This was the story that really started DMG’s run up last time.
DMG Blockchain Solutions and Marathon Digital Holdings enter into Definitive Software and Technology Agreement for the DCMNA Pool
March 31, 2021 09:04 ET | Source: DMG Blockchain Solutions Inc.
VANCOUVER, British Columbia, March 31, 2021 (GLOBE NEWSWIRE) -- After the execution of a memorandum of understanding in early January 2021, Marathon Digital Holdings Inc. (Nasdaq: MARA), (“Marathon”) and DMG Blockchain Solutions Inc. (TSX-V: DMGI) (OTCQB-US: DMGGF) (FRANKFURT: 6AX) (“DMG”), a vertically integrated blockchain and cryptocurrency technology company, have entered into a definitive license agreement (the “Agreement”) to provide technology solutions for Marathon and the new Digital Currency Miners of North America (“DCMNA”) pool. Marathon is one of the largest enterprise Bitcoin self-mining companies in North America and will be launching the first North America-based Bitcoin mining pool that is fully compliant with U.S. regulations, including anti-money laundering (AML) and the Office of Foreign Asset Control’s (OFAC’s) standards. Unique features of DMG’s Blockseer pool technology include the ability to filter transactions to ensure AML and OFAC compliance in anticipation of impending US regulations. On a day-to-day basis, DCMNA will manage the pool with DMG providing strategic guidance and/or technical support as needed.
Marathon intends to direct 100% of its hashrate to the new mining pool. Marathon expects all 103,120 of its miners to be deployed by the first quarter of 2022, at which point, the Company will be directing 10.37 EH/s to the mining pool. In June 2021, the pool will begin accepting other U.S.-based Bitcoin mining companies.
Terms of Agreement with Marathon
As part of the Agreement, Marathon will be licensing DMG's proprietary Blockseer pool technology to be used by the DCMNA entity. Pursuant to the terms and conditions of the Agreement, DMG will receive:
(a) USD$500,000 in common shares of Marathon;
(b) a monthly license fee paid in cash or Bitcoin (at DMG’s election) with a sliding scale based on DCMNA’s block rewards and transaction fees received by the pool; and
(c) technical support services to be provided on an as-needed basis with payment in US dollars.
"We are excited to provide our proprietary software tools to the DCMNA pool.. As more U.S.-based Bitcoin mining companies (and their hashrate) join DCMNA, DMG will receive more Bitcoin from licensing our technology," said DMG’s CEO & COO, Sheldon Bennett.
“While institutional interest in Bitcoin is accelerating, many large funds and corporations have expressed concerns over purchasing Bitcoin that may have been tainted by nefarious actors,” said Merrick Okamoto, Marathon’s chairman and CEO. “Our pools’ initiatives are grounded on decentralization, transparency, legal compliance with U.S. rules and regulations, and independent auditability under U.S. auditing standards. While we appreciate some miners’ appetite for processing transactions indiscriminately, it is our belief that as a publicly listed company based in the United States, and as one focused on enabling more institutional adoption of Bitcoin, it is our responsibility to follow U.S. regulations. We believe that such regulatory compliant mining will allow us to produce ‘clean’ Bitcoin, which will enable a greater number of institutions to gain exposure to this new asset class, ultimately benefiting our organization, our shareholders, and the broader network.”
Okamoto continued, “Currently, more than two-thirds of Bitcoin’s global hashrate is concentrated in pools with little transparency, and most reside in one country. It is our belief that this concentration of hashrate outside of the United States, where central authorities could interfere with mining operations without due process, poses a risk to the network. We believe shifting more mining power to the U.S. could reduce these risks, potentially strengthening the network and benefitting all who participate in it. If all 10.37 EH/s of our potential hashrate were pointed towards this pool today, our mining pool would be the seventh largest bitcoin mining pool in the world, putting North America on the map as a digital-asset mining hub.”
Management/Director Updates
DMG also announces a change in senior management and the addition of a new director.
The Company reports that Daniel Reitzik has resigned from DMG as a director and as the Chief Executive Officer. Mr. Reitzik was one of the founders of DMG, and helped DMG grow from a small company in 2016 to a leading cryptocurrency and blockchain company. The Company thanks Mr. Reitzik for his contribution to DMG and wishes him all the best in his future endeavors.
Sheldon Bennett, also a founder, who leads the day-to-day operations of DMG, has been appointed CEO and will also continue in his position of Chief Operating Officer for the time being. With the appointment to CEO, Mr. Bennett will continue building on his role of developing new business opportunities, partnerships, and continuing to execute on bringing DMG’s products to market.
The Company is also pleased to announce that Steven Eliscu has joined DMG’s board of directors. In adding Mr. Eliscu, DMG gains a board member who will help oversee the Company’s continued transformation, while guiding it to focus on key long-term drivers of valuation. Mr. Eliscu currently works as Head of Finance for DSP Concepts, and he is an experienced Blockchain and technology industry veteran, with experience at Bitfury as well as having advised a number of Blockchain start-ups. Mr. Eliscu is also a former equity research analyst for UBS, having provided investment coverage of the semiconductor industry to institutional investors. Mr. Eliscu has a Bachelor of Science in Computer Engineering from Rensselaer Polytechnic Institute and an MBA from the University of Chicago Booth School of Business. Mr. Eliscu’s experience makes him ideal to chair the Board’s Audit Committee.
The Company also announces that it has granted 200,000 stock options with an exercise price of $2.49 to Mr. Eliscu for a three-year term.
Terra Clean Energy Pool
As previously disclosed on March 26, 2021, DMG and Argo Blockchain Plc will provide further updates on the Terra Pool as developments and progress occurs.
About Marathon Digital Holdings Inc.
