SecProbe.io

United States securities and exchange commission logo
March 23, 2023
Asher Genoot
President
Hut 8 Corp.
c/o U.S. Data Mining Corp.
1221 Brickell Avenue, Suite 900
Miami, Florida 33131
Re:Hut 8 Corp.
Registration Statement on Form S-4
Filed February 13, 2023
File No. 333-269738
Dear Asher Genoot:
            We have reviewed your registration statement 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 this letter by amending your registration statement and providing the
requested information.  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
General
1.Please provide disclosure of any significant crypto asset market developments material to
understanding or assessing Hut 8's and USBTC's respective business, financial condition
and results of operations, or share price since either company's last reporting period,
including any material impact from the price volatility of crypto assets.
Questions and Answers about the Business Combination
What are the U.S. federal income tax consequences of the Merger..., page 5
2.You disclose that the parties intend that the Hut 8 Share Exchange occurring pursuant to
the Arrangement and the Merger, together, be treated as an exchange by Hut 8

 FirstName LastNameAsher Genoot
 Comapany NameHut 8 Corp.
 March 23, 2023 Page 2
 FirstName LastName
Asher Genoot
Hut 8 Corp.
March 23, 2023
Page 2
shareholders and USBTC stockholders, respectively, that qualifies under Section 351(a) of
the Internal Revenue Code.  Since it appears that the tax consequences to the transaction
are material to shareholders, please file a tax opinion as an exhibit to the registration
statement. Refer to Item 601(b)(8) of Regulation S-K. For guidance, please refer to Staff
Legal Bulletin No. 19, Section III.A.2.
Selected Unaudited Financial Data as of January 31, 2023, page 23
3.The combined financial information does not appear to comply with the requirements for
the presentation of pro forma financial information in Article 11 of Regulation S-X.
Please either remove this presentation, or explain to us the purpose of the presentation and
the basis for its presentation. Refer to Item 11-02(a)(12) of Regulation S-X.
Market Price of and Dividends on Common Equity
Comparative Per Share Market Price, page 24
4.Please disclose the market value of Hut 8 on an equivalent per share basis. Refer to Item
3(g) of Form S-4.
Risk Factors, page 27
5.To the extent material, please discuss any reputational harm that either Hut 8 or USBTC
may face in light of recent disruptions in the crypto asset markets, including bankruptcies,
crypto asset price volatility, and legal proceedings involving prominent crypto platforms.
For example, discuss how market conditions have affected how either company's business
is perceived by customers, counterparties, and regulators, and whether there is a material
impact on its operations or financial condition.
6.Please describe any material risks to either Hut 8's or USBTC's business from the
possibility of regulatory developments related to crypto assets and crypto asset markets.
 Identify material pending crypto legislation or regulation and describe any material
effects it may have on either company's business, financial condition, and results of
operations.
7.Please describe any material risks that either Hut 8 or USBTC faces related to the
assertion of jurisdiction by U.S. and foreign regulators and other government entities over
crypto assets and crypto asset markets.
8.To the extent material, please describe any gaps that either Hut 8's or USBTC's respective
board or management have identified with respect to risk management processes and
policies in light of current crypto asset market conditions as well as any changes they have
made to address those gaps.

 FirstName LastNameAsher Genoot
 Comapany NameHut 8 Corp.
 March 23, 2023 Page 3
 FirstName LastName
Asher Genoot
Hut 8 Corp.
March 23, 2023
Page 3
9.Please describe any material financing, liquidity, or other risks that either Hut 8 or
USBTC faces related to the impact that the current crypto asset market disruption has had,
directly or indirectly, on:
•The value of the crypto assets or miners that either company uses as collateral; or
•The value of either company's crypto assets, miners or mining real estate used by
others as collateral, as applicable in each case.
10.To the extent material to either Hut 8 or USBTC, please describe any of the following
risks from disruptions in the crypto asset markets:
•Risk from depreciation in either company's stock price.
•Risk of loss of customer demand for either company's products and services.
•Financing risk, including equity and debt financing.
•Risk of increased losses or impairments in either company's investments or other
assets.
•Risks of legal proceedings and government investigations, pending or known to be
threatened, in the United States or in other jurisdictions against either company or its
affiliates.
•Risks from price declines or price volatility of crypto assets.
•Risks of increased regulation of the crypto asset industry.
Risks Related to USBTC's Business, page 38
11.Please expand on your statement on page 46 that “an adverse outcome of the Niagara Falls
Litigation may affect U.S. Data Technologies Group Ltd.’s permits and operations with
respect to its Niagara Falls data site.” Describe the potential practical implications of an
adverse decision in the Niagara Falls Litigation, including whether the site may be
required to be closed and its impact on USBTC’s business performance and results of
operations.
USBTC’s Power Generation-Related Risks
Maintenance, expansion and refurbishment of power generation facilities..., page 58
12.We note your references to "NYISO" and "ERCOT" on page 58 of your filing.  Please
ensure that all acronyms and terms are defined when first used.  Refer to Rule 421(b) of
the Securities Act of 1933, as amended.
USBTC's future success will depend upon the value of Bitcoin, page 67
13.Please tell us why you disclose that USBTC will be marking Bitcoin to fair value each
quarter since this policy does not appear consistent with that disclosed on page F-31.
The Business Combination, page 75
14.We note that Hut 8 and USBTC provided certain financial forecasts and projections to the
financial advisors and that the financial advisors relied upon these financial projections in
preparing their fairness opinions.  Please disclose in this section the financial projections

 FirstName LastNameAsher Genoot
 Comapany NameHut 8 Corp.
 March 23, 2023 Page 4
 FirstName LastNameAsher Genoot
Hut 8 Corp.
March 23, 2023
Page 4
and forecasts provided to the financial advisors or explain why such information is not
material to security holders.
Fairness Opinion of Stifel GMP, page 82
15.Please revise to quantify the fees Hut 8 paid to Stifel GMP when it rendered its fairness
opinion.  Also please quantify the fees payable to Stifel GMP contingent on completion of
the Business Combination or an alternative transaction.  Refer to Item 4(b) of Form S-4
and Item 1015(b)(4) of Regulation M-A.
Accounting Treatment of the Business Combination, page 95
16.Please tell us about the pertinent facts and circumstances you considered in determining
the acquirer in the business combination. Refer to ASC 805-10, including ASC 805-10-
55-12. Further, you disclose that the preliminary assessment of the accounting acquirer is
subject to evaluation and may be impacted by matters such as New Hut board rights
related to tie-break votes and the relative fair values of USBTC and Hut 8 at closing.
Include a discussion of these matters in your response.
The Business Combination Agreement
Conditions to Completion of the Business Combination, page 114
17.We note your disclosure that certain conditions to the consummation of the business
combination may be waived by mutual consent of the Parties. Please specify which, if
any, conditions may not be waived by mutual consent of the Parties.
Information About Hut 8, page 125
18.To the extent material, please discuss how the bankruptcies of companies in crypto asset-
related businesses and the downstream effects of those bankruptcies have impacted or
may impact Hut 8's business, financial condition, customers, and counterparties, either
directly or indirectly.  Clarify whether Hut 8 has material assets that may not be recovered
due to the bankruptcies or may otherwise be lost or misappropriated.
19.To the extent material to an understanding of Hut 8's business, please describe any direct
or indirect exposures to other counterparties, customers, custodians, or other participants
in crypto asset markets known to:
•Have filed for bankruptcy, been decreed insolvent or bankrupt, made any assignment
for the benefit of creditors, or have had a receiver appointed for them.
•Have experienced excessive redemptions or suspended redemptions or withdrawals
of crypto assets.
•Have the crypto assets of their customers unaccounted for.
•Have experienced material corporate compliance failures.
20.To the extent material, please explain whether Hut 8's crypto assets serve as collateral for
any loan, margin, rehypothecation, or other similar activities to which Hut 8 or its
affiliates are a party.  If so, identify and quantify the crypto assets used in these financing

 FirstName LastNameAsher Genoot
 Comapany NameHut 8 Corp.
 March 23, 2023 Page 5
 FirstName LastNameAsher Genoot
Hut 8 Corp.
March 23, 2023
Page 5
arrangements and disclose the nature of Hut 8's relationship for loans with parties other
than third-parties.  State whether there are any encumbrances on the collateral.  Discuss
whether the current crypto asset market disruption has affected the value of the underlying
collateral.  Please include similar disclosure for Hut 8's miners used as collateral.
21.Please revise to address the following:
•Discuss Hut 8's intentions to mine, invest in or transact in crypto assets other than
Bitcoin and update this disclosure in future filings as appropriate;
•Describe Hut 8's process, if any, for analyzing whether a particular crypto asset that it
intends to mine, invest in, or transact in is a "security" within the meaning of Section
2(a)(1) of the Securities Act, including whether and how the recent completion of
Ethereum's transition to Proof-of-Stake consensus has impacted its analysis.  Disclose
that this is a risk-based judgment and does not constitute a legal determination
binding on regulators or the courts; and
•Expand the risk factors section to describe the specific potential consequences to Hut
8 and to investors if it is subsequently determined that Hut 8 has participated in the
unregistered issuance or distribution of securities, including the specific risks inherent
in its business model that may necessitate corrective measures as a result of judicial
or regulatory actions.
22.Refer to your disclosure in your Annual Information Form, which has been filed as
Exhibit 99.1 to Hut 8's Annual Report on Form 40-F for the year ended December 31,
2021 and revise to address the following points:
•On page 11, you disclose that Hut 8 provides cloud services and data centre
colocation services to its customers.  Please revise to briefly discuss Hut 8's fee
structure for providing such services to its customers and include illustrative
examples, as appropriate.
•On page 12, you disclose that Hut 8 has entered into agreements with each of ATCO
Electric Ltd., City of Medicine Hat and Validus for the provision of power or use of
electricity.  Please revise to describe in greater detail the material terms and
conditions of these agreements, including, without limitation, the material obligations
of the parties, the duration of the agreement and the material termination provisions.
•On page 13, you state that the primary seasonality that Hut 8 experiences is related to
potential changes in electricity prices and that electricity is your largest expense.
Please revise to provide a discussion of your average cost of electricity for the
periods presented, and whether there are any known trends regarding the fluctuations
in the cost of electricity. In addition, consider including a discussion of the
differences in the cost of electricity for each of the geographic regions you operate.
•On page 16, we note the statements in the bottom risk factor that the Commission's
views regarding whether a particular crypto asset falls within the definition of a
“security” under the U.S. federal securities laws have "evolved over time and it is
difficult to predict the direction or timing of any continuing evolution.  It is also
possible that a change in the governing administration or the appointment of new
SEC commissioners could substantially impact the views of the SEC and its staff."

 FirstName LastNameAsher Genoot
 Comapany NameHut 8 Corp.
 March 23, 2023 Page 6
 FirstName LastName
Asher Genoot
Hut 8 Corp.
March 23, 2023
Page 6
Please remove these statements as the legal tests are well-established by U.S.
Supreme Court case law and the Commission and staff have issued reports, orders,
and statements that provide guidance on when a crypto asset may be a security for
purposes of the U.S. federal securities laws.
Information About USBTC, page 129
23.Please revise this section of your filing to address comments 18 through 20 above as they
apply to your disclosure concerning USBTC.
Business Overview, page 129
24.Please discuss USBTC's intentions to mine, invest in or transact in crypto assets other than
Bitcoin and update this disclosure in future filings as appropriate.
25.You disclose that USBTC owns a 50% interest in the King Mountain JV with a "leading
North American energy company."  Please identify your joint venture partner.
Reactor: Energy Curtailment, page 130
26.We note your disclosure regarding Reactor, “an advanced, algorithmic energy curtailment
platform that USBTC believes will drive significant Bitcoin mining profitability for
USBTC.” Please provide further detail regarding Reactor, its development, its role in
USBTC’s current operations and any measurable changes in energy efficiency,
profitability or any other relevant metrics that may drive USBTC’s results of operations.
Custody Policy, page 132
27.Please revise this section to address the following:
•Provide quantified disclosure regarding the respective portions of USBTC's Bitcoin
balance held by each of the third-party custodians referenced.
•Disclose the material terms of USBTC's arrangement with each third-party custodian,
including, for example, in what manner the relevant custodian is required to store
USBTC's crypto assets, whether it is contractually required to hold USBTC's crypto
assets in cold storage, what security precautions the custodian is required to
undertake, what inspection rights USBTC has, and what type of insurance, if any, the
custodian is required to have to protect USBTC from loss.

Also please apply this comment to the same or similar disclosures of Hut 8 throughout the
filing, as applicable.
28.You disclose that USBTC uses third-party custody solutions to safeguard its bitcoin and
"does not currently hold any bitcoin for third parties."  Please disclose whether USBTC
has any current plans or intentions to hold any crypto assets for third parties in the future.

 FirstName LastNameAsher Genoot
 Comapany NameHut 8 Corp.
 March 23, 2023 Page 7
 FirstName LastName
Asher Genoot
Hut 8 Corp.
March 23, 2023
Page 7
King Mountain JV, page 133
29.Please disclose the material terms of the King Mountain JV Senior Note, including
repayment terms, principal eve