United States securities and exchange commission logo
August 19, 2021
Bryan Bullett
Chief Executive Officer
Bit Digital, Inc.
33 Irving Place
New York, NY 10003
Re: Bit Digital, Inc.
Registration
Statement on Form F-3
Filed July 30, 2021
File No. 333-258330
Dear Mr. Bullett:
We have limited our review of your registration statement to
those issues we have
addressed in our 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.
Registration Statement on Form F-3
Cover Page
1. We note your disclosure
that you currently conduct your business through Bit Digital
Hong Kong Limited and
Bit Digital Strategies Limited. Please tell us whether you or your
subsidiaries currently
have operations conducted through variable interest entities based in
China. To the extent
that you do, we may have additional comments.
2. Provide prominent
disclosure about the legal and operational risks associated with being
based in or having a
substantial amount of the company s operations in China and Hong
Kong. Your disclosure
should make clear whether these risks could result in a material
change in your
operations and/or the value of your securities or could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless. Your disclosure
Bryan Bullett
FirstName
Bit Digital,LastNameBryan Bullett
Inc.
Comapany
August 19, NameBit
2021 Digital, Inc.
August
Page 2 19, 2021 Page 2
FirstName LastName
should address how recent statements and regulatory actions by China
s government, such
as those related to the use of variable interest entities and data
security or anti-monopoly
concerns, has or may impact the company s ability to conduct its
business, accept foreign
investments, or list on an U.S. or other foreign exchange.
Prospectus Summary, page 1
3. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in or having a material amount of the company s operations in
China poses to
investors. In particular, describe the significant regulatory,
liquidity, and enforcement
risks with cross-references to the more detailed discussion of these
risks in the
prospectus. For example, specifically discuss risks arising from the
legal system in China,
including risks and uncertainties regarding the enforcement of laws
and that rules and
regulations in China can change quickly with little advance notice;
and the risk that the
Chinese government may intervene or influence your operations at any
time, or may exert
more control over offerings conducted overseas and/or foreign
investment in China-based
issuers, which could result in a material change in your operations
and/or the value of
your securities. Acknowledge any risks that any actions by the Chinese
government to
exert more oversight and control over offerings that are conducted
overseas and/or foreign
investment in China-based issuers could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless.
4. Disclose each permission that you, your subsidiaries are required to
obtain from Chinese
authorities to operate and issue these securities to foreign
investors. State whether you or
your subsidiaries are covered by permissions requirements from the
CSRC or CAC and
state affirmatively whether you have received all requisite
permissions and whether any
permissions have been denied.
5. Provide a clear description of how cash is transferred through your
organization. Quantify
any cash flows and transfers of other assets by type that have
occurred between the
holding company, and its subsidiaries and direction of transfer.
Quantify any dividends or
distributions that a subsidiary has made to the holding company and
which entity made
such transfer, and their tax consequences. Similarly quantify
dividends or distributions
made to U.S. investors, the source, and their tax consequences.
Describe any restrictions
on foreign exchange and your ability to transfer cash between
entities, across borders, and
to U.S. investors. Describe any restrictions and limitations on your
ability to distribute
earnings from your businesses, including subsidiaries, to the parent
company and U.S.
investors.
6. Disclose that trading in your securities may be prohibited under the
Holding Foreign
Companies Accountable Act if the PCAOB determines that it cannot
inspect or fully
investigate your auditor, and that as a result an exchange may
determine to delist your
securities.
Bryan Bullett
Bit Digital, Inc.
August 19, 2021
Page 3
Our Company, page 1
7. Please provide detailed and clear disclosure about the current status
of your mining
operations in all geographical locations, such as the United States,
Canada and China.
For example, please (i) disclose where you intend to locate the miners
that are currently in
transit to the United States, (ii) disclose how many miners you intend
to purchase,
including an estimate of the cost of these additional miners, the type
of miners you intend
to purchase, the source of funds for such purchases, and the estimated
delivery of such
miners, (iii) provide a brief description of the type of miners you
currently own, (iv)
disclose the material terms of your agreements with Compute North,
Link Global
Technologies and Digihost Technologies, including additional details
regarding the profit
sharing arrangements and obligations of the parties to each of these
agreements, (v)
provide a brief description of any regulations in the United States
and Canada that impact
your operations, (vi) disclose whether you currently have any
operations in China, and, if
so, please describe these operations, (vii) disclose whether you store
your bitcoins with a
custodian, and, if so disclose the material terms of any such
agreements, and (viii) disclose
whether you have insurance for your miners or digital assets, and, if
so provide a brief
description of the insurance. Also, we note your disclosure that you
may sell bitcoin for
fiat currency from time to time depending on market conditions and
management's
determination of your cash flow needs. Please identify the factors
that management
considers when evaluating market conditions, identify the exchanges
that you use, identify
the fiat currency you receive for your bitcoins and disclose whether
you lend bitcoins to
third parties, and, if so the material terms of such loans.
Risk Factors, page 7
8. We note your disclosure on page 2 that "[i]n May 2021, when the
Financial Stability
Development Committee of the State Council in China targeted virtual
currency mining,
the Company suspended operations in China and continued to migrate all
miners out of
China, which will be completed in the third quarter 2021." Please
include a risk factor to
address the risk to investors due to a recent change in Chinese
government's actions. In
this regard, we note your risk factors on pages 15 and 29.
9. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to separately highlight the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your securities. Also,
given recent
statements by the Chinese government indicating an intent to exert more
oversight and
control over offerings that are conducted overseas and/or foreign
investment in China-
FirstName LastNameBryan Bullett
based issuers, acknowledge the risk that any such action could
significantly limit or
Comapany NameBit
completely Digital,
hinder yourInc.
ability to offer or continue to offer
securities to investors and
cause the value
August 19, 2021 Page 3 of such securities to significantly decline or be
worthless.
FirstName LastName
Bryan Bullett
FirstName
Bit Digital,LastNameBryan Bullett
Inc.
Comapany
August 19, NameBit
2021 Digital, Inc.
August
Page 4 19, 2021 Page 4
FirstName LastName
10. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China over data security, particularly for companies seeking to list
on a foreign exchange,
please revise your disclosure to explain how this oversight impacts
your business and your
offering and to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
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 Rules 460 and 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 Tonya K. Aldave at (202) 551-3601 or Sonia Bednarowski at
(202) 551-
3666 with any questions.
Sincerely,
Division of
Corporation Finance
Office of Finance
cc: Elliot H. Lutzker, Esq.