September 6, 2017
Charles W. Allen
Chief Executive Officer
BTCS Inc.
9466 Georgia Avenue #124
Silver Spring, MD 20901
Re: BTCS Inc.
Registration Statement on Form S-1
Filed August 10, 2017
File No. 333-219893
Dear Mr. Allen:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Prospectus Summary, page 1
1. You indicate that your new line of business focuses on open market
purchases of digital
assets and investing in initial digital asset offerings. Revise to
describe with more
specificity the types of digital assets that you intend to invest in and
any parameters or
criteria that you will use to make such investment determinations.
Expand to briefly
discuss the nature of your current operations and identify the types of
digital currencies
that you currently hold.
2. We note your Form 8-K filed on August 21, 2017 indicating that you
signed a letter of
intent to merge with Blockchain Global Limited. Expand your summary to
discuss the
risks and challenges relating to consummating the merger, including any
regulatory risks
related to Blockchain Global Limited's business. Additionally, tell us
whether the
operations of BCG's Technology Consultancy business, which you state
includes the
preparation and support of initial coin offerings, and the operations of
the ACX.io
Charles W. Allen
BTCS Inc.
September 6, 2017
Page 2
Exchange will trigger any obligations under the federal securities laws,
including, but not
limited to, any requirements to register as a national securities
exchange, alternative
trading system or broker-dealer.
3. The disclosure on pages 20-21 briefly describes why you do not believe
that BTCS, Inc.
is an investment company under the Investment Company Act of 1940.
Please provide
further information needed to conduct an analysis under sections
3(a)(1)(A) and
3(a)(1)(C) of the 1940 Act and any other provision of the 1940 Act upon
which BTCS,
Inc. is relying to exclude it from the definition of an investment
company. In particular,
list all assets held by BTCS, Inc. and the value you assign to each on
an unconsolidated
basis. Ensure that your analysis also addresses your plans to
participate in initial coin
offerings.
Risk Factors
"Since there has been limited precedence set for financial accounting of
Digital ...," page 6
4. Rather than referring to "Digital Assets" generally, revise your risk
factor disclosure to
distinguish between the types of assets you are referring to and any
uncertainties specific
to that category of currency.
Risks Related to the Bitcoin Network and Bitcoins, page 10
5. In light of your stated intent to invest in digital tokens and
participate in initial coin
offerings, expand your risk factors to address the specific risks
related to investing in and
holding these types of assets. Expand to discuss with specificity the
impact on your
business if your assets are deemed to be securities for the purposes of
federal securities
laws. Further, to the extent that your proposed merger with Blockchain
Global Limited
raises any other regulatory obligations under the federal securities
laws, ensure that you
discuss any resulting material risks to your business.
Business
Industry and Market Overview (Bitcoin and Blockchain Technologies)
Introduction to Bitcoins and the Bitcoin Network, page 34
6. In light of your stated intent to invest in assets other than bitcoins,
expand your disclosure
to describe the nature and characteristics of these assets. Although
your discussion
addresses the implications related to the possibility of bitcoins being
deemed securities,
expand to address the various types of digital currencies and assets
that you intend to
hold, which you state includes protocol tokens. Revise your disclosure
under
Government Oversight on page 42 to address the regulatory treatment of
these assets.
Charles W. Allen
BTCS Inc.
September 6, 2017
Page 3
Principal Shareholders, page 51
7. Revise your principal stockholder table to include beneficial ownership
of all classes of
voting securities, including Class B and C common stock. See Item 403
of Regulation
S-K.
Other
8. We note instances where you refer to your fiscal year ended as June 30,
whereas
elsewhere you state that your fiscal year end is December 31. Revise or
advise.
9. Please update your financial statements and related financial
information included in the
filing, as necessary, to comply with Rule 3-12 of Regulation S-X.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rule 461 regarding requests for acceleration. Please allow
adequate time for us
to review any amendment prior to the requested effective date of the
registration statement.
Please contact Ivan Griswold, Staff Attorney, at (202) 551-3853 or me at
(202) 551-3453
with any questions. If you require additional assistance, you may contact
Barbara C. Jacobs,
Assistant Director, at (202) 551-3730.
Sincerely,
/s/ Jan Woo
Jan Woo
Legal Branch Chief
Office of
Information Technologies
and Services
cc: Michael D. Harris, Esq.
Nason, Yeager, Gerson, White & Lioce, P.A.