August 26, 2022

Division of Corporate Finance

United States Securities and Exchange

Commission

Washington, DC 20549

Melissa Walsh

Gentlepersons:

Further to our letters of August 1, 2022 and August 5, 2022, enclosed please find our responses to comments 11, 12 and 13 as contained in your June 24^th letter. Unless the context otherwise applies, we refer to the comments in your June 24^th letter as “comments” and comments in your prior comment letters as “prior comments”. For ease of reference, we have set forth each of your comments below in bold with our response to each comment set forth immediately below each such comment.

Revenue Recognition, page F-15

The Company acknowledges the Staff’s comments regarding the delay in constructive receipt of the mining reward and would like to clarify that in all cases, transaction fees and block rewards are recognized based on the closing price in USD as of 23:59 GMT on the day the reward was earned (not the date it was received upon settlement). Any delay between confirmation from NYDIG and back-end settlement into the pool wallet does not change the value of noncash consideration (BTC) received as such recognition of noncash consideration occurs in accordance with the accounting convention outlined below.

ASC 606-10-32-21 requires noncash consideration to be measured at fair value at contract inception. As outlined in our response to comment 12 below, contract inception under ASC 606 occurs at the time the Company successfully validates a block of transactions. BTC is traded 24 hours a day, 365 days per year, making it extremely difficult, if not impossible, to ascertain contract inception for each contract that conceptually exists and is fulfilled. As a result of this challenge the Company, as a practical expedient utilizes a specific time each day accounting convention in estimating the fair market value of noncash mining rewards in USD. Under the accounting convention utilized by the Company BTC rewards during any given day are aggregated and the associated revenue is measured using the BTC closing price for that day as defined by Yahoo Finance. We use the resulting value as the day’s contract price for the day’s mined BTC.

We acknowledge that this accounting convention diverges from the guidance in ASC 606-10-32-21, and therefore we have analysed the difference between the Company’s accounting convention and the revenue that would have been recognized using an average (mean) price of BTC for the day. We note that the average price for the day also diverges from ASC 606-10-32-21, but we consider this to be another reasonable “practical expedient” in measuring revenues in USD given the circumstances outlined above.

If the Company had recognized revenue using an average daily price of BTC:

As such, the Company believes its accounting convention described above is materially compliant with ASC 606-10-32-21 and ASC 606-10-32-23. Further, we believe, given the volatility in BTC prices, that the changes in fair value included in the transaction price recognized as revenue would never all flow in one direction (i.e., increasing or decreasing revenue) during any reporting period.

The Company will prospectively clarify the use of this accounting convention in its revised accounting policy within Note 2 – Significant Accounting Policies, Revenue from Contracts with Customers in future filings. The proposed accounting policy is enclosed below in response to comment 13.

The Company respectfully acknowledges the Staff’s collective comments in the correspondences dated April 8, 2022, May 27, 2022, and June 13, 2022, and has comprehensively re-evaluated its revenue recognition accounting policy. What follows is our analysis of the critical components of revenue recognition as they relate to our business.

Background

The Company’s central operations focus is to use computing power to solve cryptographic algorithms to record and publish BTC transactions to blockchain ledgers or provide BTC transaction verification services to the bitcoin network (such activity, “mining”). The Company also operated a mining pool that included a small number of third parties from May 2021 until March 2022. In return for verifying transactions to be added as a new block to the network (i.e., ‘solving’ a block), the Company is (and its pool that included third parties was) entitled to receive transaction fees and block rewards in the form of BTC. Transaction fees are specified in each block of transactions request and are paid by the requester (collective requesters within a block of transactions, the “network”). The BTC protocol itself currently issues a block reward for each solved block at a current rate of 6.25 BTC per block. Such reward is expected to be reduced to half of that in 2024.

Identify the performance obligations in the contract

The performance obligation in each contract is to verify a block of transactions for the network; there are no other performance obligations in our contracts. A contract arises, and the Company’s performance obligation is satisfied, at the point in time the Company has successfully validated a transaction.

Measure and allocate the transaction price

The amount to which the Company is entitled for successfully validating a block of transactions is fixed at the point in time the contract exists, and the performance obligation is satisfied. Thus, there is no variable consideration. The Company’s response to comment 11 above addresses the ASC 606 effects of the transaction fees and block rewards being paid in non-cash consideration (i.e., BTC).

Because validating the applicable transaction is the only performance obligation in the contract, the transaction price is allocated entirely to that performance obligation.

Recognize revenue

Revenue is recognized in BTC at the point in time the Company successfully validates the transaction and thus, satisfies its sole performance obligation in the contract. The fair value of this non-cash consideration is then estimated in USD as discussed in our response to comment 11 above.

Mining pools

In order to provide transaction verification services at a faster rate, thereby enhancing the probability of participating in the solving of a block and earning revenue, miners may choose to deploy their computing resources into a larger mining pool. As previously stated, the Company operated a mining pool that included a small number of third parties from May 2021 until March 2022. The Company assessed whether it should be considered the principal or the agent in its capacity as a pool operator. ASC 606-10-55-37 indicates that an entity is principal in an arrangement if the entity controls the specified good or service before that good or service is transferred to a customer. Below is a summary of our analysis as it relates to the operation of the pool and the use of third party computing power to verify a block of transactions for the network. Our conclusions are italicised and we refer to the pool as the “reporting entity” in the discussion that follows.

Evaluation of the elements of Control

“Control” is defined in ASC 606-10-25-25 as the ability to direct the use of, and obtain substantially all of the remaining benefits from, an asset. ASC 606-10-55-37A states the following:

When another party is involved in providing goods or services to a customer, an entity that is a principal obtains control of any one of the following:

ASC 606-10-55-39 provides indicators as to whether the entity controls the specified goods or services and talks about the three criteria, including (a) primary responsible party, (b) inventory risk and (c) discretion in establishing prices. The Company evaluated each of these criteria as follows:

Primary responsible party

As previously stated, the Company recently completed a comprehensive analysis of numerous factors that would be indicative that the reporting entity (i.e., the pool that included third parties from May 2021 to March 2022) is primarily responsible for fulfilling the obligation. Per Chapter 10 of the PwC Guide on Revenue Recognition, factors that might indicate the reporting was a primary responsible party include:

Inventory risk

Discretion in establishing prices

Conclusion – Principal vs. Agent

Finally, we will address the question as to why “revenues associated directly with BTC mining activities are recorded net of any pool fee with an offsetting cost of revenue. Explain why the pool fee revenue you earn as the pool operator would be a reduction to revenue.” Our previous answer was unclear in that it implied that pool fees always apply, and that is not the case. To clarify:

This is a standard industry standard approach to pool fees - participants in all mining “pools” recognize revenues based on the percentage of processing power (“hashrate”) contributed to the pool on any block successfully earned by the pool. This mining revenue is always rewarded net of any pool fees that are charged by the pool operator.

The Company has recognized revenues from three sources in the past, BTC mining (also known as block rewards), transaction fees and pool fees. Pool fees, which were discussed above, were received during the period the company ran a pool that included Third-party miners (May 2021 to March 2022), which it has since discontinued. The Company has evaluated the impact of pool fees and transaction fees charged to third parties and concluded that such amounts were immaterial, individually and in the aggregate, to the company’s total revenue in 2021 and 2020. Given the Staff’s comments, the Company will clarify its future disclosures with respect to revenue recognition from its two remaining sources of revenue (transaction fees and block rewards) including revising its revenue recognition policy, a draft of which is outlined below. We will also provide footnote disclosure of the amount of revenue from each source (mining and transaction fees, which will be ongoing, and pool fees as required for certain periods in 2021 and 2022) as applicable in our future filings.

Our draft revised revenue recognition policy follows:

Revenue From Contracts with Customers

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company’s ongoing central operations focus is to provide BTC transaction verification services to its customers. The Company views the transaction requestor and the blockchain network as its customers under FASB ASC 606 for transaction fees and block rewards, respectively, to whom it provides a service (successful mining) that is an output of the Company’s ordinary activities in exchange for consideration. A contract with a customer exists at the point when the Company successfully validates a transaction to the distributed ledger. At this point, the performance obligation to validate the requested transaction has been satisfied in accordance with FASB ASC 606-10-25-30, and the criteria in FASB ASC 606-10-25-1 are met as follows:

By successfully mining a block, the Company satisfies its lone performance obligation to its customer and, thus, should recognize revenue at that point in time.

The transaction consideration the Company receives is noncash consideration paid in BTC, and is comprised of transaction fees and block rewards. Transaction fees are specified in each transaction request and paid by the requester. Block rewards are incentives awarded to miners who successfully validate a block of transactions and occur at a specified rate (currently 6.25 BTC per solved block) that halves approximately every four years or after every 210,000 blocks are mined. FASB ASC 606-10-32-21 requires that an entity measure the estimated fair value of noncash consideration at contract inception. While the Company has determined that contract inception coincides with the time at which the transaction fees and block rewards are earned, for operational practicality reasons it applies an accounting convention that uses the quoted daily closing U.S. dollar spot rate of BTC each day to estimate the fair value (in USD) of BTC fees and block rewards earned during that day. This accounting convention does not result in materially different revenue recognition from using the fair value of the BTC earned at contract inception and has been consistently applied in all periods presented.

Expenses associated with running the BTC mining operation, such as costs for “hosting” services at data centers, electricity costs, and other operating costs directly related to mining activities are recorded as “cost of revenues – energy, hosting and other”. Depreciation on mining equipment is recorded as a component of “cost of revenues – depreciation and amortization”.

From May 2021 until April 30, 2022, the Company operated a mining pool that included certain third parties. ASC 606-10-55-39 provides indicators as to whether the entity controls the specified goods or services and lists three criterial factors that are indicative of control, including (a) is the Company a primary responsible party, (b) does the reporting entity have inventory risk and (c) does the reporting entity have discretion in establishing prices.

The Company evaluated each of these criteria and determined that in its capacity as a pool operator, it lacked the characteristics that are indicative of control. The Company determined that it was not a primary responsible party in its capacity as a pool operator since the Company did not have control over any third party contributing hashrate to its pool. It merely facilitated the contribution of hash rate by third party pool participants who could choose to join or leave a pool as they wished. The Company also determined that given the nature of BTC transaction verification services, it had no inventory risk. Finally, given that transaction fees are specified in each transaction request and that block rewards occur at a specified rate, the Company concluded that it had no discretion in establishing prices. As a result, the Company determined that it acted as an agent, and not as a principal in its capacity as a pool operator. The Company recognized pool fees generated by such pool as fee revenue and not mining revenue during the period in question and these fees were not material to its overall revenue. As of April 30, 2022, third-party miners were no longer participating in the Company’s mining pool. As such, the Company will no longer recognize pool fee revenue.

In connection with responding to the Staff’s comments, the Company acknowledges that (i) it is responsible for the adequacy and accuracy of the disclosure in its filing; (ii) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and (iii) it may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope you find that these responses adequately address the Staff’s questions, but please contact the undersigned at hugh@mara.com or our counsel, Jolie Kahn, Esq., at joliekahnlaw@sbcglobal.net, if you have any further questions or would like to discuss our responses.

Cc: Jolie Kahn, Esq.