Marathon Digital, the preeminent Bitcoin mining entity by market value, has been levied a substantial $138 million penalty after a court found it culpable for violating a non-disclosure or non-circumvention agreement.

Michael Ho, co-founder of US Bitcoin Corp and chief strategy officer at Hut 8, secured a decisive jury verdict in his breach of contract litigation against Marathon Digital Holdings. A non-circumvention agreement is a legally binding covenant designed to shield parties from being circumvented in business transactions.

Read more: Diversified Revenue: Marathon Digital Ventures into Kaspa Mining

Marathon’s Agreement Breach with Michael Ho

According to a statement provided to Cointelegraph by Affeld England & Johnson, Ho’s legal representation, the dispute traces back to 2020. During this period, Ho devised an expansive growth strategy for Marathon, which encompassed the establishment of a major Bitcoin mining facility in North America.

The law firm asserts that Marathon breached their agreement with Ho by implementing his strategy without adequate remuneration for his proprietary insights, thereby infringing upon their non-circumvention pact.

David Affeld, a partner at Affeld England & Johnson who led the case, underscored that the verdict highlights the criticality of honoring contractual commitments and selecting trustworthy business partners. Affeld remarked:

“This ruling conveys a formidable message that ethical business practices are imperative, not optional.”

He further noted that the jury’s decision in favor of Ho for $138 million affirms the importance of upholding contractual obligations and maintaining professional integrity.

Affeld worked in conjunction with Gregg Zucker from Foundation Law Group, who initiated the original lawsuit.

Marathon Digital’s Market Position Unaffected

Despite the legal setback, Marathon Digital Holdings retains its status as the largest Bitcoin mining enterprise globally, based on market capitalization. With a valuation of $6.77 billion, it eclipses the second-largest mining firm, CleanSpark, by 48%. According to CompaniesMarketCap, CleanSpark’s market cap stands at $4.13 billion.

In June, Marathon Digital achieved a significant operational milestone, doubling its hashrate year-over-year to 26.3 exahashes per second. This growth is attributed to enhancements at its Ellendate facility, which became fully operational in July. Fred Thiel, CEO and chairman of Marathon Digital, reported that their mining pool captured 158 blocks during the month, reflecting a 10% increase from July 2023.