United States securities and exchange commission logo
September 7, 2022
Gregory D. King
Chief Executive Officer
Osprey Bitcoin Trust
1241 Post Road, 2nd Floor
Fairfield, CT 06824
Re: Osprey Bitcoin
Trust
Amendment No. 4 to
Registration Statement on Form 10-12G
Filed August 18,
2022
File No. 000-56307
Dear Mr. King:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments. Unless we note otherwise, our
references to prior
comments are to comments in our July 13, 2022 letter.
Amendment No. 4 to Registration Statement on Form 10-12G
Risk Factors, page 6
1. Please include a
separately captioned risk factor addressing the risk that substantial sales
or dispositions by a
large Unitholder could negatively impact the price of your Units in the
secondary market.
Include a discussion of whether Celsius Network Ltd. sold or disposed
of a substantial number
of your Units this year and any negative impact on the price of
your Units in the
secondary market. We note that in your amended Form 10 filed June 10,
2022 you listed Celsius
Network Ltd. as beneficially owning 35.16% of your Units, but
you do not list Celsius
Network Ltd. as a principal Unitholder in the most recent
amendment. If you
believe that Unitholders will not be subject to such risk or that sales or
dispositions by Celsius
Network Ltd. did not have a negative impact on the price of your
Units, please explain
in your response letter.
Gregory D. King
Osprey Bitcoin Trust
September 7, 2022
Page 2
Because the holding period under Rule 144 and the lack of an ongoing redemption
program for
Unitholders..., page 19
2. We note your revised disclosure on pages 19 and 66 in response to
comment 4. Please
expand your added risk factor on page 19 to describe the effect on
investors who purchase
Units in the secondary market that are trading at a substantial
premium over or a
substantial discount to the NAV per Unit, discussing, for example, the
impact on
investors if, after they purchase Units, the premium decreases or
discount increases. Also
state, if true, that at times when the Units trade at a substantial
premium to the NAV per
Unit, investors who purchase Units on OTCQX may pay substantially more
for their Units
than investors who purchase Units in the private placements.
The lack of full insurance and Unitholders' limited rights of legal
recourse..., page 23
3. We note your revised disclosure in response to comment 6 and partially
reissue the
comment. As previously requested, please further revise this risk
factor to discuss the fact
that, as indicated on page 80, the Custodian's insurance is solely for
the benefit of the
Custodian and does not guarantee or insure the Trust in any way.
Unitholders are bound by the fee-shifting provision contained in the
subscription agreement,
which may discourage actions against us, page 25
4. We note your response to comment 7. Please revise your disclosure to
clarify whether the
Trust itself would be able to recover pursuant to the fee-shifting
provision. You refer in
your response letter to "claims involving the Trust, its Sponsor and
officers...." While
the risk factor refers to you "including [y]our Sponsor and its
officers" seeking to enforce
the provision, it does not specifically refer to the Trust seeking to
enforce the provision.
The Custodian, page 61
5. We note your revised disclosure in response to comment 10. While your
revised
disclosure states that Coinbase Custody was chartered in October of
2018, it remains
unclear what specific experience it has with respect to acting as a
Bitcoin custodian.
Please specifically discuss the experience of Coinbase Custody with
respect to acting as a
Bitcoin custodian.
Description of Issuance of Units, page 70
6. We note your revised disclosure in response to comment 13 including your
disclosure on
page 70 that "[i]f and when the Trust has an active offering of Units
and the Trust
determines an announcement of a halting of subscription agreement
offerings is necessary,
FirstName LastNameGregory D. King
it will post such information on its website ..." Please revise to
disclose the reasons why
Comapany NameOsprey
the Trust Bitcointhat
may determine Trust
an announcement of a halting of
subscription agreement
offerings
September would
7, 2022 Pagebe2 necessary.
FirstName LastName
Gregory D. King
FirstName LastNameGregory D. King
Osprey Bitcoin Trust
Comapany 7,
September NameOsprey
2022 Bitcoin Trust
September
Page 3 7, 2022 Page 3
FirstName LastName
Standard of Care; Limitations of Liability, page 80
7. We note that in response to comment 15, your revised disclosure
states, among others, that
"[t]he Custodial Services Agreement states that the Custodian s
maximum liability for
each cold storage wallet shall be limited to $100,000,000. Our
internal practice is to
maintain a value limit of $75,000,000 within each cold storage wallet.
We will engage the
Custodian for the creation of an additional cold storage wallet once
the value exceeds the
Custodian recommended limit of deposited Bitcoin in each cold storage
wallet of
$80,000,000." Please further revise to explain how you monitor the
value of Bitcoin
deposited in cold storage wallets for whether such value limits have
been met. In
addition, provide explanatory disclosure reconciling the fact that
although you have an
"internal practice" of maintaining a value limit of $75,000,000 within
each cold storage
wallet, you will not engage the Custodian for the creation of an
additional cold storage
wallet until the value in each cold storage wallet exceeds
$80,000,000.
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.
You may contact Michael Volley at 202-551-3437 or Amit Pande at
202-551-3423 if
you have questions regarding comments on the financial statements and related
matters. Please
contact David Lin at 202-551-3552 or John Dana Brown at 202-551-3859 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of Finance