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CORRESP
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filename1.htm

BTCS
Inc.

9466
Georgia Avenue #124

Silver
Spring, MD 20910

March
15, 2024

VIA
EDGAR

Securities
and Exchange Commission

Division
of Corporation Finance

Office
of Crypto Assets

 Re: BTCS
                                            Inc.

    Form
                                            10-K for the Fiscal Year Ended December 31, 2022

    Form
                                            10-Q for the Quarterly Period Ended September 30, 2023

    File
                                            No. 001-40792

Ladies
and Gentlemen:

This
letter is submitted by BTCS Inc. (the “Company” or “BTCS”) in response to the comment letter dated March 13,
2024 issued by the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the
“Commission”) with respect to the Company’s Form 10-K for the Fiscal Year Ended December 31, 2022 and the Form 10-Q
for the Quarterly Period Ended September 30, 2023.

For
your convenience, each of the Staff’s comments have been restated below in their entirety, with the Company’s responses set
forth immediately beneath such comment.

Annual
Report on Form 10-K for the Fiscal Year Ended December 31, 2022

Business

Our
Business, page 3

1. Refer
                                            to your response to prior comment 4. In future filings, please clarify what you mean by your
                                            disclosure on page 3 that “StakeSeeker’s Stake Hub is central to BTCS’s
                                            growth strategy, allowing users to delegate their crypto assets to the Company’s validator
                                            nodes” by disclosing how it is central to your growth strategy. Also, your response
                                            that StakeSeeker does not provide or facilitate crypto asset transactions, including the
                                            ability to delegate crypto assets to your validator nodes appears to be inconsistent with
                                            your disclosure on page 3 that StakeSeeker’s Stake Hub allows users to delegate their
                                            crypto assets to your validator nodes. We also note that your website describes StakeSeeker
                                            as a secure non-custodial staking-as-a-service platform. Please advise. Additionally, if
                                            StakeSeeker does not provide or facilitate direct, asset delegation or transaction execution
                                            on your platform, please disclose the actual means by which users delegate crypto assets
                                            to your validator nodes.

Response:

We
plan to include the following enhanced disclosure describing StakeSeeker, which we believe more explicitly clarifies its core features
and functionalities as a non-custodial and non-transactional monitoring dashboard, in our upcoming Form 10-K, as well as in future filings,
in consideration of the Staff’s comments:

“The
Company’s internally developed “StakeSeeker” platform is a personal finance software and education center with a comprehensive
crypto dashboard for crypto asset holders to connect, monitor, track, and analyze their crypto portfolios across exchanges and wallets
in a single analytics platform. The StakeSeeker dashboard reads user data from digital wallets and utilizes application programming interfaces
(APIs) to read data from crypto exchanges and is non-custodial, meaning it does not allow for the trading or custody of crypto assets.
StakeSeeker’s Stake Hub functions as an educational center, offering users guidance on how to delegate their crypto assets to our
non-custodial validator nodes, along with the ability to monitor such delegation activities through data analysis. StakeSeeker does not
provide or facilitate direct, crypto asset delegation through its StakeHub, nor does it facilitate transaction execution on our platform.
Stake Hub’s primary role is to offer instructional support and monitoring capabilities. Crypto asset holders are able to delegate
to our validator nodes without signing up for our StakeSeeker platform; conversely, crypto asset holders can delegate to validator nodes
not operated by the Company and utilize our StakeSeeker software and data analytics. The StakeSeeker platform is currently free-to-use
for registered users so is not currently generating revenue. The Company is not a broker-dealer or an investment advisor and does not
provide any such related services. StakeSeeker operates exclusively as an informational and educational resource for the monitoring and
analysis of crypto assets, with its non-custodial and non-transactional approach ensuring compliance with federal securities laws, thereby
precluding any regulatory concerns as the platform continues to develop.”

We
have removed the language cited in the Staff’s comment regarding StakeSeeker’s role in BTCS’s growth strategy, and
replaced it with the following language in our upcoming Form 10-K:

“StakeSeeker
provides a valuable analytical platform to crypto enthusiasts and strategically seeks to entice users with its features. One underlying
strategic objective of the platform is to drive the expansion of Delegators to our validator nodes. The growth of the size of delegations
is central to the scalability of BTCS’s StaaS business strategy.”

We
further elaborate StakeSeeker’s role in BTCS’s “Growth Strategy” in the same named section under Item 1 –
Business of our upcoming Form 10-K as follows:

“Growth
of Delegator Base and Assets: A critical component of our growth strategy is to increase the number of Delegators and crypto assets delegated
to our validator nodes including our own. We plan to achieve this by: 1) acquiring more crypto assets and staking them to our nodes,
and 2) enhancing the StakeSeeker platform’s capabilities as an educational center and analytical tool. We believe that leveraging
StakeSeeker’s capabilities to provide insights and guidance will foster trust and confidence among potential Delegators.”

In
our upcoming Form 10-K, we’ve refined our business description by distinctly separating ‘Staking-as-a-Service’ from
‘StakeSeeker.’ This distinction clarifies our validator node operations and differentiates them from the StakeSeeker monitoring
dashboard, emphasizing that these elements operate independently. Our validator nodes, central to our staking-as-a-service strategy,
allow for third-party crypto asset delegation as part of our broader blockchain infrastructure. Conversely, StakeSeeker serves primarily
as an informational and educational platform, offering insights into the asset delegation process. It provides guides to users on how
they may delegate crypto assets from their private wallets, highlighting that such actions occur outside the StakeSeeker platform.

We
believe that our disclosures regarding StakeSeeker and our staking-as-a-service operations effectively convey the non-custodial nature
of our business. Further, we believe that the information included on our Company website (www.btcs.com) as well as www.stakeseeker.com
is consistent with the information disclosed in our SEC filings, including Form 10-K.

2. Refer
                                            to your response to prior comment 5. In future filings, please disclose whether you hold
                                            the private keys in hot or cold storage, and disclose the percentage held in each.

Response:

We
plan to include the following enhanced disclosure around our custody procedures regarding our crypto assets in our upcoming Form 10-K,
as well as in future filings, in consideration of the Staff’s comments:

“BTCS
prioritizes self-custody of its crypto assets through secure storage of the majority of its crypto assets in cold digital wallets, with
the goal of typically maintaining less than 0.1% of its crypto assets on crypto exchanges at any given time, except during necessary
transfers between wallets and exchanges for sales or purchases. Occasionally, we may use hot wallets or move crypto assets to exchanges
for operational or transactional requirements. Additionally, we regularly transfer crypto assets to more secure cold wallets when possible.
As of December 31, 2023, [●]% of BTCS’s crypto assets were held in cold storage wallets and [●]% of crypto assets were
held in other storage wallets, including hot wallets.”

3. Refer
                                            to your response to prior comment 6. We note that you obtain the data used to calculate the
                                            Annual Percentage Reward (APR) from www.stakingrewards.com. In future filings, please disclose
                                            how you use the data to calculate the APR. In addition, please disclose how frequently you
                                            conduct periodic checks to validate the data used to calculate the APR.

Response:

We
plan to include the following enhanced disclosure in our upcoming Form 10-K, as well as in future filings, in consideration of the Staff’s
comments:

“The
estimated staking rewards, expressed as the Annual Percentage Reward (APR), as displayed on StakeSeeker’s Stake Hub and our StakeSeeker
website (www.stakeseeker.com), are determined using the most recent network data obtained through API data pulls from www.stakingrewards.com,
a third-party blockchain data provider. To ensure accuracy and consistency, BTCS conducts periodic checks to validate the APR data obtained
against the data reported on each respective blockchain network’s blockchain explorer. Disclosure on StakeSeeker’s website
clearly states that the APR presented is not guaranteed and does not include StakeSeeker’s validator fee. The APR figures are provided
for informational purposes and are subject to change based on the dynamics of the underlying blockchain networks.”

4. Refer
                                            to your response to prior comment 7. Please revise to describe your policies and procedures
                                            for ensuring that your business operations are in compliance with federal securities laws
                                            related to decisions to add functions and to add services and to determine the type and amount
                                            of crypto assets you hold.

Response:

We
refer you to our planned enhanced disclosure describing StakeSeeker that we have included in our response to Comment 1 above, which we
believe more explicitly clarifies its core functionalities in our upcoming Form 10-K, as well as in future filings, in consideration
of the Staff’s comments. Specifically, in consideration of the Staff’s comment 4, we highlight the following language excerpt
from the disclosure language:

“The
Company is not a broker-dealer or an investment advisor and does not provide any such related services. StakeSeeker operates exclusively
as an informational and educational resource for the monitoring and analysis of crypto assets, with its non-custodial and non-transactional
approach ensuring compliance with federal securities laws, thereby precluding any regulatory concerns as the platform continues to develop.”

We
believe that our disclosures effectively convey that StakeSeeker is a free-to-use dashboard designed exclusively for monitoring crypto
asset holdings and transactions. Therefore, the additional monitoring capabilities for crypto assets do not inherently raise compliance
concerns, irrespective of the regulatory classification of securities.

Separate
from StakeSeeker, we address, in multiple areas of our Form 10-K our risks, and considerations surrounding the crypto assets that we
hold being potentially considered securities pursuant to federal securities laws. Below we have included excerpts from one such example
of disclosures included in our Risk Factors in our upcoming Form 10-K:

“Because
crypto assets may be determined to be Digital Securities, we may inadvertently violate the 1940 Act and incur large losses as a result
and potentially be required to register as an investment company. This would have a material adverse effect on an investment in us.

“In
order to limit our acquisition of Digital Securities to stay within the 40% threshold, we will examine the manner in which a crypto asset
was initially marketed to determine if it may be deemed a Digital Security and subject to federal and state securities laws. Even if
we conclude that a particular crypto asset is not a security under the 1940 Act, certain states take a stricter view which means the
crypto asset may have violated applicable state securities laws.

Should
the total value of securities which we hold exceed more than 40% of our assets (exclusive of cash) SEC Rule 3a-2 under the 1940 Act allows
an issuer to prevent itself from being deemed an investment company if it reduces its holdings of securities to less than 40% of its
assets (exclusive of cash) and does not go above the 40% threshold more than once every three years. Accordingly, if changes in the classification
of crypto assets causes us to exceed the 40% threshold, we may experience large losses when we liquidate Digital Securities as a result
of continued volatility.

The
40% requirement may limit our ability to make certain investments or enter into joint ventures that could otherwise have a positive impact
on our earnings. In any event, we do not intend to become an investment company engaged in the business of investing and trading securities.

To
the extent that crypto assets held by us are deemed by the SEC or a state legislator to fall within the definition of a security, we
may be required to register and comply with additional regulation under the Investment Company Act, including additional periodic reporting
and disclosure standards and requirements and the registration of our Company as an investment company.”

Risk
Factors

Risks
Related to Crypto Assets, page 19

5. In
                                            future filings please include a separate risk factor specifically addressing the risks to
                                            your business if your staking program were determined to involve the offer and sale of securities.

Response:

We
plan to include the following new Risk Factor disclosure in our upcoming Form 10-K, as well as in future filings, in consideration of
the Staff’s comments:

If
the SEC concludes that our non-custodial staking business involves the offer and sale of a security in violation of Section 5 of the
Securities Act of 1933 and the courts conclude the SEC is correct, we will be required to cease our staking as a service business and
seek another business opportunity and may be subject to monetary and other penalties.

The
SEC has been successful in litigating against certain companies and individuals who have offered and sold various cryptocurrencies in
violation of the registration provisions of the Securities Act of 1933 (the “Securities Act”) and the anti-fraud provisions
of the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”). While we believe that our non-custodial
staking business does not involve the offer or sale of a security, we do not know if the SEC will agree or whether if we seek relief
from the courts, we will be successful. If we are also found to have offered and sold securities in violation of the Securities Act and
the Exchange Act, the SEC could sue us for acting as an unregistered dealer. Further, as discussed in the risk factor noted above, we
may inadvertently violate the 1940 Act.

Whether
we voluntarily cease our current business or litigate and lose, we would be required to find another business opportunity whether through
an acquisition or otherwise. We may also have to pay a civil