Bitcoin Miner Marathon Expects to Recover Less Than Half Its Deposit From Bankrupt Compute North

Marathon Digital (MARA), one of the largest publicly traded bitcoin miners, expects to recover only $22 million of the $50 million it deposited with bankrupt bitcoin miner and data center provider Compute North.

Marathon – which doesn’t own its mining facilities and uses third-party data centers to park its computers – previously said that it paid about $50 million in operating deposits to Compute North. In its update on Tuesday, the company said it has now written off $8 million of that total, and expects to recover about $22 million of the $42 million still remaining.

That would leave $20 million of the deposit still unaccounted for, and Marathon said it continues “to work with the various parties involved to determine [its] ultimate recoverability.”

In addition to that $50 million deposit, Marathon previously said that it invested $10 million in convertible preferred stock and $21.3 million in an unsecured senior promissory note in different entities within Compute North.

Read more: Troubled Data Center Compute North Struggled With Crypto Winter. Then Its Relationship With a Major Lender Soured

Compute North filed for bankruptcy protection last month, citing the severe bear market, supply issues and trouble with its largest lender. Marathon is one of Compute North’s largest customers, placing its heavy-duty bitcoin mining rigs in Compute North’s data centers for a fee.

In other updates, Marathon said it reduced its revolver borrowings to $30 million from $50 million and – after mining 472 bitcoin in November – has 4,200 unrestricted bitcoin and 11,757 total bitcoin as of Nov. 30. That 472 bitcoin mined last month was down 23% from October thanks to higher energy costs and lower bitcoin prices that affected its King Mountain site in Texas.

Marathon shares were unchanged in post-market trading on Tuesday but were lower by 5.7% in the regular session, and now off 82% this year, roughly in line with mining peers.

Read more: Crypto Miner Marathon Digital Mines Record 615 Bitcoin in October