Las Vegas-based block reward mining company Marathon Digital Holdings (NASDAQ: MARA) has reached a settlement agreement with its former chief executive officer, Merrick Okamoto.
In a filing with the U.S. Securities and Exchange Commission, the company revealed it has agreed to pay $24 million to the former CEO, who has agreed to a broad release of known and unknown claims against it. The claims relate to its 2018 Equity Incentive Plan and restricted stock unit reward agreements.
Okamoto left his role as CEO in early 2021 and was replaced by Fred Thiel. In a statement, he said that he believed it was “an appropriate time to adjust the responsibilities of our management team to be more in line with a company of our size.”
He joined the board as the executive chairman, a position he held until December, and was again replaced by Thiel.
Okamoto was instrumental in the growth of Marathon. He took over in 2017 when the company was a small player in the digital asset world, with most of its focus on patents. He grew the company from $10 million in market cap to over $4 billion with aggressive expansion into BTC block reward mining.
Despite its success in previous years, Marathon—like many other BTC miners—has had a rocky 2022. The bear market has weighed heavily on the miners who rely almost exclusively on block rewards to generate revenue.
For Marathon, this year’s turbulence has been compounded by its partnership with Compute North, the data center operator that served most BTC miners. As CoinGeek reported, Compute North filed for Chapter 11 bankruptcy last month, blaming the market downturn, which rendered it unable to service its loans.
Marathon revealed earlier this month that it had over $80 million tied up in Compute North. This included $10 million in convertible preferred stock, $21 million in unsecured senior promissory notes, and over $50 million as deposits for hosting services.
Marathon shrugged off the impact that Compute North’s bankruptcy filing had on its business, claiming that “our asset light model provides us with the optionality to relocate our miners to other locations, should the need arise.”
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