Organizations Begin to Adopt Innovative Blockchain Solutions

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Mar 31, 2021, 09:00 ET

NEW YORK, March 31, 2021 /PRNewswire/ -- A major portion of the economy has transitioned to remote operations, yet most workers are still unclear on how long it will take until the system returns to pre-pandemic norms. As a result, several sectors in the technology industry have grown in demand. For example, cloud computing, digital payments and in particular the cryptocurrency and blockchain segments are back at the center of attention this year. As a result of the recent crypto boom, investors have once again started to view the new digital currencies as potential long-term investments necessary in a properly diversified portfolio. Therefore, it is not surprising that ETFs with a focus on crypto and blockchain are doing as well as they are. "Just over three years ago we launched the first actively-managed ETF focused on the dynamic market segment of blockchain-related stocks," said Amplify CEO Christian Magoon. "BLOK has provided investors with additional portfolio diversification through its unique portfolio makeup that includes the Bitcoin Investment Trust. Blockchain technology is primarily known for one application today: cryptocurrency." DMG Blockchain Solutions Inc. (TSX-V: DMGI) (OTC: DMGGF), Argo Blockchain Plc (LSE: ARB) (OTC: ARBKF), Marathon Patent Group, Inc. (NASDAQ: MARA), Riot Blockchain, Inc. (NASDAQ: RIOT), 500.com Limited (NYSE: WBAI)

In recent years, many companies and organizations have become more friendly towards blockchain and cryptocurrencies. As a result, there has been an influx of companies buying bitcoin and accepting it as payment. For example, earlier this month Meitu, a Chinese company that makes a photo editing app, has accepted USD 22.1 Million worth of ether and USD 17.9 Million worth of bitcoin. "The Board believes cryptocurrencies have ample room for appreciation in value and by allocating part of its treasury in cryptocurrencies can also serve as a diversification to holding cash (which is subject to depreciation pressure due to aggressive increases in money supply by central banks globally) in treasury management," Meitu said, according to a report by CNBC. This follows companies like Tesla and Square, which have also put emphasis on cryptocurrency.

DMG Blockchain Solutions Inc. (TSX-V: DMGI) (OTCQB: DMGGF) just announced breaking news that it has, "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 2020, 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

"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 (LSE: ARB)(OTCQX: ARBKF) will provide further updates on the Terra Pool as developments and progress occurs."

For our latest "Buzz on the Street" Show featuring DMG Blockchain Solutions Inc., recent corporate news, please head over to: https://www.youtube.com/watch?v=zgPLlpXAiHs

Argo Blockchain Plc (LSE: ARB) (OTCQX: ARBKF) and DMG Blockchain Solutions Inc. announced last week news regarding Terra Pool (the "Pool"), the world's first Bitcoin mining pool powered by clean energy. Aligning with the latest climate science, Terra Pool will work to better manage the impact of Bitcoin mining on the climate. As founding shareholders and partners, DMG and Argo have entered into a Memorandum of Understanding to establish Terra Pool, a cooperative effort to launch a Bitcoin mining pool exclusively powered by clean energy. Initially, the Pool will consist of both DMG's and Argo's hashrate, which currently uses energy generated by hydroelectric resources.

Marathon Patent Group, Inc. (NASDAQ: MARA) announced last month that it has provided a one-year grant to world-renowned bitcoin core developer Jonas Schnelli. Marathon's grant follows Coinbase's recent decision to help contribute to the development of Bitcoin Core by offering grants to two developers: Joao Barbosa and an anonymous developer known only as 0xB10C. Both Barbosa and Schnelli had been receiving funding from crypto mining giant, Bitmain. However, in late 2020, Bitmain decided to stop providing its support, at which point Coinbase and Marathon Patent Group independently decided to step in and offer alternative sources of funding with their respective developer grants.

Riot Blockchain, Inc. (NASDAQ: RIOT) reported earlier this month that it will achieve an estimated hash rate capacity of 1.06 Exahash per second ("EH/s") with the deployment of the newly received 2,002 S19 Pro Antminers. "Exceeding 1 EH/s in hash rate capacity marks a major milestone for the Company," said Jason Les, CEO of Riot. "While we are proud of this accomplishment, we view it as the successful completion of just one of many steps of our ongoing growth plan. Riot continues to receive and deploy next-generation miners from Bitmain and remains on schedule to more than triple our currently deployed capacity by the fourth quarter of 2021."

500.com Limited (NYSE: WBAI) announced earlier this month that it has completed its acquisition of bitcoin mining machines owned by certain non-U.S. persons in exchange for an aggregate of 11,882,860 newly-issued Class A ordinary shares valued at US$1.21 per share, corresponding to US$12.10 per American Depositary Share ("ADS") (based on the ratio of ten ordinary shares per ADS), the closing trading price of the Company's ADSs on January 8, 2021. This transaction was previously announced on January 11, 2021. The bitcoin mining machines acquired in this transaction (the "Bitcoin Mining Machines") include such models as the S17, T17, M20s and S9.

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