Marathon Digital Holdings (MARA.Q) announced their intention to move their bitcoin miners from their mining facility in Hardin, Montana to new locations where they can take advantage of more sustainable and carbon friendly sources of power. This is what’s called getting with the program, but it’s not as voluntary as appears on the surface. Sure. In 2021, the company said they would push their mining operations to be 100% carbon neutral by the end of 2022, but look closer. There’s greenwashing afoot.

Here’s a handy definition from wikipedia:

“Greenwashing, also called “green sheen”, is a form of marketing spin in which green PR and green marketing are deceptively used to persuade the public that an organization’s products, aims and policies are environmentally friendly.“

Technically, moving out of their Hardin, Montana facility, which uses power derived from a coal fired power plant, to other places that use sustainable energy sources is a step in the right direction. But we can’t necessarily say this is out of some variety of environmental altruism. This facility in Montana is the exact one that’s presently embroiled in a class action suit.

Marathon formed a joint venture with Beowulf Energy to provide low-cost power to Marathon’s mining operations. In connection, they signed a bunch of agreements with multiple parties to build their data centre in Hardin, Montana, and blew out 6 million shares to the associated parties.

The lawsuit alleges that the company lied to shareholders about its JV and its relationship to Hardin, which may have included potential regulatory violations, including those of U.S security law violations, thereby increasing exposure MARA to risk of regulatory scrutiny. The stock dropped 27% during the proposed time.  Getting away from the facility in Hardin makes sense.

There’s zero reason to believe MARA would have gotten with the environmental program if their Hardin facility were operational, but if this is what’s required to get Bitcoin miners to comply. The problem, of course, is incentives. If companies were properly incentivized—or more specifically, the economic penalties they faced for noncompliance—then maybe Bitcoin mining wouldn’t be so environmentally catastrophic.

—Joseph Morton