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United States securities and exchange commission logo
July 17, 2023
Shi Qiu
Chief Executive Officer
Mercurity Fintech Holding Inc.
1330 Avenue of the Americas, Fl 33
New York, NY 10019
Re:Mercurity Fintech Holding Inc.
Form 20-F for the fiscal year ended December 31, 2022
Filed April 25, 2023
File No. 001-36896
Dear Shi Qiu:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comments.  In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
            Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 20-F for the fiscal year ended December 31, 2023
Item 5. Operating and Financial Review and Prospects
D. Trend Information, page 70
1.Please provide us proposed revised disclosure for page 70 to be included in future filings
(including any potential amendment of this Form 20-F) to disclose the uncertainty and
related impact to the company, including quantification, of the pending legal proceedings
of intangible assets stored in out-of-control cold wallets, also referred to as the recovery
proceeding, on pages F-3, F-42 and F-55.  Also provide proposed revised disclosure for
your related disclosure on page 84 under "Legal Proceedings".
Item 15. Controls and Procedures, page 101
2.We note on page 101 that your management assessed your disclosure controls and
procedures (DCP), and your internal controls over financial reporting (ICFR), and
concluded that they are effective at December 31, 2022 with no changes in ICFR during

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2022.  We also note your risk factor disclosures on pages 6, 13 and 14: "Our former
officer and director, Wei Zhu, was in control of the Company’s cryptocurrency who had
physical control over the Company’s cold wallet. If we do not recover our cold wallet in a
timely and cost-efficient manner or at all, the Company may incur a significant loss of the
cryptocurrencies. The book value on December 31, 2022 of the Bitcoins and USD Coins
stored in the out-of-control wallets was $4,433,817."  We further note your risk factor on
page 9: "Wei Zhu, your former acting Chief Financial Officer, former Co-Chief Executive
Officer, and a former member and Co-Chairperson of the Board, and Minghao Li, a
former member of the Board, were suspected of certain criminal offenses."  Given that
during 2022, certain officers of your company that were in sole control and seemingly
physical custody of over almost all your digital assets at December 31, 2022, which
represent over 20% of your total assets, were criminally charged and those assets seized,
please tell us how you had effective ICFR and DCP if a single person had control over a
significant portion of your assets. In your response tell us your consideration of
segregation of duties and access to/control of company assets in your ICFR system.
Item 16F. Change in Registrant's Certifying Accountant, page 102
3.We note your disclosure on page 103 that you attached the change in auditor letter from
your prior auditor, Shanghai Perfect, dated April 25, 2023 as Exhibit 15.3, which appears
to be filed as Exhibit 15.2.  Please amend your filing for the following:
•Revise the title of the exhibit currently provided as Exhibit 15.2 to be the letter
identified as Exhibit 15.3 on page 103 and file it as that exhibit.
•Provide the Exhibit 15.2 auditor consent from your prior auditor regarding their
report on your December 31, 2021 and 2020 financial statements included in the
filing that are incorporated into your active registration statements on Forms S-8.

Consider not amending your 2022 Form 20-F until addressing all other comments in this
letter and those on your registration statement on Form F-1, File No. 333-272274.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 104
4.We note that during your fiscal year 2022 you were identified by the Commission
pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7214(i)(2)(A)) as having retained, for the preparation of the audit report on your financial
statements included in the Form 20-F, a registered public accounting firm that has a
branch or office that is located in a foreign jurisdiction and that the Public Company
Accounting Oversight Board had determined it is unable to inspect or investigate
completely because of a position taken by an authority in the foreign jurisdiction. Please
provide the documentation required by Item 16I(a) of Form 20-F or tell us why you are
not required to do so. Additionally, please amend your Form 20-F to provide the
disclosures required under Item 16I(b) of Form 20-F. Refer to the Staff Statement on the
Holding Foreign Companies Accountable Act and the Consolidated Appropriations Act,
2023, available on our website at https://www.sec.gov/corpfin/announcement/statement-

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hfcaa-040623.

Consolidated Statements of Cash Flows, page F-13
5.We note your disclosure on page F-20 that you decided to restate your cryptocurrency
cash flows from investing activities to operating activities based on your current and
future business structure.  Please provide us your accounting analysis, with references to
the authoritative literature, supporting your conclusion that this activity is properly
classified within cash flows from operating activities, instead of cash flows from investing
activities.  Ensure that each of your three revenue streams are discussed separately.
6.Please provide us proposed revised disclosure to be provided in future filings that
discloses your non-cash investing and financing activities as required by ASC 230-10-50-
3. Otherwise, tell us where you have made these disclosures. In this regard, we note, for
example, your equity issuances in 2021 for bitcoin and USD Coins as disclosed on page
F-47 and your equity issuance in 2022 for the acquisition of equipment as disclosed on
page F-48.
Note 3. Significant Accounting Policies
Intangible Assets, page F-29
7.We note your accounting policy for intangible assets on pages F-29 and 57 and
your disclosures that you restated to correct your prior year and current impairment
calculation for cryptocurrencies.  Please address the following:
•Revise your disclosure in future filings to clearly indicate that you classify your
cryptocurrencies as indefinite-lived intangible assets and that you carry them at cost
less impairment, not merely at cost.
•Confirm our understanding that, after your restatements as disclosed in Note 2, all
periods presented in your filing reflect cryptocurrency impairment based on the
lowest intraday price each day.
Revenue Recognition
Cryptocurrency Mining, page F-30
8.You disclose that you executed contracts with mining pool operators and with sharing
mining service to provide computing power or storage capacity to the mining pool. Please
provide us a detailed analysis, referencing the authoritative literature you rely upon, to
support your cryptocurrency mining revenue policy. In your response, specifically address
the following:
•Provide us with copies of the executed contracts with each mining pool operator and
sharing mining service.
•Tell us the method used under each contact to determine your share of pool rewards
and transaction fees for mining pools and sharing mining services.
•Tell us how you determine contract inception and contract duration for each contract.

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•Tell us how you determined that the provision of computing power or storage
capacity are the only performance obligations identified under each contract. Explain
how you provide computing power and storage capacity and how the mining pool
operator or sharing mining service provider uses that power or storage capacity.
Explain your consideration as to whether the provision of storage capacity is a lease
under ASC 842.
•As cryptocurrencies received under your contracts are non-cash consideration, tell us
how measuring the cryptocurrencies received at the fair value on the date received is
consistent with the guidance in ASC 606-10-32-21 to value that consideration at
contract inception.
•Tell us what market(s) you use to value the cryptocurrencies you are entitled to
receive for each individual cryptocurrency. Tell us whether this market is your
principal market, or in the absence of a principal market, the most advantageous
market under ASC 820-10-35-5. If so, tell us how you made the determination(s). If
not, tell us why not.
•Tell us what portions of the consideration you are due is variable, how you made
such determination and how you apply the variable consideration constraint under
ASC 606-10-32-11.
•Tell us how you account for any fees paid to the mining pool operator or sharing
mining service provider.
•Tell us when you are paid under each agreement and how you account for any
receivables denominated in cryptocurrencies.
•Tell us your consideration for your statement that there is no official guidance for the
accounting for digital assets. We observe that the FASB codification is the source of
authoritative generally accepted accounting principles, that there is codification
guidance whose scope applies to your transactions, and that you identify ASC 606 as
the guidance you follow for revenue recognition on page F-30.
•Tell us why the last paragraph of this section discusses your cryptocurrency mining
revenue in 2022 but does not address such revenue in 2021.
Consultation services, page F-31
9.We note your use of a percentage-of-completion method to record revenue under your
consulting agreements. We also note that your revenue recorded in 2022 relates to an
agreement to facilitate your customers' initial public offering. Please tell us the payment
terms of your agreement. Specifically tell us whether the customer is obligated to pay your
entire fee if the initial public offering is not completed for any reason. If not, tell us why
over time recognition is appropriate under ASC 606-10-25-27 through 25-29 or why your
fee is not considered variable and constrained under ASC 606-10-32-11.

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Technical services, page F-31
10.Provide us your analysis supporting your revenue recognition policy for technical
services. Differentiate between software development and other services. Reference for us
the authoritative literature you rely upon to support your policy. In your response, tell us
why the last paragraph of this section indicates that you had no technical services
revenues in 2022 but does not address such revenue in 2021 and 2020.
Share-based payments, page F-33
11.Please provide us proposed revised disclosure to be included in future filings that clarifies
how you recognize compensation for awards with market conditions. In this regard, we
note your statement that the market conditions are included in the determination of
estimated grant-date fair value but you do not indicate what compensation is recorded
whether or not the market condition is achieved.
Segment Reporting, page F-34
12.We note your disclosure of having only one reportable segment. Please provide us the
following:
•Tell us your consideration for expanding your one reportable segment given your
new business strategy and entry in the cryptocurrency mining industry.
•Provide us the entity wide revenue and asset information required by ASC 280-10-
50-40 through 50-42.
Recent Accounting Pronouncements, page F-35
13.We note your disclosure on page F-35 that you will take advantage of the extended
transition period in complying with new or revised financial accounting standards due to
your qualification as an emerging growth company ("EGC").  Please provide the
following information:
•Tell us your current filer status to clarify your disclosures on page F-35 and on page
31 that you ceased to be an EGC on December 31, 2020.
•Provide us any changes necessary to your recent accounting pronouncements
disclosures if you no longer are eligible to use the extended transition period.
•Please revise, if necessary, the cover page of your form F-1 filed May 30, 2023,
which indicates that you are an EGC.
14.Please provide us with a comprehensive accounting analysis addressing the impact of
Staff Accounting Bulletin (“SAB”) No. 121 on your financial statements. Ensure your
analysis addresses the applicability of the SAB to your business, your conclusion on
treatment, how the impacted items are reflected in the financial statements and identify the
specific line items including quantification of the amounts of the impact.  In your
response, clarify whether you hold, or engage other parties to hold on your behalf, any
cryptocurrency assets for any customers, third parties, related parties or entities that are
not included in the consolidated financial statements.

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Note 4. Concentration of Risk
Foreign currency exchange rate risk, page F-38
15.Please tell us what you mean by the impact of foreign currency exchange is "not obvious"
as indicated in the last sentence on page F-38.
Note 9. Intangible Assets, Net, page F-40
16.Please provide us the following to consistently quantify and describe your cryptocurrency
stored in your out-of-control cold wallets:
•Provide a reconciliation of the book value on December 31, 2022 of bitcoin and USD
Coins stored in your out-of-control wallet of $4,433,817 (page 13/14) with the book
value of digital assets wrongfully seized and impounded as of December 31, 2022 of
$3,944,808 (pages F-5 and F-42).
•Tell us why only $3,469,762 of $3,944,808 of book value of bitcoin and USD Coin at
December 31, 2022 was verified as transferred to other unknown wallets.  Include
why these wallets are unknown, who has custody and control of them, and their
nature, if known. Tell us how these cryptocurrencies could have been transferred to
other wallets if they were stored in hardware cold wallets seized by the police.
•Tell us why it is appropriate to record bitcoin and USD Coin that you apparently did
not control on your balance sheet at December 31, 2022. To the extent that you can
demonstrate that you controlled these assets at December 31, 2022, tell us why you
have not impaired these assets or disclose them as being impaired upon seizure after
the balance sheet date under ASC 855-10.
•Confirm for us that the only cryptocurrencies on your December 31, 2022 balance
sheet not seized relate to your Filecoin holdings. Tell us any known risks to these
remaining digital assets, and who has custody and control of them.
17.Tell us your consideration for accounting for USD Coin as a financial instrument as
defined in ASC 825-10-20.
18.We note your breakout of intangible assets by type on page F-40 and your intangible asset
movements on page F-41 for 2022 and 2021. Please provide us proposed revised
disclosure to be included in future filings that addresses the following:
•Revise the table on page F-40 to show the then-current