SecProbe.io

CORRESP
1
filename1.htm

Athena Bitcoin Global

800 NW 7th Avenue,

Miami, Florida 33136

January 12, 2024

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Finance

100 F Street, N.E.

Washington, D.C. 20549

    Attention:
    Rolf Sundwall, Staff Accountant (202) 551-3105

    David Irving, Staff Accountant (202) 551-3321

    Irene Paik, Staff Attorney (202) 551-6553

    Sandra Hunter Berkheimer at (202) 551-3758

    Re:
    Athena Bitcoin Global

    Registration Statement on Form S-1 Filed February 10, 2022

    Amendment No. 1 to Registration Statement on Form S-1 Filed March
    17, 2022

    Amendment No. 2 to Registration Statement on Form S-1 Filed May
16, 2022

    Amendment No. 3 to Registration Statement on Form S-1 Filed June
24, 2022

    Amendment No. 4 to Registration Statement on Form S-1 Filed November 13, 2023

    File No. 333-262629

Dear Ms. Paik:

Athena Bitcoin Global (the
“Company”) confirms receipt of the letter dated December 14, 2023, from the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) with respect to the above-referenced filings. We are
responding to the Staff’s comments in this letter and are contemporaneously filing Amendment No. 5 to Registration Statement on
Form S-1 (the “Amendment”). The Staff’s comments are set forth below, followed by the Company’s response:

Amendment No. 4 to Registration Statement on Form S-1 filed
November 13, 2023

General

 1. Provide disclosure of any significant crypto asset market developments material to understanding or
                                                                             assessing your business, financial condition and results of operations, or share price, including any material impact from the price
                                                                             volatility of crypto assets. In addition, to the extent material, discuss how the bankruptcies of major crypto asset market
                                                                             participants and the downstream effects of those bankruptcies have impacted or may impact your business, financial condition,
                                                                             customers, and counterparties, either directly or indirectly. Clarify whether you have material assets that may not be recovered
                                                                             because of the bankruptcies or may otherwise be lost or misappropriated.

RESPONSE:

In response to the Staff’s
comments, please note that the Company has not been directly impacted by any crypto asset market developments related to bankruptcies.
The Company has not entered into any relationships with any of the companies in the crypto economy that experienced significant negative
events. This includes FTX, Blockfi, Celsius and Voyager. The Company’s risk related to volatility of crypto prices is negated by
the nature of the Company’s operations. The Company holds onto crypto assets primarily to fund its Athena Bitcoin, Athena Plus and
White-Label service offerings. These crypto assets are held by the Company for less than ten days, which limits our exposure to price
fluctuations of crypto assets. We have not experienced a direct material impact from the price volatility of crypto assets. However, we
have disclosed risks regarding the volatility of the price and its potential impacts on the Company.

    United States Securities and Exchange Commission

January 12, 2024

Page 2

The Company is directly impacted
by the broader macro-economic climate related to crypto assets. Negative events, such as the FTX bankruptcy and significant fluctuations
of crypto asset prices could erode investor confidence in crypto assets. This could result in a reduction of demand of crypto assets.

The Company has also disclosed
the impacts of Terra LUNA and Stablecoins as a risk in the Amendment. Please see our disclosure under the Company’s Risk
Factors on page 31 and of the Amendment. We have also set forth below the above referenced risk factors. In addition, we have
added a new risk factor addressing specifically the Staff’s comment regarding the impact of bankruptcies on the
Company’s operations. See pages 16 and 18 of the Amendment and below.

The
prices of Bitcoin and other crypto assets are volatile.

We
generate substantially all our revenue from the sale of crypto assets to our customers, either using our Bitcoin ATMs or over the phone.
Revenue is based on the prices that we charge our customers based on prevailing market prices. The price at which we are able to purchase
crypto assets prior to selling those same crypto assets may not be lower than the sale price if the market conditions change between
those two points in time. Purchasing Bitcoin or other crypto assets for prices higher than they can be later sold could result in an
impairment of the asset value and our operating results could be adversely affected. The value of the entirety of our crypto assets held
could be lost if the prices of those crypto assets were to significantly decrease, which would adversely affect our operating results.
There are no assurances that the crypto assets we hold will have value from one day to the next and we could suffer a loss if any of
the prices of those crypto assets declines or is permanently depressed.

As
discussed in our financial statements included in this prospectus, we account for our crypto assets as indefinite-lived intangible assets,
which are subject to impairment losses if the fair value of our crypto assets decreased below their carrying value. As of December 31,
2022, management’s estimate of the effect on fair values due to a +/- 20% uniform change in the market prices of all crypto assets,
with all other variables held constant, was +/- $73.0 thousand (December 31, 2021: +/- 168.4 thousand). As of September 30, 2023, management’s
estimate of the effect on fair values due to a +/- 20% uniform change in the market prices of all crypto assets, with all other variables
held constant was +/- $60.6 thousand.

Bankruptcies
of major crypto asset market participants have impacted the broader crypto economy

The
failure of several prominent crypto trading venues and lending platforms, such as FTX, Celsius Networks and Voyager has impacted and
may continue to impact the broader cryptoeconomy. The full extent of these impacts may not yet be known. Impacts include, but are not
limited to, the consequent and ongoing financial distress and bankruptcy of certain crypto market participants, loss of confidence in
the broader cryptoeconomy, reputational harm to crypto asset platforms generally, increased negative publicity of the broader cryptoeconomy,
heightened scrutiny by regulators and lawmakers and calls for increased regulation of crypto assets and crypto asset platforms. We have
had no material direct impact to our business, financial condition, customers or counterparties from these bankruptcies; however, these
bankruptcies did cause a change to crypto market prices, crypto market volatility and customer sentiment, and each of these drivers do
indirectly impact our business and our revenue potential. We do not have any known material financial exposure to other cryptoeconomy
participants that faced insolvency and liquidity issues, experienced excessive redemptions or suspended redemptions or withdrawals of
crypto assets, allegedly mishandled customer funds, or experienced significant corporate compliance failures in connection with these
bankruptcies.

    United States Securities and Exchange Commission

January 12, 2024

Page 3

Stable
Coins may not have any intrinsic value.

Tether,
USD Coin, Dai and TrueUSD are examples of Stablecoins. Stablecoins are crypto assets designed to have a stable value over time as
compared to typically volatile crypto assets and are typically marketed as being pegged to a fiat currency, most commonly the U.S.
dollar, at a rate of 1:1. Stable coins make up an estimated 11% of the total market cap of crypto assets. The largest stable coin is
Tether, which is the third largest crypto asset by market cap at 83.3 billion USD per Coinmarketcap.com as of September 30, 2023.
The Company sells Tether as part of its Athena Plus services. Some have argued that some stable coins, particularly Tether, are
improperly issued without sufficient backing, and have also argued that those associated with certain stable coins may be involved
in laundering money. On February 17, 2021, the New York Attorney General entered an agreement with Tether’s operators,
requiring them to cease any further trading activity with New York persons and pay $18.5 million in penalties for false and
misleading statements made regarding the assets backing Tether. Terra LUNA, another stable coin, collapsed in May 2022 due to issues
with its algorithm, resulting in the stable coin losing all value. This sent shockwaves through the crypto market, with the total
market cap of crypto assets decreasing by approximately 22% during May 2022. Volatility in stable coins, operational issues with
stable coins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support
stable coins, or regulatory concerns about stable coin issuers or intermediaries, such as crypto asset spot markets, that support
stable coins, could have a significant impact on the global crypto market. This could reduce the market price of all of the crypto
assets that the Company utilizes in its operations, impact any individual’s willingness to purchase Tether from the Company
and may adversely affect the Company’s operating results and value of the Company’s shares of common stock.

 2. If material to an understanding of your business, describe any
direct or indirect exposures to other counterparties, customers, custodians, or other participants in crypto asset markets known to:

 · Have filed for bankruptcy, been decreed insolvent or bankrupt, made any assignment for the benefit of creditors, or have had a receiver
appointed for them.

 · Have experienced excessive redemptions or suspended redemptions or withdrawals of crypto assets.

 · Have the crypto assets of their customers unaccounted for.

 · Have experienced material corporate compliance failures.

RESPONSE:

In response to Staffs comments, please
note that the Company believes that it is not applicable to our business. We did not have any direct or indirect exposures to other counterparties,
customers, custodians, or other participants in crypto asset markets that meet any of the criteria listed above.

 3. If material to an understanding of your business, discuss any
steps you take to safeguard your, your affiliates' or your customers’ crypto assets and describe any policies and procedures that
are in place to prevent self-dealing and other potential conflicts of interest.

Describe any policies and procedures you have regarding
the commingling of assets, including customer assets, your assets, and those of affiliates or others. Identify what material changes,
if any, have been made to your processes in light of crypto asset market disruptions.

RESPONSE:

In response to the Staff’s
comments, please note that the Company engages in significant transaction volume of crypto assets. While the Company does not hold
material amounts of crypto assets for longer than two (2) days after the original acquisition date, it is important for the business
to have sufficient steps to safeguard our crypto assets and our customer’s crypto assets, as applicable. The Company's hot
wallet is secured with authentication protocols and passwords that are accessible to a limited number of employees, the Company has
cryptocurrency security practices in place and all transactions conducted on the wallet are done through a multi-step approval
process with tracking.

The Company only maintains an immaterial
amount of customer crypto assets for a revenue stream (Bitquick) that the Company no longer offers to customers.

The Company has included additional
risk disclosures in the Amendment (see page 25) and as set forth below.

    United States Securities and Exchange Commission

January 12, 2024

Page 4

Our
failure to safeguard and manage the customer’s crypto assets could adversely impact our business, operating results, and financial
condition.

The Company acts as a custodian
for certain customer’s crypto assets, which includes having access to and managing cryptographic private keys. The Company
defines this process as “safeguarding.” As of September 30, 2023, we were responsible for safeguarding $45,000 in crypto
assets, all in the form of Bitcoin. Those Bitcoin are not insured or guaranteed by any government or government agency. Our ability
to manage and accurately safeguard these user assets requires a high level of internal controls, including use of authentication
protocols, passwords and multi-step approval processes. As our business continues to grow and we expand our product and service
offerings, we must continue to strengthen our associated internal controls. Our success and the success of our offerings requires
significant public confidence in our ability to properly manage security. The Company is not the legal owner of these crypto assets.
However, because we safeguard cryptographic key information such cryptographic key information may be considered to be the property
of a bankruptcy estate, in the event of a bankruptcy, the users may not be able to access their crypto assets. This may result in
customers finding our services riskier and less attractive and any failure to increase our customer base, discontinuation or
reduction in use of our platform and products by existing customers as a result could adversely impact our business, operating
results, and financial condition. If we do not successfully manage the security needs associated with safeguarding such crypto
assets for users, then such a loss could cause a substantial business disruption of our operations, adverse reputational impact,
inability to compete with our competitors, regulatory scrutiny, and consequently, it could adversely impact an investment in our
shares of common stock.

The
theft, loss, or destruction of private keys required to access any Bitcoin may be irreversible. If we are unable to access our private
keys or if we experience a hack or other data loss relating to our ability to access any Bitcoin, it could cause regulatory scrutiny,
reputational harm, and other losses.

Bitcoin
is generally accessible only by the possessor of the unique private key relating to the digital wallet in which the Bitcoin is held.
While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded
and kept private to prevent a third party from accessing the Bitcoin held in the applicable wallet. To the extent that any of the private
keys relating to our wallets containing Bitcoin held for our own account or our users’ private keys relating to their un-hosted
wallets is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we or our users
will be unable to access the Bitcoin held in the related wallet. Further, we cannot provide assurance that our or our users’ wallets
will not be hacked or otherwise compromised. Cryptocurrency and blockchain technologies have been, and may in the future be, subject
to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or any hack or other compromise of,
digital wallets used to store our users’ Bitcoin could adversely affect our users’ ability to access or sell their Bitcoin,
as well as result in loss of user trust in us. As such, any loss of private keys due to a hack, employee or service provider misconduct
or error, or other comp