Mail Stop 4561
June 26, 2018
Charles W. Allen
Chief Executive Officer
BTCS Inc.
9466 Georgia Avenue #124
Silver Spring, MD 20901
Re: BTCS Inc.
Amendment No. 5 to Registration Statement on Form S-1
Filed May 16, 2018
File No. 333-219893
Dear Mr. Allen:
We have reviewed your amended 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. Unless
we note
otherwise, our references to prior comments are to comments in our April 18,
2018 letter.
General
1. Your response to prior comment 4 refers to information on your website
indicating that
you are "the first pure-play" U.S. public company involved with digital
assets and block
chain technologies. Your disclosure states that you plan to provide your
investors with a
"diversified pure-play exposure to bitcoin and blockchain technologies."
Please define
the term "diversified pure-play" and explain what distinguishes you from
other public
companies with similar goals and operations.
Charles W. Allen
BTCS Inc.
June 26, 2018
Page 2
2. In the glossary, you state that digital assets are commonly referred to
as "cryptocurrency
or virtual currency." Please clarify that the use of these terms is not
indicative of the
regulatory or accounting distinction of digital assets and that digital
assets therefore may
be deemed securities or other types of assets. In addition, explain that
not all digital
assets function as a medium of exchange.
3. We note that your portfolio will focus only on bitcoin and "other
protocol
tokens." Please explain how protocol tokens differ from other types of
tokens, and
discuss whether there are any material challenges related to this
limitation. Further,
clarify how your portfolio will provide investors with exposure to
bitcoin and blockchain
industries.
4. We note the prospectus does not include the information that you
provided in response to
prior comment 3. Please revise. Further, we note that such response
indicates that you
may otherwise pursue strategic opportunities involving the acquisition
of "businesses
using blockchain technology and those involved with digital assets."
Please clarify how
such opportunities may be different from, and synergistic to, your
creation of a portfolio
of digital assets and the potential resumption of your transaction
verification
services. Explain the scope of the blockchain technology applications
and digital asset
activities that you would consider acquiring. In this regard, we note
prior disclosure
indicating that you were pursuing a company that owns and operates a
digital asset
exchange.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Accounting Treatment of Digital Assets, page 26
5. You state that you plan to create a portfolio of digital assets. In
order to facilitate our
evaluation of your analysis of ASC 946, please tell us what this means
and clarify your
business purpose for creating this portfolio. In this regard, explain
whether you intend to
use the portfolio as part of your operations and, if so, how; or tell us
whether you intend
to hold these assets for appreciation.
6. In response to comment 5, you state the "company has the objective of
obtaining returns
from capital appreciation or investment income." Please explain further
how this
statement supports your conclusions that you do not meet the fundamental
characteristics
of an investment company pursuant to ASC 946-10-15-6.
Consolidated Financial Statements
General
7. A comparison of your December 31, 2017 Form 10-K to your March 31, 2018
Form 10-
Q suggests that you have changed classifications on the statements of
operations and cash
flows related to your digital assets. Please identify the changes for us
and provide an
Charles W. Allen
BTCS Inc.
June 26, 2018
Page 3
analysis, with specific citation to authoritative literature, supporting
the appropriateness
of the revised classifications.
Note 4. Summary of Significant Accounting Policies
Digital Currencies Translations and Remeasurements, page F-8
8. You state in your response to prior comment 5 that your digital assets
meet the definition
of an intangible asset. While we continue to assess your responses
related to investment
company accounting, please note that we are unable to identify a scope
exception in ASC
350-30 that permits the measurement of intangible assets at fair value
in each reporting
period. Please describe for us your basis for measuring your digital
assets at fair value.
If your digital assets are within the scope of ASC 350-30, please revise
your accounting
to comply with those requirements.
You may contact Kathleen Collins, Accounting Branch Chief, at (202)
551-3499 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Bernard Nolan, Staff Attorney, at (202) 551-6515 or, in his absence, me
at (202) 551-
3453 with any other questions. If you require further 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.