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Las Vegas-based Marathon Digital Holdings Inc. (NASDAQ: MARA) is launching a North American BTC mining pool that is “fully compliant with U.S. regulations.”
In a statement, the block reward miner said it adheres to the U.S. anti-money laundering (AML) and the Office of Foreign Asset Control’s (OFAC’s) standards. Marathon promises to ensure the transactions processed by its pool satisfy regulatory requirements by using “Blockseer pool technology” exclusively licensed by DMG Blockchain, enabling transfers to be filtered.
The company will start redirecting 100% of its current hash power to the new pool beginning May 1. By Q1 2022, Marathon forecasts to have deployed all 103,120 miners contributing 10.37 exahashes per second, or EH/s, to the new mining pool. Marathon’s new pool also aims to accept hash power pooled from other U.S.-based block reward mining companies by June 1.
Marathon will not process transactions from those individuals listed on the U.S. Department of Treasury’s Specially Designated Nationals and Blocked Persons List (SDN) to meet their regulatory compliance claims. The statement does not specify how DMG’s technology identifies whether individuals blacklisted by the Treasury Department have transmitted transactions.
Marathon Chairman & CEO Merrick Okamoto said that despite the recent rise in institutional interest surrounding digital currencies, a lack of regulatory assurances dissuaded many firms from entering the block reward mining sector:
“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,” Okamoto said.
Marathon’s goal as a NASDAQ-listed company is to enable higher institutional adoption of digital currencies by following U.S. regulation, Okamoto said, noting that at present, over two-thirds of the BTC global hashrate is concentrated in Chinese pools that offer little transparency or protection against interference from central authorities who could obstruct mining operations without due process.
As part of the agreement, DMG will receive US$500,000 in common shares of Marathon plus a monthly fee paid in either cash or BTC. DMG Blockchain’s co-founder Dan Reitzik said, “Merrick Okamoto’s vision for this mining pool is exactly what is needed in the crypto mining industry today. We are excited to provide Marathon with our proprietary software tools and ongoing technological support to help realize this vision.”
This feel-good industry story masks the elemental truth that we intertwine genuine compliance with accuracy and truthfulness in advertising. Here, there is a fair amount of false promotion taking place.
First, it is misleading for Marathon to call themselves a “fully compliant Bitcoin mining pool” when they do not support the actual Bitcoin blockchain which is Bitcoin SV. Second, genuine blockchain infrastructure companies aim to process transactions and not simply mine blocks for the diminishing block reward subsidy.
These “compliance” pretenses ring hollow when weighed against these all-encompassing criteria and the simple fact the BTC industry functions in a manner not supported by Bitcoin’s standards. Some industry experts might even go as far to label it as fake news.
See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.
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