United States securities and exchange commission logo
February 16, 2023
Jian Wang
Chairman of the Board
Lion Group Holding Ltd
3 Phillip Street, #15-04
Royal Group Building
Singapore 048693
Re: Lion Group Holding
Ltd
Registration
Statement on Form F-3
Filed January 20,
2023
File No. 333-269333
Dear Jian Wang:
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 filed January 20, 2023
General
1. Please include or
incorporate by reference interim financial statements.
2. Please included updated
disclosure on the current status of your cryptocurrency mining
activities.
3. Please provide a
description of your internal processes for how you determine, or will
determine as you expand
your business, whether particular crypto assets (including NFTs)
are securities within
the meaning of the U.S. federal securities laws. Please also clarify
that such processes are
risk-based assessments made by the company and are not a legal
standard or binding on
any regulatory body or court. Further, please include a risk factor
Jian Wang
FirstName
Lion GroupLastNameJian
Holding Ltd Wang
Comapany16,
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addressing the uncertainty of such assessments and the consequences of
making an
incorrect assessment or a regulatory body or court disagreeing with
the company s
assessment. Finally, please address the potential regulatory risks
under the U.S. federal
securities laws if such crypto assets are determined to be securities,
such as compliance
with Section 5 of the Securities Act or whether the company could
become subject to
regulation as a national securities exchange or as a broker-dealer
under the Securities
Exchange Act of 1934.
4. Please disclose any significant crypto asset market developments
material to
understanding or assessing your business, financial condition and
results of operations, or
share price since your last reporting period, including any material
impact from the price
volatility of crypto assets.
5. To the extent material, please discuss how the bankruptcies of certain
crypto asset market
participants, and the downstream effects of those bankruptcies have
impacted or may
impact your business, financial condition, customers, and
counterparties, either directly or
indirectly. Clarify whether you have material assets that may not be
recovered because of
the bankruptcies or may otherwise be lost or misappropriated.
6. If material to an understanding of your business, please discuss any
steps you take to
safeguard your customers crypto assets and describe any policies
and procedures that are
in place to prevent self-dealing and other potential conflicts of
interest. Describe any
policies and procedures you have regarding the commingling of assets,
including
customer assets, your assets, and those of affiliates or others.
Identify what material
changes, if any, have been made to your processes in light of the
current crypto asset
market disruption.
7. We note that you own or have issued crypto assets and hold crypto
assets on behalf of
third parties. To the extent material, please explain here or in your
incorporated
Management s Discussion and Analysis whether these crypto assets
serve as collateral for
any loan, margin, rehypothecation, or other similar activities to
which you or your
affiliates are a party. If so, identify and quantify the crypto assets
used in these financing
arrangements and disclose the nature of your relationship for loans
with parties other than
third-parties. State whether there are any encumbrances on the
collateral. Discuss
whether the current crypto asset market disruption has affected the
value of the underlying
collateral.
8. To the extent material, please explain whether, to your knowledge,
crypto assets you have
issued serve as collateral for any other person s or entity s
loan, margin, rehypothecation
or similar activity. If so, discuss whether the current crypto asset
market disruption has
impacted the value of the underlying collateral and explain any
material financing and
liquidity risk this raises for your business.
Risk Factors, page 12
9. Refer to your KYC procedures risk factor disclosure on pages 12-13.
This disclosure
Jian Wang
Lion Group Holding Ltd
February 16, 2023
Page 3
appears to focus on the activities of clients that could undermine the
effectiveness of such
procedures. Please expand the disclosure to address the risks with
procedures themselves,
including the limitations of using an IP blacklist.
10. To the extent material, please discuss any reputational harm you may
face in light of the
recent disruption in the crypto asset markets. For example, discuss
how market conditions
have affected how your business is perceived by customers,
counterparties, and regulators,
and whether there is a material impact on your operations or financial
condition.
11. We note that you are not authorized or permitted to offer your
products and services to
customers outside of the jurisdictions where you have obtained the
required governmental
licenses and authorizations. Please describe any material risks you
face from
unauthorized or impermissible customer access to your products and
services outside of
those jurisdictions. Also describe any steps you take to restrict
access of U.S. persons to
your products and services and any related material risks.
12. Please describe any material risks to your business from the
possibility of regulatory
developments related to crypto assets and crypto asset markets.
Identify material pending
crypto legislation or regulation and describe any material effects it
may have on your
business, financial condition, and results of operations.
13. Please describe any material risks you face related to the assertion
of jurisdiction by U.S.
and foreign regulators and other government entities over crypto
assets and crypto asset
markets.
14. Please describe any material risks related to safeguarding your, your
affiliates , or your
customers crypto assets. Describe any material risks to your
business and financial
condition if your policies and procedures surrounding the safeguarding
of crypto assets,
conflicts of interest, or comingling of assets are not effective.
15. To the extent material, please describe any gaps your board or
management have
identified with respect to risk management processes and policies in
light of current crypto
asset market conditions as well as any changes they have made to
address those gaps.
16. To the extent material, please describe any of the following risks from
disruptions in the
crypto asset markets:
Risk from depreciation in your stock price.
Risk of loss of customer demand for your products and services.
Financing risk, including equity and debt financing.
Risk of increased losses or impairments in your investments or other
assets.
FirstName
LastNameJian Wang
Risks of legal proceedings and government investigations, pending
or known to be
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NameLion Group HoldingStates
in the United Ltd or in other jurisdictions against
you or your affiliates.
16,
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3 declines or price volatility of crypto assets.
FirstName LastName
Jian Wang
FirstName
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Holding Ltd Wang
Comapany16,
February NameLion
2023 Group Holding Ltd
February
Page 4 16, 2023 Page 4
FirstName LastName
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 Jessica Livingston at 202-551-3448 or J. Nolan McWilliams,
Acting Legal
Branch Chief, at 202-551-3217 with any questions.
Sincerely,
Division of
Corporation Finance
Office of Crypto
Assets
cc: Lawrence Venick