Correspondence 0001628280-24-033035 from Galaxy Digital Inc. (GLXY)
Galaxy Digital Inc.
Date: July 25, 2024 · CIK: 0001859392 · Accession: 0001628280-24-033035
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-262378
Referenced dates: July 1, 2024
Letter
Re: Galaxy Digital Inc.
Document
Joseph A. Hall +1 212 450 4565 joseph.hall@davispolk.com Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 davispolk.com
CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.
July 26, 2024
Registration Statement on Form S-4
Filed May 13, 2024
File No. 333-262378
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
100 F Street, N.E.
Washington, DC 20549-4631
Attn: David Irving
Mark Brunhofer
Lulu Cheng
Sandra Hunter Berkheimer
Ladies and Gentlemen:
On behalf of our clients Galaxy Digital Inc., a Delaware corporation (“GDI” or the “Company”), and Galaxy Digital Holdings Ltd., a Cayman Islands exempted company (“GDHL,” and together with GDI, “Galaxy”), we are responding to comments from the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) relating to Galaxy’s Registration Statement on Form S-4 (File No. 333-262378) (the “Registration Statement”) contained in the Staff’s letter dated July 1, 2024. Galaxy has revised the Registration Statement and is filing Amendment No. 5 to the Registration Statement (“Amendment No. 5”) together with this response letter. Amendment No. 5 also contains certain additional updates and revisions. We would be pleased to provide courtesy copies of Amendment No. 5 to the Staff on request.
For convenience, the Staff’s comments are repeated below in italics, followed by Galaxy’s responses to the comments. Where applicable, we have included page numbers to refer to the location in Amendment No. 5 where revised language addressing a particular comment appears. Capitalized terms used but not defined herein are used as defined in Amendment No. 5. Certain confidential information that is relevant to Galaxy’s responses below are included in Annexes to this letter, which will be submitted separately pursuant to a request for confidential treatment.
July 26, 2024
GLXY-1
Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83.
U.S. Securities and Exchange Commission
Amendment No. 4 to Registration Statement on Form S-4
General
1.Please note that we continue to consider your accounting policies and disclosure detailed in your prior responses and may have further comments.
Galaxy notes the Staff’s comment and is prepared to provide any additional information or clarification that may be required.
Prospectus Summary
Summary of Historical Financial Data, page 44
2.We note your response to prior comment 12. We note your removal of Gross Profit (Loss) throughout the document except in the Summary of Historical Financial Data. Please remove from your next amendment, or advise otherwise.
Galaxy has removed mentions of Gross Profit (Loss) on page 45 in response to the Staff’s comment.
Risk Factors
Risks Related to Cryptocurrencies and Digital Assets
If the digital asset award for mining blocks and transaction fees for recording transactions, page 90
3.Please revise your disclosure to discuss the geographic locations of your mining operations, any State-specific regulatory requirements in those areas, and any material impacts of these regulations on your operations.
Galaxy has revised its disclosure on page 264 to discuss the geographic location of our mining operations which are currently concentrated in Texas. Galaxy advises the Staff that it has included a discussion of Texas state-specific regulatory requirements and their impact on our mining operations.
Any inability to maintain adequate relationships with affiliates, page 96
4.We note that you have in the past held accounts at Silvergate Bank and Signature Bank. Please revise to discuss any material impacts of these past accounts and banking relationships on your operations or financial condition
July 26, 2024
GLXY-2
Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83.
U.S. Securities and Exchange Commission
Galaxy advises the Staff that Galaxy had and was able to expand banking relationships with other financial institutions and did not experience any losses or other material impact from the collapse of Silvergate Bank and Signature Bank. Accordingly, Galaxy does not believe that any disclosure on this topic would be material to investors.
Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations
Critical Accounting Policies and Estimates
Fair Value Measurements, page 181
5.From disclosure in Note 11 beginning on page F-37 we note a 114% increase in Level 3 investments from $170.5 million at December 31, 2022 to $364.6 million at December 31, 2023. We also note that at December 31, 2023 these investments represent 10% of total assets and that you added disclosure in your policy note on page F-20 that your reported fair value estimates could vary materially if different unobservable pricing inputs and other assumptions were used. Please revise your critical accounting policy estimates disclosure to provide a sensitivity analysis for depicting the impact of applying reasonably likely changes in pricing inputs and other assumptions. Otherwise tell us why such disclosure is not required in light of your added policy note disclosure referred to above. See Item 303(b)(3) of Regulation S-K and Section V of Release No. 33-8350.
Galaxy advises the Staff that Galaxy holds a large number of Level 3 investments that are valued based on a wide range of inputs as disclosed on page F-34. The majority of the investments are early-stage startup companies with no free cash flows. This necessitates a different valuation approach for each investment with no single valuation model or input that can be used to provide a meaningful sensitivity analysis. Galaxy has revised its critical accounting policies on page 185 to highlight this fact and reference the correlations between Galaxy’s Level 3 investments and the broader digital asset market capitalization.
Results of Operations
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022, page 184
6.We acknowledge your response to prior comment 5 and your revised disclosure on page 185. Please revise your disclosure to explain why you wound down the operations of Quantitative Principal Trading during the fourth quarter of 2023 or tell us where you disclosed the reason in your filing.
July 26, 2024
GLXY-3
Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83.
U.S. Securities and Exchange Commission
Galaxy has revised its disclosure on page 188 to describe the reason for the changes in its business operations.
7.We acknowledge your response and revised disclosure related to prior comment 6 and believe that the lack of comparability between 2023 and 2022 due to the adoption of ASU 2023-08 in 2023 necessitates more, not less, granular discussion as previously requested. In addition, your 2022 versus 2021 discussion, which is on a comparable basis, would benefit from more granular disclosure. Your current disclosure of percentage changes in bitcoin and ether prices does not provide investors with information regarding the components of the gains/losses recorded. As a result, please revise your disclosure to detail your gains/losses by business activity (for example, change in fair value of digital intangible assets under ASC 2023-08 in 2023, change in fair value and realized gains/losses on sale of digital financial assets, gains/losses associated with lending activities, gains/losses associated with borrowing activities, gains/losses on posting in DeFi transactions, etc.) and discuss the causes for significant variations considering the price versus volume guidance in Item 303(b)(2)(iii) of Regulation S-K.
Galaxy advises the Staff that the net gain or loss on digital assets is primarily resulting from our net long digital asset position after the adoption of ASU 2023-08. As the change in value of the majority of digital assets borrowed/loaned and associated liabilities/receivables are included in the net gain/loss on digital assets, any change in value of the underlying assets does not materially affect the net gains or losses on digital assets. Similarly, sales of digital financial assets, most of which are stablecoins with a fair value of $1 US Dollar, do not result in a material component of our net gains or losses on digital assets (except when the digital financial asset loses its peg to the underlying fiat currency). Galaxy has revised its disclosures on page 189 and elsewhere to disclose the components of net gains or losses on digital assets related to the adoption of ASU 2023-08 in the applicable periods, amounts related to digital assets measured at fair value through consolidated investment companies, amounts related to gains and losses on digital financial assets, as well as amounts related to derecognition of digital assets that are not measured at fair value.
Information About Galaxy
Our Products and Services
Global Markets, page 207
8.We note your revised disclosure that "GPL customers may be approved to trade additional digital assets so long as those digital assets are approved with “No
July 26, 2024
GLXY-4
Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83.
U.S. Securities and Exchange Commission
Restrictions” for Galaxy’s broader Trading counterparties." Please revise your disclosure to clarify under what circumstances GPL customers may be approved to trade additional digital assets and if any GPL customers have been approved to trade crypto assets other than those identified in the "GPL" column in the chart beginning on page 210.
Galaxy has revised its disclosure on page 219 in response to the Staff’s comment. Galaxy further advises the Staff that no GPL customers have been approved to trade digital assets other than those identified in the GPL column in the chart beginning on page 219.
Expansion of Cryptocurrency Universe, page 220
9.Please revise the narrative discussion regarding the charts on pages 222, 224 and 225 to balance the disclosure, including by discussing the decrease since 2022.
Galaxy has revised its disclosure on pages 232 through 235 in response to the Staff’s comment.
The Cryptoeconomy
Transaction on DeFi, page 225
10.We note your response to prior comment 10 and re-issue in part. Please revise your disclosure to:
•Describe "liquid staking";
•Discuss whether you hold any interest in the AMMs and decentralized exchanges; and
•Quantify your aggregate transactions on DeFi protocols. In this regard, we note that you limit your exposure to individual liquidity pools to a defined percentage of the liquidity pool TVL.
Galaxy has revised its disclosure to include a definition of liquid staking on page 354. Galaxy further advises the Staff that as disclosed on page 235, Galaxy does not hold any equity interest in the AMMs. Galaxy has revised its disclosure on page 236 to quantify its aggregate transaction volume across DeFi protocols for the three months ended March 31, 2024.
July 26, 2024
GLXY-5
Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83.
U.S. Securities and Exchange Commission
Our Business Model
DrawBridge Lending, page 232
11.We note your response to prior comment 4. Please revise your disclosure to include your response, and disclose the costs and risks related to the operation of a staking program, and whether the CPO participates in staking of tokens other than Solana.
Galaxy has revised its disclosures on pages 60, 61 and 228 in response to the Staff’s comment. Additionally, Galaxy has revised its disclosure on page F-11 to describe the nature of the costs associated with operating the blockchain infrastructure in addition to its amount in Note 5 to the condensed consolidated interim financial statements. Galaxy advises the Staff that it had no material blockchain infrastructure services prior to the first quarter of 2024.
ESG Program Oversight, page 236
12.Please revise your chart on page 237 to enlarge the footnotes so they are legible. Please make similar changes throughout as applicable.
Galaxy has revised its disclosures on page 248 and throughout in response to the Staff’s comment.
Notes to Consolidated Financial Statements
Note 2. Significant Accounting Policies
Revenues and Gains / (Losses) from Operations
Hosting fees, page F-13
13.We note that your hosting arrangements have a variable fee component and that this component is dependent upon the amount of bitcoin mined by the customers' mining equipment and any power curtailment credit shared with the customer. Please summarize for us the significant terms of your hosting arrangements including, but not limited to:
•how variable consideration is derived;
•whether this variable consideration is paid in cash or bitcoin; and
•who determines on which mining pool(s) to mine, when that determination is first made and when/how often it can be changed.
In your response, tell us the components of the $24.3 million of hosting fee revenue in 2023 as disclosed on page 185 between fixed fees, variable fees
July 26, 2024
GLXY-5
Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83.
U.S. Securities and Exchange Commission
attributed to bitcoin mined and variable fees associated with power curtailment credits.
Galaxy advises the Staff that the significant terms of its hosting arrangements are described in Annex I to this response.
Proprietary mining, page F-13
14.We note your response to prior comment 14. Please address the following:
•We note your statement in the second bullet of your response that "the customer does not, in fact, have the unilateral right (option) to renew Galaxy's services." This statement appears inconsistent with your policy disclosure that the arrangement with the mining pool operator can be terminated by either party without penalty or prior notice. If the pool operator can terminate the arrangement without penalty and without notice, tell us why it does not have the unilateral right to renew your services. See Question 8 of the FASB Revenue Recognition Implementation Q&As (Q&A 8) which indicates that the customer's termination rights can be similar to renewal options.
•Assuming you conclude that the customer has the right to terminate the contract at any time without penalty and that this termination right results in a contract that the customer continually renews, revise your disclosure to specifically indicate that the customer's renewal right does not represent a material right because, consistent with your response, the contract renews at fair value (i.e., there is no discount) and link this statement to your conclusion that you have only one performance obligation. Also, specifically indicate that the contract term is less than 24 hours. Otherwise, consistent with the guidance in Q&A 8, tell us why your contract for accounting purposes is not longer than a day and tell us the date of cont
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CORRESP 1 filename1.htm Document Joseph A. Hall +1 212 450 4565 joseph.hall@davispolk.com Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 davispolk.com CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”. July 26, 2024 Re: Galaxy Digital Inc. Registration Statement on Form S-4 Filed May 13, 2024 File No. 333-262378 U.S. Securities and Exchange Commission Division of Corporation Finance Office of Finance 100 F Street, N.E. Washington, DC 20549-4631 Attn: David Irving Mark Brunhofer Lulu Cheng Sandra Hunter Berkheimer Ladies and Gentlemen: On behalf of our clients Galaxy Digital Inc., a Delaware corporation (“GDI” or the “Company”), and Galaxy Digital Holdings Ltd., a Cayman Islands exempted company (“GDHL,” and together with GDI, “Galaxy”), we are responding to comments from the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) relating to Galaxy’s Registration Statement on Form S-4 (File No. 333-262378) (the “Registration Statement”) contained in the Staff’s letter dated July 1, 2024. Galaxy has revised the Registration Statement and is filing Amendment No. 5 to the Registration Statement (“Amendment No. 5”) together with this response letter. Amendment No. 5 also contains certain additional updates and revisions. We would be pleased to provide courtesy copies of Amendment No. 5 to the Staff on request. For convenience, the Staff’s comments are repeated below in italics, followed by Galaxy’s responses to the comments. Where applicable, we have included page numbers to refer to the location in Amendment No. 5 where revised language addressing a particular comment appears. Capitalized terms used but not defined herein are used as defined in Amendment No. 5. Certain confidential information that is relevant to Galaxy’s responses below are included in Annexes to this letter, which will be submitted separately pursuant to a request for confidential treatment. July 26, 2024 GLXY-1 Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83. U.S. Securities and Exchange Commission Amendment No. 4 to Registration Statement on Form S-4 General 1.Please note that we continue to consider your accounting policies and disclosure detailed in your prior responses and may have further comments. Galaxy notes the Staff’s comment and is prepared to provide any additional information or clarification that may be required. Prospectus Summary Summary of Historical Financial Data, page 44 2.We note your response to prior comment 12. We note your removal of Gross Profit (Loss) throughout the document except in the Summary of Historical Financial Data. Please remove from your next amendment, or advise otherwise. Galaxy has removed mentions of Gross Profit (Loss) on page 45 in response to the Staff’s comment. Risk Factors Risks Related to Cryptocurrencies and Digital Assets If the digital asset award for mining blocks and transaction fees for recording transactions, page 90 3.Please revise your disclosure to discuss the geographic locations of your mining operations, any State-specific regulatory requirements in those areas, and any material impacts of these regulations on your operations. Galaxy has revised its disclosure on page 264 to discuss the geographic location of our mining operations which are currently concentrated in Texas. Galaxy advises the Staff that it has included a discussion of Texas state-specific regulatory requirements and their impact on our mining operations. Any inability to maintain adequate relationships with affiliates, page 96 4.We note that you have in the past held accounts at Silvergate Bank and Signature Bank. Please revise to discuss any material impacts of these past accounts and banking relationships on your operations or financial condition July 26, 2024 GLXY-2 Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83. U.S. Securities and Exchange Commission Galaxy advises the Staff that Galaxy had and was able to expand banking relationships with other financial institutions and did not experience any losses or other material impact from the collapse of Silvergate Bank and Signature Bank. Accordingly, Galaxy does not believe that any disclosure on this topic would be material to investors. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Critical Accounting Policies and Estimates Fair Value Measurements, page 181 5.From disclosure in Note 11 beginning on page F-37 we note a 114% increase in Level 3 investments from $170.5 million at December 31, 2022 to $364.6 million at December 31, 2023. We also note that at December 31, 2023 these investments represent 10% of total assets and that you added disclosure in your policy note on page F-20 that your reported fair value estimates could vary materially if different unobservable pricing inputs and other assumptions were used. Please revise your critical accounting policy estimates disclosure to provide a sensitivity analysis for depicting the impact of applying reasonably likely changes in pricing inputs and other assumptions. Otherwise tell us why such disclosure is not required in light of your added policy note disclosure referred to above. See Item 303(b)(3) of Regulation S-K and Section V of Release No. 33-8350. Galaxy advises the Staff that Galaxy holds a large number of Level 3 investments that are valued based on a wide range of inputs as disclosed on page F-34. The majority of the investments are early-stage startup companies with no free cash flows. This necessitates a different valuation approach for each investment with no single valuation model or input that can be used to provide a meaningful sensitivity analysis. Galaxy has revised its critical accounting policies on page 185 to highlight this fact and reference the correlations between Galaxy’s Level 3 investments and the broader digital asset market capitalization. Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022, page 184 6.We acknowledge your response to prior comment 5 and your revised disclosure on page 185. Please revise your disclosure to explain why you wound down the operations of Quantitative Principal Trading during the fourth quarter of 2023 or tell us where you disclosed the reason in your filing. July 26, 2024 GLXY-3 Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83. U.S. Securities and Exchange Commission Galaxy has revised its disclosure on page 188 to describe the reason for the changes in its business operations. 7.We acknowledge your response and revised disclosure related to prior comment 6 and believe that the lack of comparability between 2023 and 2022 due to the adoption of ASU 2023-08 in 2023 necessitates more, not less, granular discussion as previously requested. In addition, your 2022 versus 2021 discussion, which is on a comparable basis, would benefit from more granular disclosure. Your current disclosure of percentage changes in bitcoin and ether prices does not provide investors with information regarding the components of the gains/losses recorded. As a result, please revise your disclosure to detail your gains/losses by business activity (for example, change in fair value of digital intangible assets under ASC 2023-08 in 2023, change in fair value and realized gains/losses on sale of digital financial assets, gains/losses associated with lending activities, gains/losses associated with borrowing activities, gains/losses on posting in DeFi transactions, etc.) and discuss the causes for significant variations considering the price versus volume guidance in Item 303(b)(2)(iii) of Regulation S-K. Galaxy advises the Staff that the net gain or loss on digital assets is primarily resulting from our net long digital asset position after the adoption of ASU 2023-08. As the change in value of the majority of digital assets borrowed/loaned and associated liabilities/receivables are included in the net gain/loss on digital assets, any change in value of the underlying assets does not materially affect the net gains or losses on digital assets. Similarly, sales of digital financial assets, most of which are stablecoins with a fair value of $1 US Dollar, do not result in a material component of our net gains or losses on digital assets (except when the digital financial asset loses its peg to the underlying fiat currency). Galaxy has revised its disclosures on page 189 and elsewhere to disclose the components of net gains or losses on digital assets related to the adoption of ASU 2023-08 in the applicable periods, amounts related to digital assets measured at fair value through consolidated investment companies, amounts related to gains and losses on digital financial assets, as well as amounts related to derecognition of digital assets that are not measured at fair value. Information About Galaxy Our Products and Services Global Markets, page 207 8.We note your revised disclosure that "GPL customers may be approved to trade additional digital assets so long as those digital assets are approved with “No July 26, 2024 GLXY-4 Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83. U.S. Securities and Exchange Commission Restrictions” for Galaxy’s broader Trading counterparties." Please revise your disclosure to clarify under what circumstances GPL customers may be approved to trade additional digital assets and if any GPL customers have been approved to trade crypto assets other than those identified in the "GPL" column in the chart beginning on page 210. Galaxy has revised its disclosure on page 219 in response to the Staff’s comment. Galaxy further advises the Staff that no GPL customers have been approved to trade digital assets other than those identified in the GPL column in the chart beginning on page 219. Expansion of Cryptocurrency Universe, page 220 9.Please revise the narrative discussion regarding the charts on pages 222, 224 and 225 to balance the disclosure, including by discussing the decrease since 2022. Galaxy has revised its disclosure on pages 232 through 235 in response to the Staff’s comment. The Cryptoeconomy Transaction on DeFi, page 225 10.We note your response to prior comment 10 and re-issue in part. Please revise your disclosure to: •Describe "liquid staking"; •Discuss whether you hold any interest in the AMMs and decentralized exchanges; and •Quantify your aggregate transactions on DeFi protocols. In this regard, we note that you limit your exposure to individual liquidity pools to a defined percentage of the liquidity pool TVL. Galaxy has revised its disclosure to include a definition of liquid staking on page 354. Galaxy further advises the Staff that as disclosed on page 235, Galaxy does not hold any equity interest in the AMMs. Galaxy has revised its disclosure on page 236 to quantify its aggregate transaction volume across DeFi protocols for the three months ended March 31, 2024. July 26, 2024 GLXY-5 Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83. U.S. Securities and Exchange Commission Our Business Model DrawBridge Lending, page 232 11.We note your response to prior comment 4. Please revise your disclosure to include your response, and disclose the costs and risks related to the operation of a staking program, and whether the CPO participates in staking of tokens other than Solana. Galaxy has revised its disclosures on pages 60, 61 and 228 in response to the Staff’s comment. Additionally, Galaxy has revised its disclosure on page F-11 to describe the nature of the costs associated with operating the blockchain infrastructure in addition to its amount in Note 5 to the condensed consolidated interim financial statements. Galaxy advises the Staff that it had no material blockchain infrastructure services prior to the first quarter of 2024. ESG Program Oversight, page 236 12.Please revise your chart on page 237 to enlarge the footnotes so they are legible. Please make similar changes throughout as applicable. Galaxy has revised its disclosures on page 248 and throughout in response to the Staff’s comment. Notes to Consolidated Financial Statements Note 2. Significant Accounting Policies Revenues and Gains / (Losses) from Operations Hosting fees, page F-13 13.We note that your hosting arrangements have a variable fee component and that this component is dependent upon the amount of bitcoin mined by the customers' mining equipment and any power curtailment credit shared with the customer. Please summarize for us the significant terms of your hosting arrangements including, but not limited to: •how variable consideration is derived; •whether this variable consideration is paid in cash or bitcoin; and •who determines on which mining pool(s) to mine, when that determination is first made and when/how often it can be changed. In your response, tell us the components of the $24.3 million of hosting fee revenue in 2023 as disclosed on page 185 between fixed fees, variable fees July 26, 2024 GLXY-5 Galaxy Digital Inc. and Galaxy Digital Holdings Ltd. request that the information contained in this letter, marked by “[***]”, be treated as confidential information pursuant to 17 C.F.R. § 200.83. U.S. Securities and Exchange Commission attributed to bitcoin mined and variable fees associated with power curtailment credits. Galaxy advises the Staff that the significant terms of its hosting arrangements are described in Annex I to this response. Proprietary mining, page F-13 14.We note your response to prior comment 14. Please address the following: •We note your statement in the second bullet of your response that "the customer does not, in fact, have the unilateral right (option) to renew Galaxy's services." This statement appears inconsistent with your policy disclosure that the arrangement with the mining pool operator can be terminated by either party without penalty or prior notice. If the pool operator can terminate the arrangement without penalty and without notice, tell us why it does not have the unilateral right to renew your services. See Question 8 of the FASB Revenue Recognition Implementation Q&As (Q&A 8) which indicates that the customer's termination rights can be similar to renewal options. •Assuming you conclude that the customer has the right to terminate the contract at any time without penalty and that this termination right results in a contract that the customer continually renews, revise your disclosure to specifically indicate that the customer's renewal right does not represent a material right because, consistent with your response, the contract renews at fair value (i.e., there is no discount) and link this statement to your conclusion that you have only one performance obligation. Also, specifically indicate that the contract term is less than 24 hours. Otherwise, consistent with the guidance in Q&A 8, tell us why your contract for accounting purposes is not longer than a day and tell us the date of cont