United States securities and exchange commission logo
September 29, 2021
Bryan Bullett
Chief Executive Officer
Bit Digital, Inc
33 Irving Place
New York, NY 10003
Re: Bit Digital, Inc
Amendment No. 1 to
Registration Statement on Form F-3
Filed September 3,
2021
File No. 333-257934
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.
Amended Form F-3 filed September 3, 2021
Cover Page
1. We note your response
to our prior comments 2 and 9. Although we note disclosure that
your activities may not
be deemed to be operation activities by a foreign legal person or
entity under PRC law,
you nevertheless appear to have remaining operations in China
including warehousing
29.2% of your hardware and engaging 10 employees. Please
provide prominent
disclosure about the legal and operational risks associated with your
remaining operations in
China, including a discussion on how the recent ban of digital
asset transactions in
China impacts your business and whether it will impact your
corporate structure
going forward. 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
Bryan Bullett
FirstName
Bit Digital,LastNameBryan Bullett
Inc
Comapany 29,
September NameBit
2021 Digital, Inc
September
Page 2 29, 2021 Page 2
FirstName LastName
securities to investors and cause the value of such securities to
significantly decline or be
worthless. Alternatively, if you believe that your remaining
operations in China pose no
such risks, including no risks to the value of your securities, please
provide us your factual
and legal analysis explaining why that is the case.
2. We note your response to our prior comments 1 and 2. On pages 3 and
S-4, you state that
you are in the process of registering a wholly-owned subsidiary to do
business in
China, and, on pages 3 and S-5, you state that you have operating
entities in China. Please
provide a separately captioned section in the Summary of Information
and Prospectus
Supplement Summary explaining your current and planned corporate
structure, including
diagrams for each. Include a discussion of the purpose of your planned
PRC subsidiary
and describe the operations in which it will engage. Explain whether
this will involve the
use of a variable interest entity. To the extent material, discuss any
attendant risks to this
new PRC subsidiary or the business you plan to do in China and include
cross references
to relevant risk factors. Also, please clearly describe the operations
of your operating
entities in China and include cross references to relevant risk
factors.
Incorporation by Reference, page 2
3. Please revise your disclosure on page 2 to specifically incorporate by
reference your 6-K
for the quarter ended June 30, 2021 filed on August 20, 2021.
Summary of Information, page 3
4. We note your response to our prior comment 3. In your Summary of
Information on page
3 and the Prospectus Supplement Summary on page S-4, describe any
significant liquidity
risks relating to your prior, current, or future corporate structure
or operations in China,
with cross-references to the more detailed discussion of these risks
in the prospectus.
5. We note your response to our prior comment 5. Please revise your
"Transfer of cash" and
"Payment of dividends or distributions" discussions on page 7 to
quantify the transactions
discussed. Additionally, revise your "Payment of dividends or
distributions" discussion to
discuss the tax consequences of the transactions discussed therein
Our Business, page 4
6. We note your response to our prior comment 7, and reissue in part. In
that regard, please:
Revise to provide quantitative information regarding each of your
hosting agreements
with Compute North, Link Global, and Digihost, regarding, for
example, fees and
profit sharing;
Disclose the material terms of your agreement with BlockFusion
USA, including
quantitative terms;
Provide a brief description of any regulations in Canada that
impact your operations;
Further disclose the material terms of your custodian agreements
with Matrixport
Cactus and Copper, including for example in what manner they are
required to store
your digital assets, whether they are contractually required to
hold your digital assets
Bryan Bullett
Bit Digital, Inc
September 29, 2021
Page 3
in cold storage, what security precautions your custodians are
required to undertake,
what inspection rights you have, and what type of insurance your
custodians are
required to have to protect you from loss;
Identify the factors that management considers when evaluating
market conditions in
considering whether to sell bitcoin;
Disclose whether your custodians store all digital assets you own,
including
stablecoins, or explain in sufficient detail how you store such
stablecoins;
Disclose whether you hold any insurance for your digital assets,
and, if so, provide a
brief description of the insurance; and
State the interest rate you charge on bitcoin loans that you make.
Risk Factors, page 10
7. We note your response to our prior comment 8. Disclose in the "Our
Business" section
beginning on page 4, whether you continued any bitcoin mining operations
after any
government mining bans in China, national or otherwise, were put into
effect. To the
extent you continued any mining operations after any bans were put into
effect, provide
specific risk factor disclosure addressing the possible consequences. In
that regard we
note that in May 2021 the Chinese government targeted virtual currency
mining, but you
did not cease mining operations in China until June 2021.
8. We note your response to our prior comment 10. You state on page 16 that
"due to [y]our
past mining operations in China, [you] may be deemed to be a 'data
processor carrying out
data processing activities' under the Measures." In light of this,
disclose why you believe
you "currently are not required to obtain clearance from the CAC before
[y]our listing in
the United States under the recently enacted or proposed regulations or
rules."
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 John Dana Brown at 202-551-3859 or Sonia Bednarowski at
202-551-
3666 with any questions.
Sincerely,
FirstName LastNameBryan Bullett
Comapany NameBit Digital, Inc Division of
Corporation Finance
Office of Finance
September 29, 2021 Page 3
cc:
FirstName Elliot H. Lutzker, Esq.
LastName