SecProbe.io

United States securities and exchange commission logo
January 18, 2024
Jeffrey Lucas
Chief Financial Officer
Bitfarms Ltd
18 King Street East
Suite 902
Toronto, Ontario
Canada M5C 1C4
Re:Bitfarms Ltd
Form 40-F for the Fiscal Year Ended December 31, 2022
Filed March 21, 2023
File No. 001-40370
Response dated October 5, 2023
Dear Jeffrey Lucas:
            We have reviewed your October 5, 2023 response to our comment letter and have the
following comments.
            Please respond to this letter 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 a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments. Unless
we note otherwise, any references to prior comments are to comments in our September 18,
2023 letter.
Form 40-F for the Fiscal Year Ended December 31, 2022
Exhibit 99.2 Consolidated Financial Statements
Consolidated Statements of Cash Flows, page 8
1.We continue to evaluate your response to comment 1.

 FirstName LastNameJeffrey Lucas
 Comapany NameBitfarms Ltd
 January 18, 2024 Page 2
 FirstName LastName
Jeffrey Lucas
Bitfarms Ltd
January 18, 2024
Page 2
Note 3. Basis of Presentation and Significant Accounting Polcies
Revenue Recognition, page 13
2.We acknowledge your response to comment 2. Please respond to the following:
•Your disclosure indicates that your single performance obligation is providing
computing power and your response indicates your single performance obligation is
providing hashrate. We believe your disclosure requires a more precise description of
your promise and single performance obligation. Please tell us whether a more
accurate description of your promise and single performance obligation is a service to
perform hash calculations for the pool operator, and if so, revise your disclosure to
clarify.
•With respect to the termination provisions in both your current and prior
arrangements with your mining pool operator for the reporting periods presented,
specifically clarify whether you have concluded that the mining pool operator with
whom you contract is your customer and address whether the mining pool operator,
as your customer, has a unilateral enforceable right to terminate the contract at any
time without substantively compensating you for the termination. In your response,
refer us to the applicable portion of your arrangement. If such a termination right
exists, tell us your consideration of whether the duration of the contract extends
beyond the goods or services already transferred, and, if not, whether the duration of
the contract is less than 24 hours and the contract continuously renews throughout the
day. Make corresponding revisions to your accounting policy as necessary.
•To the extent your mining pool operator possesses the ability to terminate the contract
at any time, it appears this right could be akin to a renewal right. If this right exists,
tell us whether it is a material right. For example, clarify whether the terms,
conditions, and compensation amounts of the renewal right is at the then-current
market rates. If so, tell us whether you have concluded that the customer’s renewal
option is not a material right. Refer to IFRS 15.26(j). Make corresponding revision to
your accounting policy and related disclosures to the extent necessary.
•Revise your accounting policy to disclose the form of consideration to which you are
entitled for providing the service of performing hash calculations for the pool
operator (i.e., bitcoin) and your conclusion that the consideration is variable. Also,
revise your accounting policy to identify the payout methodology used to determine
the amount of consideration to which you are entitled and describe the variables that
comprise the formula. For example, under the Full Pay Per Share (FPPS) payout
model it appears you earn compensation equal to the sum of your share of (a)
network block subsidies and (b) network transaction fees less (c) pool operating fees
and that each of these components has a number of variables.
•Revise the statement in your accounting policy describing the transaction price to
clarify whether you constrain any portion of your estimate of the variable
consideration to which you are entitled for performing the service. For example,
clarify whether the uncertainties in the FPPS variables no longer exist at 23:59:59
UTC irrespective of the timing of your receipt of confirmation of the bitcoin you will

 FirstName LastNameJeffrey Lucas
 Comapany NameBitfarms Ltd
 January 18, 2024 Page 3
 FirstName LastName
Jeffrey Lucas
Bitfarms Ltd
January 18, 2024
Page 3
receive or your actual receipt of such bitcoin.
•We note your disclosure that you measure the non-cash consideration based on the
price on the day it is received. Revise your accounting policy to describe how the
measurement date relates to both the date of contract inception and the date you
transfer control of the service under the contract.
•In your response, you state in your discussion of IFRS 15.46 that your provision of
computing power and the settlement of the receivable occur on the same day, on page
14 of your response you state the non-cash consideration is received at the end of the
day, and in the discussion of IFRS 15.68 you state that the bitcoin is received a few
hours later.  Please confirm for us when you receive the non-cash consideration.
•We are unable to reconcile your response that “[t]he Company recognizes revenue
only after receiving confirmation from the mining pool” to the requirements of IFRS
15.31, which indicates that recognition occurs upon the transfer of control of the
service, not upon receipt of the consideration to which you are entitled for
transferring control of that service. Please revise your accounting policy to comply
with IFRS 15 and your accounting policy disclosures. Please tell us if applying the
corrected policy to historical periods results in a material change to the historical
financial statements presented.
Digital Assets, page 14
3.We acknowledge your response to comment 3. Your disclosure on page 14 of Exhibit 99.2
states that you classify the bitcoin as current assets because you determined the bitcoin has
markets with sufficient liquidity. In future filings, please clarify in your disclosure, similar
to your response and IAS 1.66 that you classified the bitcoin as current assets because you
expected to realize the asset within twelve months after the reporting period.
4.You disclose that you account for your cryptocurrency as intangible assets under IAS 38.
We note per IAS 38.3 that IAS 38 applies in accounting for all intangible assets except
those that are within the scope of another standard. Please tell us your consideration for
whether your cryptocurrency is held for sale in the ordinary course of business and meets
the definition of inventory under IAS 2.6(a).
            Please contact Kate Tillan at 202-551-3604 or Rolf Sundwall at 202-551-3105 if you
have questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets