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CORRESP
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filename1.htm

December
22, 2023

VIA
EDGAR

U.S.
Securities and Exchange Commission

Division
of Corporation Finance

Office
of Crypto Assets

100
F Street, NE

Washington,
D.C. 20549

Attn:
Kate Tillan and Michelle Miller

Re: Digihost
                                            Technology Inc.

                                            Form 20-F for the Fiscal Year Ended December 31, 2022

                                            Filed July 14, 2023

                                            Form 6-K filed May 15, 2023

                                            File No. 001-40527

Dear
Mses. Tillan and Miller:

On
behalf of Digihost Technology Inc. (the “Corporation” or “Digihost”), I am responding to the comments contained
in the letter dated September 8, 2023 (the “Letter”) from the staff of the U.S. Securities and Exchange Commission (the “Commission”
and, the staff of the Commission, the “Staff”) to Michel Amar, Chief Executive Officer of the Corporation, relating to the
Corporation’s Form 20-F for the fiscal year ended December 31, 2022 (the “2022 20-F”) and Form 6-K filed May 15, 2023
(the “Form 6-K”). The responses contained herein are keyed to the numbers of the comments in the Letter, which appear in
italics below for convenience of reference. Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them
in the 2022 20-F, and all dollar amounts are expressed in United States dollars (“USD” or “$”).

Form
20-F for the Fiscal Year Ended December 31, 2022

General

1. You
                                            disclose that all of your revenues in the past three years were from U.S. operations (page
                                            22) and more than 50% of your assets were located in the U.S. for the past three years (page
                                            F-30). Please tell us how you determined that you qualify as a foreign private issuer. Refer
                                            to Securities Act Rule 405 and Exchange Act Rule 3b-4.

Response:
Under Securities Act Rule 405, a “foreign private issuer” is defined as:

“any
foreign issuer other than a foreign government except an issuer meeting the following conditions as of the last business day of its most
recently completed second fiscal quarter:

(i)
More than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the
United States; and

December 22, 2023

Page 2

(ii)
Any of the following:

(A)
The majority of the executive officers or directors are United States citizens or residents;

(B)
More than 50 percent of the assets of the issuer are located in the United States; or

(C)
The business of the issuer is administered principally in the United States.”

The
definition of “foreign private issuer” in Rule 3b-4 of the Exchange Act is substantially the same. The determination of whether
more than 50 percent of an issuer’s outstanding voting securities are directly or indirectly owned of record by residents of the
United States is hereinafter referred to as the “50% test.”

Management
of the Corporation, utilizing data, including holders of record as well as a list of beneficial owners of the Corporation’s securities,
provided by a data service provider (the “data”), determined that it was a foreign private issuer during the fiscal period
covered by the 2022 20-F. The Corporation is a corporation incorporated under the Business Corporations Act (British Columbia) and has
two outstanding classes of voting securities—subordinate voting shares (the “SV Shares”) and proportionate voting shares
(the “PV Shares”). As described in the 2022 20-F, the SV Shares and the PV Shares have identical rights, except that each
holder of PV Shares is entitled to 200 votes per PV Share, and each holder of SV Shares is entitled to one vote per SV Share. The Staff
has confirmed, as set forth in Securities Act Compliance & Disclosure Interpretation Question 203.17, that, in applying the 50% test,
an issuer may look to the absolute number of voting securities owned of record outside and inside the United States, or the voting power
of such securities. The Corporation, on information and belief, including based on the data, respectfully notes the following:

 ● Management
                                            of the Corporation confirmed the Corporation’s status as a foreign private issuer in
                                            connection with the filing on October 29, 2021 of Amendment No. 1 to the Corporation’s
                                            registration statement on Form 40-F (File No. 001-40527), which was subsequently declared
                                            effective by the SEC on November 12, 2021 (at which point the Corporation became an SEC reporting
                                            company). As of October 28, 2021, 20,396,638 of the Corporation’s voting securities
                                            were outstanding, 3,048,497, or 14.95%, of which were held by United States holders.

 ● As
                                            of June 14, 2022, 29,550,439 of the Corporation’s voting securities were outstanding,
                                            7,557,123, or 25.57%, of which were held by United States holders.

The
Corporation acknowledges that the data regarding the holders of its outstanding voting securities in 2022 was as of June 14, 2022, rather
than June 30, 2022 (the end of the Corporation’s second fiscal quarter). However, the Corporation supplementally notes for the
Staff that it reassessed its status as a foreign private issuer for 2024, and, based on the data, as of June 30, 2023, 28,600,831 of
the Corporation’s voting securities were outstanding, 6,283,874, or 21.97%, of which were held by United States holders. The Corporation
has no reason to believe that, if it had the data available to it as of June 30, 2022, the holders of its outstanding voting securities
would have caused it to fail to qualify as a foreign private issuer under the 50% test, in particular because (i) at each time when the
Corporation assessed its status as a foreign private issuer, it has been able to confirm that the percentage of the Corporation’s
outstanding voting securities held of record by United States holders was significantly below the 50% threshold and (ii) as of the most
recent assessment, the percentage decreased as compared to the prior year. On that basis, the Corporation concluded that (a) it was and
continues to be a foreign private issuer under the 50% test, and (b) an evaluation of its status as a foreign private issuer under part
(ii) of the foreign private issuer definition was not necessary.

December
22, 2023

Page 3

Item
5. Operating and Financial Review and Prospects, page 22

2. We
                                            note that your cost of digital currency mining increased 124% from $13.8 million in 2021
                                            to $31 million in 2022 which you attribute to the increase in energy and infrastructure related
                                            expenses in both New York and Alabama as well as the addition of incremental miners whereas
                                            your hashrate only increased 63% from 400 PH/s in 2021 to 650 PH/s in 2022. We also note
                                            that in 2021 you purchased 10,000 high performance Bitcoin miners for a total cost of $26.8
                                            million. Please address the following:

 ● Disclose
                                            a comprehensive breakeven analysis for your mining operations that compares the cost to earn/mine
                                            one crypto asset with the value of the crypto asset.

Response:
Per the 2022 financial statements, the Company’s total operating costs for year respective years vs total coins mined were
as follows:

 ● Disclose
                                            the range of the value of crypto for the periods presented and include the assumptions made
                                            in determining value and other inputs in your calculations.

Response:
For periods presented, the Company used the below ranges of value in regard to the price of its crypto from CoinMarketCap. CoinMarketCap
is a pricing aggregator to determine the value of crypto in the periods presented (described in subsequent responses below in greater
detail). The range of prices varies depending on the period, but an example of the range used is below:

December
22, 2023

Page 4

Paragraph
17 of IFRS 13 states that “an entity need not undertake an exhaustive search of all possible markets to identify the principal
market, but it shall take into account all information that is reasonably available. In the absence of evidence to the contrary, the
market in which the entity would normally enter into a transaction to sell the asset is presumed to be the principal market”

The
Company utilizes CoinMarketCap and on a daily basis compares Bitcoin price to the price on Coinbase (its principal market for pricing)
during the periods presented. The difference in prices is immaterial.

 ● Disclose
                                            the number of data miners available to mine, including as part of any hosting arrangements
                                            that are included in digital currency mining cost.

Response:
Approximately 6,400 active miners as of December 31, 2021, available to mine. Miners per hosting arrangements as of December 31,
2021, 100. Approximately 15,637 active miners as of December 31, 2022, available to mine. Miners per hosting arrangements as of December
31, 2022, 3,450.

Report
of Independent Registered Public Accounting Firm, page F-1

3. In
                                            Note 25, you disclose a restatement of your fiscal 2021 financial statements. We note no
                                            reference to this restatement in the audit opinion. Please request your auditors to tell
                                            us how they considered whether to add an explanatory paragraph about the restatement to their
                                            report. Refer to AS 3101.18(e) and AS 2820.09 and .16 - .17.

Response:
In response to your query concerning the absence of an explanatory paragraph in our audit opinion regarding the restatement of our fiscal
2021 financial statements, we provide the following elaboration, grounded in the specifics of PCAOB Auditing Standards AS 3101.18(e)
and AS 2820.09, .16, and .17.

Alignment
with AS 3101.18(e): According to AS 3101.18(e), an auditor’s
report should include an explanatory paragraph when certain conditions are met, particularly around matters that are of such importance
that they are fundamental to users’ understanding of the financial statements. In our case, the restatement adjustments, primarily
concerning the warrants, were identified and corrected in the preliminary stages of the financial year 2022. This preemptive rectification
meant the financial statements presented for auditing for the year ended December 31, 2022, already included these adjustments. Consequently,
the final audited financial statements accurately reflected the company’s financial position without necessitating an additional
explanatory paragraph, as the restatement did not have a material effect on the users’ understanding of the financial statements
for the year 2022.

December
22, 2023

Page 5

Compliance
with AS 2820.09, .16, and .17: AS 2820.09, 2820.16, and
2820.17 guide the auditor’s consideration of an entity’s ability to continue as a going concern. The nature and timing of
the restatement did not, in our professional judgment, raise substantial doubt about the company’s ability to continue as a going
concern. The adjustments were non-recurring and did not significantly affect our assessment of the company’s operational viability
or financial integrity. Therefore, an explanatory paragraph regarding the restatement was deemed unnecessary as per these standards.

In
summary, our decision not to include a specific explanatory paragraph about the restatement in our auditor’s report was a result of consideration
of the standards AS 3101.18(e) and AS 2820.09, .16, and .17. We determined that the restatement did not bear materially on the current
period’s financial statements nor on the company’s ability to continue as a going concern, thus rendering an additional explanatory paragraph
unnecessary.

Consolidated
Statements of Comprehensive Income, page F-3

4. Tell
                                            us the significant terms of your digital currency option calls, how you are accounting for
                                            them and why, citing the accounting literature relied upon and how you applied that literature
                                            to your facts and circumstances.

Response:
Significant terms of our digital currency option calls (prices in USD)
include:

Trade
Date: 5/9/2022

Currency
Option Type: BTC Call

Call
Currency: BTC 100

Strike
Price: $35,000

Reference
Currency: BTC

Spot
Reference Price: $30,400

Expiration
Date: 9/30/2022

Trade
Date: 5/24/2022

Currency
Option Type: BTC Call

Call
Currency: BTC 150

Strike
Price: $30,000

Reference
Currency: BTC

Spot
Reference Price: $28,500

Expiration
Date: 12/31/2022

Trade
Date 5/9/2022

Trade
1:

Notional
Quantity 50 BTC

Strike
Price: $40,000

Premium:
$150,000

Expiration
Date: 9/30/2022

Settlement
Date: 9/30/2022

December 22, 2023

Page 6

Trade
2:

Notional
Quantity 50 BTC

Strike
Price: $35,000

Premium:
$235,500

Expiration
Date: 9/30/2022

Settlement
Date: 9/30/2022

Trade
3:

Notional
Quantity 50 BTC

Strike
Price: $35,000

Premium:
$238,000

Expiration
Date: 9/30/2022

Settlement
Date: 9/30/2022

The
Corporation relied on IFRS 9 guidelines to account for these options, accounting for them at fair value at the end of each quarter by
adjusting the position of the contract to marked-to-market, with gains or losses recognized in net income. When contracts are settled,
they are derecognized by removing the corresponding derivative asset or liability from the Statement of Financial Position. The offsetting
balance settles to cash and any resulting gain/loss is recorded through profit or loss.

Bitcoin
is not considered as cash, a currency, or a financial instrument. According to an IFRIC Agenda Decision (IFRIC update - March 2019),
cryptocurrency such as bitcoin is generally considered as an intangible asset within the scope of IAS 38, Intangible Assets. Paragraph
2.4 of IFRS 9, Financial Instruments, states the following regarding contracts to purchase a non-financial item, such as a BTC purchase
option:

“This
Standard shall be applied to purchase or sale contracts of a non-financial item that can be settled net in cash, another financial instrument,
or by exchanging financial instruments, as if these contracts were financial instruments, except for contracts entered into and held
for the purpose of receipt or delivery of a non-financial item in accordance with the entity’s expected purchase, sale, or usage requirements.
However, this Standard shall be applied to contracts that the entity designates as being measured at fair value through profit or loss
according to paragraph 2.5.” (emphasis added)

Paragraph
2.6 of IFRS 9 adds the following:

“There
are several ways for a purchase or sale contract of a non-financial item to be capable of being settled net in cash, another financial
instrument, or by exchanging financial instruments. This is the case in the following situations:

a)
when the contract conditions allow either party to settle net in cash, another financial instrument, or by exchanging financial instruments;

b)