RESOLVING THE LEDGER
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Topline A Trump-linked cryptocurrency mining company, American Bitcoin, disclosed Monday that it settled a Justice Department allegation accusing it of improperly obtaining a pandemic relief loan, agreeing to pay millions of dollars as it omitted the settlement from its positive earnings narrative.
A 10-Q form filed by American Bitcoin on Monday said it agreed to pay $2.5 million to settle the allegations that Gryphon Digital Mining, a company it merged with last year, wrongfully received a Paycheck Protection Program loan, which were given out to small businesses during the height of the COVID-19 pandemic.
A filing for the quarter ended March 31 from American Bitcoin said there was “no formal demand for return of the PPP Loan proceeds, and no formal claim or lawsuit has been initiated."
The loan at the heart of the allegations was for $2.2 million and given to Gryphon when it operated as a software provider for the cannabis industry, which the Small Business Administration said made it ineligible for the PPP.
The loan was forgiven by the SBA in 2021, but the agency walked its decision back in 2024, saying in a letter it was “considering a full denial of the previously received forgiven amount” as the Justice Department issued a civil investigative demand.
Gryphon, which used to operate as Akerna, responded to the letter and argued why it believed it was eligible for the PPP loan.
American Bitcoin shares closed up nearly 5% at $6.14 on Tuesday, continuing a series of gains after reporting earnings, which logged record bitcoin production and mentioned the settlement in the commitments and contingencies footnote.
American Bitcoin launched last year and was co-founded by Eric Trump and Donald Trump Jr. The company was formed through a transaction in which digital compute platform Hut 8 offered its cryptocurrency mining fleet to a new entity that merged with Gryphon last September, inheriting Gryphon's legal liabilities and the PPP dispute. American Bitcoin designated the matter as an unresolved contingency through its first quarter filing this year, just disclosing it was cooperating with the Justice Department. The $2.5 million settlement exceeds the original $2.2 million loan, suggesting additional costs were added to the resolution in addition to repayment.
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