocurrency mining.

According to records with the Montana legislature, Gianforte signed S.B. 178 into law on May 2 after the bill had passed both the state House and Senate. The legislation effectively enshrines crypto miners’ rights in the state by revising existing laws, prohibiting discriminatory electrical rates for mining firms and not allowing taxation for crypto used as a method of payment.

The latest version of the bill suggested that the legislation was introduced partly as a preventive measure in response to certain proposals in other states — i.e. “digital asset mining has often faced difficulty with regulations at the state and local level." For example, in April, lawmakers in the Texas state Senate introduced a bill aimed at limiting incentives for crypto miners through participation in a program intended to compensate them for load reductions on the state’s power grid.

BREAKING: The State of Montana has officially signed the 'Right to Mine' #Bitcoin bill into law. pic.twitter.com/f3PD1WgTOW
— Satoshi Action Fund (@SatoshiActFund) May 4, 2023

Crypto advocacy group Satoshi Action Fund has supported pro-mining legislation in certain states. Lawmakers in the Arkansas state House and Senate passed a bill similar to Montana’s S.B. 178. Satoshi Action Fund CEO Dennis Porter reported Arkansas Governor Sarah Huckabee Sanders had already signed this bill into law, but the legislature’s website did not show such an action at the time of publication.

“At the state level, we can have a lot of progress, we can move things forward, and there isn’t a whole lot the federal government can do in the meantime,” said Porter.

Similar pro-mining legislation had been moving forward in the Mississippi state legislature, but the bill “died” in March. Porter said a Missouri bill was “a further little behind in the process” but still progressing in the legislature.

At the federal level, the Biden administration recently renewed a push for a 30% tax on cryptocurrency miners as part of an FY2024 budget proposal. The tax would potentially target miners’ electricity usage.

Magazine: Inside the Iranian Bitcoin mining industry

Multiple US state regulators allege AI trading DApp is a Ponzi scheme

April 5, 2023 Coin Telegraph

Alabama

The scheme allegedly claimed it could generate returns of up to 2.2% a day by leveraging AI to trade more often and with higher profits than a person could.

Securities regulators from Montana, Texas, and Alabama have jointly filed enforcement actions against cryptocurrency trading platform YieldTrust.ai, alleging it is “perpetrating a Ponzi scheme.”

According to April 4 statements from the Montanan, Texan and Alabamian regulators, YieldTrust.ai and its Romanian owner, Stefan Ciopraga, claimed the decentralized application (DApp) called “YieldBot” is “powered by cutting-edge artificial intelligence” and is “capable of executing 70 times more trades with 25 times higher profits than any human trader could.”

The regulators alleged YieldTrust didn’t provide “any proof” to investors that the artificial intelligence (AI)-powered bot exists, “let alone that it is performing at the level YieldTrust.ai claims.”

Montana’s regulator stated in its cease and desist order that YieldBot was developed for Binance’s BNB Smart Chain and could interface with staking programs to generate returns for new investors of up to 2.2% per day through:

“[Analyzing] the crypto markets and – in milliseconds – make its own trading decisions, autonomously choosing from hundreds of trading methods and chaining them together to create unique strategies – achieving an exhilarating performance.”

However, the state regulators claimed an independent firm that conducted an audit of YieldBot’s smart contract found it was “dangerous,” as “the deploying team retained sufficient control to block users from withdrawing their assets.”

As noted by the regulator's statements and highlighted in an April 4 tweet from Montana’s securities commissioner, Troy Downing, scammers are apparently capitalizing on the hype surrounding AI “by developing high-tech ploys to deceive investors.”

Artificial intelligence may be an exciting concept, but scammers are attempting to capitalize on the excitement by developing high-tech ploys to deceive investors.#AI #SecuritiesFraud #InvestmentScam #MTNews https://t.co/FMSqLJW40E
— Commissioner Troy Downing (@DowningCSIMT) April 4, 2023

An order from Montana’s regulator demands YieldTrust.ai cease and desist all activity in the state and seeks a total of $100,000 in fines while the Texas State Securities Board issued multiple cease and desist orders.

After the audit of its smart contract was published, YieldTrust.ai allegedly announced it would cease operations, which appears to be verified by the lack of trading activity according to DappRadar data.

*Activity on YieldTrust.ai’s dApp from Feb. 1 to April 5. Source:* *DappRadar*

However, the regulator’s orders accuse YieldTrust.ai of “raising capital from the public to cover withdrawals from prior investors,” which, alongside the promise of high returns, are the characteristics of a Ponzi scheme.

YieldTrust.ai’s website has been taken offline and its Twitter account deleted. Cointelegraph was unable to contact YieldTrust.ai or Ciopraga for comment.

AI has become far more prominent, accessible and surrounded by hype since the release of the ChatGPT AI chatbot on Nov. 30 by AI research company OpenAI.

Despite its inaccuracy at times, ChatGPT has proved to be a powerful tool, with the latest version capable of passing the bar, acing SATs and even identifying exploits in smart contracts.

Hodler’s Digest: FTX EU opens withdrawal, Elon Musk calls for AI halt, and Binance news

Montana’s ‘right to mine’ crypto bill moves closer to passing as law

February 24, 2023 Coin Telegraph

bill

The bill seeks to enshrine crypto miners’ rights and will still have to pass muster in the states House before its signed into law by the governor.

A cryptocurrency mining rights bill with laws that would prohibit the discrimination of crypto miners is one step closer to fruition after passing the Montana Senate.

The proposed laws would enshrine a “right to mine digital assets” and would prohibit “discriminatory” electricity rates being charged to crypto miners, protect mining that occurs “at home” and strip local governments of the power to use zoning laws to stop crypto mining operations.

It also prohibits additional taxes on the use of crypto as a payment method and would consider “digital assets,” including cryptocurrencies and nonfungible tokens, as “personal property” alongside other financial products such as stocks and bonds.

The bill was passed in the state Senate on Feb. 23 with a vote of 37 for and 13 against and will head to the House for approval. If it is passed there as well, the final step would be for it to be signed into law by Governor Greg Gianforte, who could also choose to veto the bill.

*Text from the bill outlining its provisions and some of the reasoning for the laws. Source:* *Montana State Legislature*

The bill outlined that Montana wants to “protect the right to mine” crypto and “create legal certainty” for miners as mining “provides positive economic value” and could potentially “stabilize the grid and provide revenue for infrastructure upgrades.”

The bill was written with the help of the Satoshi Action Fund, a pro-Bitcoin (BTC) lobbying group.

Dennis Porter, CEO of the advocacy body, told Cointelegraph in a January interview that leaders in Montana have used zoning laws to attempt to push miners out and have considered imposing higher electricity rates on miner operations.

In April 2019, Missoula County in Montana passed rules that required miners to operate only in light and heavy industrial districts and required miners to exclusively use renewable energy. If passed, the law would overturn the county’s zoning ordinance.

In early February, the Mississippi state Senate passed a similar bill seeking to protect crypto miners from discrimination and is working its way to the states House.

Meanwhile, Missouri’s Digital Asset Mining Protection Act, which aims to protect the rights of crypto miners, was introduced to the state legislature in mid-January.

Marathon’s first Bitcoin sale in 2 years not the result of distress

February 3, 2023 Coin Telegraph

BTC

A company spokesman says the second-biggest publicly listed holder of BTC wants to have a “war chest” of liquidity composed of both cash and Bitcoin.

The second largest publicly-listed holder of Bitcoin, crypto mining firm Marathon Digital Holdings has offloaded some of its Bitcoin (BTC) for the first time in two years.

A spokesman told Cointelegraph this was not a result of financial distress.

According to an update posted on Feb. 2, the company disclosed that during January it sold 1,500 BTC, worth $35.3 million at current prices.

While some crypto miners have been forced to sell Bitcoin due to distress, Marathon vice president of corporate communications Charlie Schumacher said this was not the case for Marathon.

*Marathon Digital's Bitcoin Mining Data Center in Hardin, Montana. Source: Marathon Digital*

Schumacher said that Marathon had been diamond-handing its Bitcoin until now, as the firm didn’t want to sell while production was down, and has been bullish on the long-term prospects of the leading cryptocurrency.

But coming into the new year, Marathon wants to have a “war-chest” of liquidity composed of both cash and Bitcoin and is looking to continue paying down debt and increase its cash positions.

Schumacher also noted that Bitcoin’s recent uptick in price contributed to the decision to sell some of its holdings.

January saw Bitcoin rise above the $24,000 price level for the first time since August.

Even after the sale, Marathon managed to increase its unrestricted Bitcoin holdings in the month to 8,090 BTC ($189.8 million).

*Operational highlights from Marathon’s latest update. Source: Marathon Digital Holdings*

Marathon said it also had significantly ramped up Bitcoin production throughout January, producing 687 BTC, which represents an increase of 45% compared to the month prior. In the update, Marathon chairman and CEO Fred Thiel noted:

“The improvement in our bitcoin production was primarily a result of our team’s ability to work in tandem with the new hosting provider in McCamey, Texas, to address the maintenance and technical issues at the King Mountain data center that had suppressed our bitcoin production in the fourth quarter of 2022."

Last year, Marathon noted in a May 4 update that the last time it had sold any Bitcoin was on Oct. 21, 2020, and has been hodling since then.

When asked how it had managed to avoid selling the main product of its business operations, Schumacher pointed to the firm’s low headcount, consisting of “32 people as of today,” and suggested it was a result of sound long-term financial strategies.

Marathon is the second-biggest publicly listed holder of Bitcoin according to CoinGecko, beaten only by software analytics company MicroStrategy. It has recorded a significant boost in its share price in recent days, with MARA stock rising 135% so far this year to $8, according to MarketWatch.

Marathon Digital moves Montana BTC mine to pursue carbon neutrality

April 6, 2022 Coin Telegraph

Coin Telegraph

The Bitcoin miner’s push to make its facilities run on clean energy reflects a push in the industry for all mining operations to do the same, or to at least use flexible facilities.

Bitcoin miner Marathon Digital Holdings plans on taking a big step toward carbon neutrality with plans to transition its Montana mining facility to use sustainable power sources elsewhere.

The Nevada-based company intends on relocating its coal-powered Hardin, Montana facility to a location that uses sustainable, non-carbon emitting energy sources. The move is aimed at helping the company reach its goal of full carbon neutrality by the end of 2022.

Marathon CEO Fred Thiel stated in an announcement from the company that he is taking efforts to “ensure our miners are as sustainably powered as possible.”

“With the majority of our fleet already scheduled to be deployed at renewable power facilities and deployments currently underway, we believe it is an appropriate time to transition our legacy operations away from fossil fuel generation and towards more sustainable sources of power.”

Marathon’s push for clean energy sources at its facilities reflects a shift in the Bitcoin mining industry towards environmental awareness sparked by lawmakers in jurisdictions not just across the U.S., but around the world.

Greenpeace has launched a campaign to “change the code, not the climate,” which is intended to pressure Bitcoin to transition to more power efficient technology. Meanwhile, the Intergovernmental Panel on Climate Change (IPCC) this week called crypto a “major global source” of carbon dioxide emissions in its latest report.

Miners are now quick to highlight their environmentally friendly practices. Gryphon Digital Mining and Sphere 3D cancelled a business merger on April 4 and the firms made sure to each point out in a joint announcement that they will continue to build carbon-neutral mining facilities. Gryphon achieves carbon-neutrality by acquiring carbon offsets, but Sphere 3D has not responded to a request to explain how it is a carbon neutral operation.

Marathon holds the third most Bitcoin (BTC) of any publicly traded company behind Elon Musk’s Tesla and Michael Saylor’s MicroStrategy. The gap between it and MicroStrategy widened yesterday when Saylor revealed that his firm bought an additional 4,167 BTC worth about $190.5 million at the time of purchase.

Despite its strong position in the industry, Thiel told Bloomberg in an April 4 article that he would be open to selling his company if the right offer came along. He said, “If somebody offers us a huge premium over our market cap, I have to take it under consideration and that may be the right thing to do for the investors.”

Thiel believes energy producers might be most interested in acquiring Bitcoin mining operations because they would not have to worry about acquiring the contracts needed to power their facilities.

A March 2021 study which found that energy flexibility at mining facilities can be good for the environment and public energy grids.

A flexible facility is one that can generate its own energy from renewable resources when the energy grid is too stressed to handle the load of Bitcoin miners. Energy companies that acquire Bitcoin miners can utilize excess or wasted energy to power the mining devices to efficiently increase cash flow.

Trends Study Says Dogecoin Is the Most Googled Cryptocurrency in the US

April 5, 2022 Bitcoin.com

montana