SecProbe.io

January 24, 2024

VIA EDGAR
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attention:
Ms. Sandra Hunter Berkheimer
Ms. Sonia Bednarowski
Ms. Kate Tillan
Ms. Bonnie Baynes

Re: CleanSpark, Inc.
Form 10 -K for the Fiscal Year Ended September 30, 2023
Filed December 1, 2023
File No. 001 -39187
Dear Ms. Tillan and Ms. Bednarowski:
This letter is being furnished on behalf of CleanSpark, Inc. (the “ Company ,” “we” or “ us”) in response to
the comment received from the staff of the Division of Corporation Finance Office of Crypto Assets (the
“Staff ”) of the U.S. Securities and Exchange Commission (the “ Commission ”) by letter dated December
18, 2023, regarding the Company’s Form 10- K for the Fiscal Year Ended September 30, 2023 (the “ 10-K ”)
(File No. 000-39187) filed on December 1, 2023.

The text of the Staff’s comment has been included in bold and italics for your convenience, and we have
numbered the paragraph below to correspond to the number in the Staff’s letter. For your convenience, we
have also set forth the Company’s response immediately below the numbered comment.

Form 10 -K for the fiscal year ended September 30, 2023
General
1.
Refer to your response to comment 5 of our March 31, 2023 comment letter. In future filings, please disclose whether the mining pools provide services only for bitcoin mining or if they are multi- crypto
asset mining pools. Please also disclose the fees associated with participating in the mining pool.

 ***Copyrighted Material Omitted***

Response: The Company acknowledges the Staff's comment. The
Foundry USA Pool in which CleanSpark participates does not provide
services (i.e., hash computations, computing power) for mining any
cryptocurrencies other than bitcoin and bitcoin cash.
Foundry charges the Company fees for its services and such fees are
dependent on the hashrate that the Company are provided to the pool.
The fees charged by Foundry to the Company have historically varied
from 0.15% -0.19% and are based on the Company's pre vious quarter's
hashrate. The Company anticipates a rate of 0.15% for periods subsequent to the date of this letter. The Company will disclose in future
filings commencing with the quarterly report on Form 10- Q for the
period ended December 31, 2023, that the Foundry USA pool, to which
Company contributes its

computer power, only provides service for bitcoin mining. The Company will also disclose within its management discussion and analysis the fees
charged by the mining pool operator.

2.
Refer to your response to comment 6 of our February 6, 2023 comment letter. In future filings, please
disclose whether you hold any other types of crypto assets. If so, please identify the types and amount
of such crypto assets, and discuss the purpose of holding the other types of crypto assets.

Response: The Company acknowledges the Staff’s comment and will
disclose in future filings commencing with the quarterly report on Form
10-Q for the period ended December 31, 2023 whether it holds any other
types of crypto assets. The Company will also rei terate that it is the
Company’s strategy to solely hold or transact in bitcoin.

3.
In future filings, in your breakeven analysis comparing the cost to earn or mine one bitcoin with the
value of one bitcoin, please include equipment costs in a separate row to the table or tell us why this
information is not relevant.

Response: The Company acknowledges the Staff's comment. The Company does not include equipment costs (depreciation expense) in the
breakeven analysis, which compares the cost to earn or mine one bitcoin
with the value of one bitcoin. Depreciation is not co mparable because of
the timing of depreciation lives across miners so it is not typically
considered in the cost to mine a bitcoin. Further, management, in
analyzing its operating results, does not consider depreciation expense to
be an incremental cost as sociated with the mining activity. This
conclusion is supported by the Company's presentation in the consolidated statements of operations and comprehensive loss which
separately includes a line for depreciation and amortization. The
Company further clarif ies this approach by denoting that depreciation
and amortization is excluded from cost of revenues. Also, the Company
will modify the disclosure in the management discussion and analysis to

expressly indicate that the cost to mine one bitcoin, excludes
depreciation expense for its miners.

Financial Statements
Consolidated Statements of Cash Flows, page F- 11

4.
We acknowledge your response to comment 8. Please note that we are continuing to review your
response.

Response: The Company acknowledges the Staff’s comment.

Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-14
5.
In response to comment 5, you refer to Exhibit A and the updated Foundry USA Pool Terms and Conditions as of August 28, 2023. We note that this exhibit was not included with your response.
Please file the exhibit on EDGAR as correspondence.

Response: The Company acknowledges the Staff’s comment and has attached the Foundry USA Pool Terms and Conditions as an exhibit to this correspondence, as file on EDGAR.

6.
We acknowledge your responses to comments 5 and 6. Please respond to the following and revise your disclosure in future filings to specifically address the following concerning your mining revenue
recognition under ASC 606

2

•
In your response you told us that each 24 -hour period is a contract day, which begins at 00:00:00
UTC and ends at 23:59:59 UTC. You also disclose that your contracts are terminable at any time by either party and you told us that there are no penalties for either party in case of termination. Tell
us your consideration for the guidance in Examples 1 and 2 of Question 7 and of Question 8 to the FASB Revenue Recognition Implementation Q&As and whether the mining pool agreement is
continuously renewed and the duration of your contracts is less than 24 hours.

Response: We acknowledge the Staff’s comment. As
contracts are terminable at any time without penalty, the
contract term is shorter than a 24 hour period and is
continuously renewed. As the contract payout is non- cash,
the non- cash consideration should be measured at contract
inception which would occur throughout the day. We consistently utilize the daily closing bitcoin price for
recording revenue, and we measured the impact of the
recording revenue under both the average bitcoin price and
opening bitcoin price and determined impact to bitcoin
mining revenue as compared to the daily closing price was less than 0.5% of total bitcoin mining revenue during each period. We will revise our disclosure to state that contracts
are shorter than 24 hours in future f ilings.

•
Disclose, similar to  your response, that the contracts are terminable at any time by either party
without compensation or penalty to the other party for such termination.

Response: In future filings commencing with the December
31, 2023 quarterly filing, we will disclose the following “The
contract with our mining pool operator is terminable at any
time by either party. There are no penalties for contract
termination by eit her party.”

•
Assuming you conclude that your contracts are continually renewed, tell us whether the rate of
payment remains the same upon renewal and whether your customer’s option to renew represents a
material right that results in a separate performance obligation as contemplated in ASC 606 -10-55-
42.

Response: Based upon the customer’s terms of service, the
calculation to determine rewards remains the same during
each contract renewal. This would indicate the rate of
payment remains the same as it is based on the calculation in
the contractual agreemen t. The option to renew does not
represent a material right that results in a separate
performance obligation as contemplated in ASC 606- 10-55-
42 as the pricing in the renewal periods is the same as the
initial contract, there are no upfront or incremental fees in the
initial contract or the terms, conditions, and compensation amounts for the renewal options are at the market rates.

•
You told us that you are precisely aware of the computing power (measured in hashrate) contributed
to the pool operator at any time during the contract period and at any point in time during the
contract period you could calculate the daily pay -per-share earnings (step 1 of the Foundry USA
Pool's Payout). As such, tell us why the block reward portion of the consideration cannot be
reasonably estimated and is fully constrained. In this regard, it appears for FPPS contracts that the
only variable at contract inception is the number of hashes you will perform, which is wholly in your
control and would appear to be reasonably estimable.

Response: Although we are able to determine the computing power contributed to the pool operator at any time during the
contract period, to calculate the block reward, we would
require the network difficulty and the transaction fees that
will be earned by the network. Based on historical data, we
are able to make an estimate throughout the day; however, as
the variability

3

is resolved by the following day, we record the actual revenue
earned. In future filings, we plan to remove any statements
related to uncertainty that revenue is fully constrained until
received.

•
You told us that your performance obligation is to provide computing power services (in the form of
hashrate). Tell us your consideration of disclosing your one performance obligation as a service to
perform hash computations for the mining pool operator, or something similar, to align with the
promise under your agreement.

Response: We have a single performance obligation in
providing hash computations (i.e., hashing/computing
power) to the mining pool operator (i.e., customer). The
performance obligation of computing power services is
fulfilled daily over -time, as opposed t o a point in time, as we
provide hashrate throughout the day and the customer
simultaneously obtains control of it and uses the asset to
produce bitcoin. Our customer’s payout methodology is
based on daily hashrate provided, which is converted into
shares per day prior to being used in the full -pay-per-share
model. While our miners do perform hash computations as
part of their operations, we believe our performance
obligation is based on the speed at which we perform hash
computations.

•
Disclose, similar to your response, that your agreement utilizes the Full Pay Per Share (FPPS) payout
method and summarize the nature of each component of your consideration (i.e., network block
subsidies, network transaction fees, and pool operating fees) . It should be clear from the disclosure
whether the amounts are calculated based on expected or actual amounts. For example, we note from
the agreement that network block subsidies are based on the total amount of block subsidies that are
expected to be g enerated on the bitcoin network as a whole during the 24 -hour period beginning at
midnight UTC daily (i.e., the measurement period), regardless of whether the mining pool operator
successfully records a block to the blockchain, while network transaction fe es are based on the total
amount of transaction fees and block rewards that are actually generated on the blockchain network
as a whole during the measurement period.

Response: In future filings commencing with the December
31, 2023 quarterly filing, the Company plans to disclose the
following: “The Company earns revenue based on the Full -
Pay-Per-Share (“FPPS”) payout method, set forth by our
customer. The calculation has specific components which
include network block subsidies, network difficulty, network
transaction fees, and pool operating fe es. The network block
subsidy consists of newly generated coins and comprises the largest share of the block reward. Network di fficulty is the
difficulty required to mine a block on the Bitcoin network,
which a component in the calculation for payout. Network
transaction fees consist of fees paid by the users of the
network for the execution of transactions that are included in
the block. Pool operating fees are fees charged by the mining
pool operator in order to operate the pool. Network block

subsidies are based on the total amount of block subsidies
that are expected to be generated on the bitcoin network as a
whole during the 24- hour period beginning at midnight UTC
daily, regardless of whether the mining pool operator successfully records a block to the blockchain. Network
difficulty is based on the actual difficulty to mine a block on the Bitcoin network. Network transaction fees are based on
the total amount of transaction fees and block rewards that
are actually generated on the blockchain network as a whole
during the 24 -hour period. Pool operating fees are
determined by a fee rate set forth in the customer’s terms of service as a percentage of the actual daily FPPS payout .”

4

•
Tell us your consideration of clarifying in your disclosure, if true, that for each contract, you measure
the noncash consideration using the end of the day bitcoin spot price on the date of contract inception
and recognize the noncash consideration on the  same day that control of the contracted service
transfers to the mining pool operator (i.e., the customer), which is the same day as contract inception.

Response: In future filings, we will clarify that we measure
the noncash consideration (i.e., bitcoin) using the end of the
day spot price based on the date where computing power was
provided. Although this price may be different from contract
inception price, which would occur throughout the day, we have determined the change in price would not result in a
material difference as denoted in bullet one. In future filings
commencing with the quarterly report on Form 10- Q for the
period ended December 31, 2023, we will revise our disclosure to clarify that end of day spot price is not materially different from using the price at the inception of
each contract.

Bitcoin, page F -17
7.
We acknowledge your response to comment 10 and your disclosure on page F -17. As noted in your
response, the definition of a current asset in the FASB Master Glossary refers to a reasonable expectation of realization. Your response and disclosure refer to y our intent. Please revise your
disclosure in future filings to state, if true, that your bitcoin holdings are reasonably expected to be realized in cash or sold or consumed during the normal operation cycle of your business.

Response: In the Company's future filings, the Company will enhance its disclosure in the Summary of Significant Accounting policies regarding
the classification of bitcoin as a current asset to state that bitcoin holdings
are reasonably expected to be rea lized in cash or sold or consumed during
the normal operating cycle of the Company.

8.

We acknowledge your response to comment 11. You told us that you perform the impairment analysis
of bitcoin at the end of each reporting period through a "look- back" based on the bitcoin held at each
reporting period end to determine any impairment based o n the lowest intraday price during the
reporting period. It appears that you adopted this policy after December 31, 2022. Prior to January
1, 2023, you based your quarterly impairment analysis on the lowest daily closing price. Please
address the following :
•
We note that ASC 350- 30-35-19 states that if the carrying amount exceeds fair value then the entity
shall recognize an impairment loss equal to that excess. Also, per ASC 350 -30-35-18, the test is
annually and more frequently if events or changes in circum stances indicate that it is more likely
than not that the asset is impaired. Tell us why you believe that anytime the market price is below carrying value is not an event or circumstance that indicates it is more likely than not that t