Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 528

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 528
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ment of the
Infrastructure Investment and Jobs Act of 2021 (the “Infrastructure Act”) may have an adverse impact on our business and financial
condition.

On November 15, 2021,
President Joseph R. Biden signed the Infrastructure Act. Section 80603 of the Infrastructure Act modifies and amends the Internal Revenue
Code of 1986 (the “Code”) by requiring brokers of digital asset transactions to report their customers to the IRS. This provision
was included to enforce the taxability of digital asset transactions. Section 80603 defines “broker” as “any person
who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another
person.” That could potentially include miners, validators, and developers of decentralized applications. These functions play a
critical role in our business and in the functioning of the blockchain ecosystem. Importantly, these functions have no way of identifying
their anonymous users. Indeed, bitcoin’s blockchain was designed for anonymity.

This reporting requirement
took effect on January 1, 2023, and the implementation of these requirements is ongoing. The Company is closely monitoring the situation
and waiting for more issuance of updated guidance from government agencies. The Company deems that it doesn’t qualify as “broker”
under section 80603 and therefore it is not required to report its customers to the IRS under such provision. Disclosing the identity
of our bitcoin mining operations and associated accounts to ensure they can be taxed by the IRS could cause a significant devaluing of
our business, the bitcoin currency, and the entire digital assets market. Additionally, noncompliance with this provision could lead to
significant fines and or regulatory actions against our company.

Risks related to
material pending crypto legislation or regulations

On the federal level,
by certain accounts, more than 100 bills were introduced in Congress to regulate cryptocurrency and digital assets. Except as described
in other specific risk factors set forth herein, we do not believe that material pending crypto legislation or regulations would have
a material effect on our business, financial condition and results of operations. Certain of the material pending bills are as follows:

●Digital
Commodity Exchange Act of 2022 (DCEA), introduced on April 28, 2022 in the House of Representatives, would create a regulatory overview
for digital commodity developers, dealers and exchanges, none of which would currently apply to the Company;

●Securities
Clarity Act, introduced on July 16, 2021 in the