Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 491

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 491
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, prospects or operations
and harm investors.

Although we have developed
systems and processes designed to protect the data we manage, prevent data loss and other security breaches, effectively respond to known
and potential risks, and expect to continue to expend significant resources to bolster these protections, there can be no assurance that
these security measures will provide absolute security or prevent breaches or attacks. We have experienced from time to time, and may
experience in the future, breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities,
or other irregularities. Unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our
systems and facilities, as well as those of our customers, partners, and third-party service providers, through various means, including
hacking, social engineering, phishing, and attempting to fraudulently induce individuals (including employees, service providers, and
our customers) into disclosing usernames, passwords, payment card information, or other sensitive information, which may, in turn, be
used to access our information technology systems and our digital assets. Threats can come from a variety of sources, including criminal
hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. Certain threat actors may be supported by significant
financial and technological resources, making them even more sophisticated and difficult to detect. As a result, our costs and the resources
we devote to protecting against these advanced threats and their consequences may continue to increase over time.

We may suffer significant and adverse
effects due to hacking or one or more adverse software events.

In order to minimize
risk, we have established processes to manage wallets that are associated with our digital assets holdings. There can be no assurances
that any processes we have adopted or will adopt in the future are or will be secure or effective, and we would suffer significant and
immediate adverse effects if we suffered a loss of our digital assets due to an adverse software or cybersecurity event. We utilize several
layers of threat reduction techniques, including: (i) the use of hardware wallets to store sensitive private key information; (ii) performance
of transactions offline; and (iii) offline generation storage and use of private keys.

39

The Company is evaluating
several third-party custodian wallet alternatives, but there can be no assurance that such services will be more secure than those the
Company presently employs. Human error and the constantly evolving state of cybercrime and hacking techniques may render present security