Company: BTBT
Filing Date: 2025-07-03
Form Type: S-8 POS
Source: 0001213900-25-061371
Chunk: 61

Company: Bit Digital, Inc
Filing Date: 2025-07-03
Form: S-8 POS
Chunk 61
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The Company’s reliance on a third-party mining pool service provider for our mining revenue payouts may have a negative impact on the Company’s operations.

We use third–party mining pools to receive
our mining rewards from the network. Mining pools allow miners to combine their processing power, increasing their chances of solving
a block and getting paid by the network. The rewards are distributed by the pool operator, proportionally to our contribution to the pool’s
overall mining power, used to generate each block. Should the pool operator’s system suffer downtime due to a cyberattack, software
malfunction or other similar issues, it will negatively impact our ability to mine and receive revenue. Furthermore, we are dependent
on the accuracy of the mining pool operator’s record keeping to accurately record the total processing power provided to the pool
for a given bitcoin mining application in order to assess the proportion of that total processing power we provided. While we have internal
methods of tracking both our power provided and the total used by the pool, the mining pool operator uses its own record-keeping to determine
our proportion of a given reward. We 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