Company: BTBT
Filing Date: 2025-07-03
Form Type: S-8 POS
Source: 0001213900-25-061371
Chunk: 71

Company: Bit Digital, Inc
Filing Date: 2025-07-03
Form: S-8 POS
Chunk 71
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 the PoS Beacon Chain (the “Merge”),
the Company is deploying Ethereum (ETH) to the beacon chain with a view to earning an ETH-denominated return thereon. On April 12, 2023,
Ethereum’s Shanghai hard fork, also referred to as “Shapella,” has been finalized, enabling withdrawals for users who
have “staked” their ETH to secure and validate transactions on the blockchain.

In addition, by running a validator node, the
Company will be exposed to the risk of loss of its staked digital assets if it equivocates or fails to operate the node in accordance
with applicable protocol rules, as the Company’s digital assets may be “slashed” or inactivity penalties may be applied
if the validator node “double signs” or is offline for a prescribed period of time. Disputes on a liquid staking provider
may lead to the value of staking assets diverging from ETH or failure to exit the liquid staking position. The Company intends to mitigate
this risk by utilizing experienced service providers such as Figment for native staking and by carefully monitoring the staking activities
performed by the Company in reliance on such services.

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Risks under the Federal securities laws associated with Staking

The Merge and the switch from PoW to PoS did not
change our characterization of ETH as a digital asset. We intend to hold our staked ETH for our own account. In the event we exchange
ETH for other digital assets (such as liquid staking tokens) which may be deemed to be securities, it would be for our own account. In
all instances, we will perform a risk-based analysis to evaluate whether the digital asset may be deemed to be a “security”
under the Federal securities laws prior to mining the digital asset. We do not believe if we hold for our own account a particular digital
asset which may be deemed to be a security, it will be a risk to our business operations. Nevertheless, we will continue to implement
a compliance infrastructure to ensure full compliance with the federal securities laws. In the event our staking program is found to not
be in compliance with the federal securities laws, we could face legal or regulatory consequences. We would also need to undertake a regulatory
review to ensure compliance with the Federal securities laws if and when we decide to offer staking-as-a-service for value to individuals.
The Company would need to install a fully compliant organic infrastructure or hire third-party