SecProbe.io

CORRESP
1
filename1.htm

  November 20,
  2023

Division
of Corporate Finance

United
States Securities and Exchange Commission

Washington,
DC 20549

    Attn:
    Stephen
    Krikorian

    Melissa
    Walsh

    Re:
    Marathon
    Digital Holdings, Inc.

    Form
                                            10-K for the Fiscal Year Ended December 31, 2022

                                                                                Form
                                            10-Q for the Quarterly Period Ended June 30, 2023

                                                                                File
                                            No. 001-36555

Dear
Ms. Walsh and Mr. Krikorian:

This
letter constitutes the response (“Response”) of Marathon Digital Holdings, Inc. (the “Company”) to your comment
letter dated November 7, 2023 (the “Letter”) to the Chief Financial Officer of the Company, relating to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 10-K”) and the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2023 (the “2023 10-Q”). Unless otherwise indicated, capitalized
terms used herein have the meanings ascribed to them in the 2022 10-K and/or 2023 10-Q. For ease of reference, the Company has copied
each comment verbatim from your Letter and has placed our response immediately below each comment.

Form
10-K for the Fiscal Year Ended December 31, 2022

Notes
to Consolidated Financial Statements

Note
3 - Summary of Significant Accounting Policies

Revenues
from Contracts with Customers, page 69

1. We
                                            continue to evaluate your responses to prior comments regarding your revenue recognition
                                            policy and may have further comments.

Response:
The Company acknowledges that the Staff may have further comments.

Form
10-Q for the Quarterly Period Ended June 30, 2023

Notes
to Consolidated Financial Statements

Note
5 - Revenue From Contracts With Customers, page 16

2. Your
                                            accounting policy disclosure indicates, “Variable consideration is included in the
                                            transaction price only to the extent that it is probable that a significant reversal in the
                                            amount of cumulative revenue recognized will not occur…” Please revise to clarify
                                            that the constraint is based on cumulative revenue under the accounting contract, rather
                                            than implying it is based on cumulative revenue earned from a customer.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to the updated disclosure on page 12 of the
Company’s Form 10-Q for the period ended September 30, 2023, filed with the Commission on November 8, 2023:

Variable
consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of
cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration
is subsequently resolved.

3. In
                                            the last paragraph on page 17, you indicate that when you provide bitcoin transaction verification
                                            services as the operator and a participant in a private pool, it is included as “Operator”
                                            revenue. Please tell us why it is necessary to also refer to when you are a participant in
                                            a private pool considering that the mining pool is Company-operated and this intercompany
                                            activity would be eliminated.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to the updated disclosure on page 12 of the
Company’s Form 10-Q for the period ended September 30, 2023, filed November 8, 2023:

The
Company’s ongoing major or central operation is to provide bitcoin transaction verification services to the bitcoin network through
a Company-operated mining pool as the operator (“Operator”) (such activity, “mining”) and to provide computing
power to perform hash calculations to collectives of third-party bitcoin miners (such collectives, “mining pools”) as a participant
(“Participant”).

4. In
                                            the last paragraph on page 17, you state that you provide computing power to collectives
                                            of third-party bitcoin miners as a participant. Please clarify how you define computing power.
                                            In this regard, consider revising your accounting policy to define the performance obligation
                                            as a service to perform hash calculations for the pool operator. Please revise your disclosure
                                            to use consistent terms to describe this performance obligation.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to the updated disclosure on page 12 of the
Company’s Form 10-Q for the period ended September 30, 2023, filed November 8, 2023:

The
Company’s ongoing major or central operation is to provide bitcoin transaction verification services to the bitcoin network through
a Company-operated mining pool as the operator (“Operator”) (such activity, “mining”) and to provide computing
power to perform hash calculations to collectives of third-party bitcoin miners (such collectives, “mining pools”)
as a participant (“Participant”).

5. For
                                            Operator revenue, please revise to describe the components of the consideration received.
                                            That is, explain the nature of block rewards and transactions fees.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to the updated disclosure on page 13 of the
Company’s Form 10-Q for the period ended September 30, 2023, filed November 8, 2023:

The
Company is currently entitled to 6.25 bitcoin as block reward for each successful block. The Company is also entitled to a transaction
fee determined by market participants payable in bitcoin for each successful block.

6. For
                                            Participant contracts, please revise to provide a more complete description of the payout
                                            formulas by identifying the formula inputs that create variability for each type of compensation.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to the updated disclosure on page 14 of the
Company’s Form 10-Q for the period ended September 30, 2023, filed November 8, 2023:

When
the Company participates in PPS and FPPS pools, which pay rewards based on a contractual formula, the Company recognizes revenue based
on the daily contributed hash rate and other network-driven inputs, measured at the average daily spot rate of bitcoin determined
using the Company’s primary trading platform for bitcoin.

7. For
                                            Participant contracts, you indicate that a new contract is determined to exist each period
                                            that neither the Company, nor the pool operator, terminates the arrangement. Considering
                                            that the termination provisions are similar to a renewal option, revise to disclose, if true,
                                            that such renewal option is not a material right because either the pricing in the renewal
                                            periods is the exact same as the pricing in the initial contract and there are no upfront
                                            or incremental fees in the initial contract or the terms, conditions, and compensation amounts
                                            for the renewal options are at then market rates.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to the updated disclosure on page 14 of the
Company’s Form 10-Q for the period ended September 30, 2023, filed November 8, 2023:

A
new contract is determined to exist each period (i.e., second, minute, hour) that neither the Company, nor the pool operator, terminates
the arrangement. Such implied renewal option is not a material right because the pricing in the renewal periods is the same as the
initial contract and there are no upfront or incremental fees in the initial contract or the terms, conditions, and compensation amounts
for the renewal options are at the then market rates.

Part
II – Other Information

Legal
Proceedings

Ho
v. Marathon, page 47

8. In
                                            response to prior comment 7, you refer to the heading for the notes to condensed consolidated
                                            financial statements indicating that dollars in the document are in thousands. We note no
                                            such reference regarding the dollar amounts in Part II of your filing. Please revise to ensure
                                            you disclose the short citation is applicable throughout your filing.

Response:
The Company acknowledges the Staff’s comment and respectfully directs the Staff to page 40 of the Company’s Form 10-Q
for the period ended September 30, 2023, filed November 8, 2023:

PART
II - OTHER INFORMATION (All dollar amounts expressed in PART II Items 1-4 are expressed in thousands unless otherwise indicated.)

In
connection with responding to the Staff’s comments, the Company acknowledges that (i) it is responsible for the adequacy and accuracy
of the disclosure in its filing; (ii) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission
from taking any action with respect to the filing; and (iii) it may not assert Staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

We
hope you find that these responses adequately address the Staff’s questions, but please contact the undersigned at salman.khan@mara.com
and Jolie Kahn, Esq., at joliekahnlaw@sbcglobal.net, if you have any further questions or would like to discuss our responses.

    Sincerely,

    Salman
    Khan

    Chief
    Financial Officer

    Cc:
    Jolie
    Kahn, Esq.