Company: BTBT
Filing Date: 2025-07-02
Form Type: S-8
Source: 0001213900-25-061020
Chunk: 61

Company: Bit Digital, Inc
Filing Date: 2025-07-02
Form: S-8
Chunk 61
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 have little means of recourse against the mining pool operator if we determine the proportion of
the reward paid out to us by the mining pool operator is incorrect, other than leaving the pool. If we are unable to consistently obtain
accurate proportionate rewards from our mining pool operators, we may experience reduced reward for our efforts, which would have an adverse
effect on our business and operations.

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The limited rights of legal recourse available to us and our lack of insurance protection for risk of loss of our digital assets exposes us and our shareholders to the risk of loss of our digital assets for which no person may ultimately be held liable and we may not be able to recover our losses.

The digital assets held by us are not insured.
Further, banking institutions will not accept our digital assets and they are therefore not insured by the Federal Deposit Insurance Corporation
(“FDIC”) or the Securities Investor Protection Corporation (“SIPC”). Therefore, a loss may be suffered with respect
to our digital assets which is not covered by insurance and we may not be able to recover any of our carried value in these digital assets
if they are lost or stolen or suffer significant and sustained reduction in conversion spot price. If we are not otherwise able to recover
damages from a malicious actor in connection with these losses, our business and results of operations may suffer, which may have a material
negative impact on our share price.

Currently, we do not have any insurance to cover
our digital assets or mining equipment. The market for such insurance is in the early stages and we intend to purchase such insurance
in the future. One of our digital asset custodians, Cactus Custody, is self-insured for $4 million plus annual additions. Any uninsured
losses may have an adverse effect on our results of operations and/or financial condition. Fireblocks offers Fireblocks Institutional
Digital Asset Program which is insured by leading insurance companies which are A.M. Bests rated “A” (excellent). There is
an aggregate of $30,000,000 digital asset crime insurance for theft of digital assets, external breach of Fireblocks’ software or
any malicious or intentional misbehavior or fraud by employees. Fireblocks has $12,500,000 of aggregate insurance for errors and omissions;
professional liability insurance and cyber/privacy liability insurance.

Digital assets face significant scaling obstacles that can lead to high fees or slow transaction settlement times.

Digital assets face significant scaling obstacles
that can lead to high fees or slow transaction