Correspondence 0001437749-23-033527 from iShares Bitcoin Trust ETF (IBIT)
iShares Bitcoin Trust ETF
Date: Dec. 4, 2023 · CIK: 0001980994 · Accession: 0001437749-23-033527
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-272680
Referenced dates: November 13, 2023
Letter
VIA EDGAR Office of Crypto Assets United States Securities and Exchange Commission Division of Corporation Finance iShares Bitcoin Trust Amendment No. 1 to Registration Statement on Form S-1 Filed October 19, 2023 File No. 333-272680
Dear Mr. Dobbie and Ms. Bednarowski:
On behalf of our client, iShares® Bitcoin Trust (the “Trust”), set forth below are the Trust’s responses to the comments received from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) by letter dated November 13, 2023 (the “Comment Letter”) in connection with the Trust’s Amendment No. 1 to the Registration Statement on Form S-1 (the “Registration Statement”), which was filed with the SEC on October 19, 2023. Concurrently with the filing of this response letter, the Trust is filing Amendment No. 2 to the Registration Statement (the “Amended Registration Statement”). Where noted in the responses below, the Amended Registration Statement has been updated in response to the Staff’s comments. Defined terms used herein but not otherwise defined have the meanings ascribed to them in the Amended Registration Statement. The Trust’s responses are set out in the order in which the comments were set out in the Comment Letter and are numbered accordingly.
All page references in the responses below are to the pages of a marked copy of the Amended Registration Statement, which was submitted today by the Trust via EDGAR, unless otherwise specified.
CLIFFORD CHANCE US LLP
Mr. Justin Dobbie, Esq.
Ms. Sonia Bednarowski, Esq.
United States Securities and Exchange Commission
December 4, 2023
Page 2
Amendment No. 1 to Registration Statement on Form S-1
General
1.
To the extent that you intend to use a fact sheet, please provide us a copy for our review.
In response to the Staff’s comment, please find the proposed fact sheet attached hereto as Exhibit A. The attached is an example of the fact sheet content in draft form which omits certain performance and other information that is not yet available as the Trust has not yet commenced operations.
2.
Please describe the AML, KYC and any other procedures conducted by the Trust or Sponsor to determine, among other things, whether the counter-party in any transactions is not a sanctioned entity. To the extent that the Trust, Sponsor, Authorized Participant, Prime Broker or Custodian may not know a counter-party, please add risk factor disclosure regarding the potential risk of transactions with a sanctioned entity and the impact if such a transaction occurs. In this regard, we note your disclosure in the third risk factor on page 49.
In response to the Staff’s comment, the Trust respectfully provides the explanation below and has revised the risk factor on page 47 of the prospectus accordingly.
The Trust and the Sponsor have adopted and implemented policies and procedures that are designed to ensure that they do not violate applicable anti-money laundering (“AML”) and sanctions laws and regulations and to comply with any applicable Know-Your-Customer (“KYC”) laws and regulations. The Sponsor and the Trust will only interact with known third party service providers with respect to whom the Sponsor or its affiliates have engaged in a due diligence process to ensure a thorough KYC process, such as the Authorized Participants, Market Makers, Prime Broker and Bitcoin Custodian. Each Authorized Participant and Market Maker must undergo onboarding by affiliates of the Sponsor who are owned and controlled by the Sponsor’s indirect parent, BlackRock, Inc. (“BlackRock”), in order to use the online order entry system operated by BlackRock to place creation or redemption orders with respect to the Trust. Additionally, each Market Maker who deposits bitcoin in a creation basket or receives bitcoin from the Trust as part of a redemption must establish an account – and transfer or receive such bitcoin through such account – at the Prime Broker. As a result, the Sponsor and the Trust have instituted procedures designed to ensure that a situation would not arise where the Trust would engage in transactions with a counterparty whose identity the Sponsor and the Trust did not know.
CLIFFORD CHANCE US LLP
Mr. Justin Dobbie, Esq.
Ms. Sonia Bednarowski, Esq.
United States Securities and Exchange Commission
December 4, 2023
Page 3
Furthermore, Authorized Participants, as broker-dealers, and the Prime Broker and Bitcoin Custodian, as an entity licensed to conduct virtual currency business activity by the New York Department of Financial Services and a limited purpose trust company subject to New York Banking Law, respectively, are “financial institutions” subject to the U.S. Bank Secrecy Act, as amended (“BSA”), and U.S. economic sanctions laws. The Trust will only accept in-kind creation and redemption requests from regulated Authorized Participants and Market Makers who have represented to the Trust that they are subject to applicable sanctions and anti-money laundering laws and have implemented compliance programs that are designed to ensure compliance with those laws. Authorized Participants must represent to the Trust that they have onboarded their Market Makers through their own Bank Secrecy Act and sanctions compliance programs. In addition, with respect to all bitcoin delivered in connection with creation requests, the Market Makers must represent to the Trust that the Market Maker will form a reasonable belief (i) as to the identities of, and conduct necessary diligence with respect to, any counterparties from whom the Market Maker obtains bitcoin being transferred and (ii) that such bitcoin being transferred by the Market Maker to the Trust were not derived from, or associated with, unlawful or criminal activity. The Trust will not hold any bitcoin except those that have been delivered by Market Makers in connection with creation requests.
The Prime Broker and Bitcoin Custodian have adopted and implemented AML and sanctions compliance programs, which provide additional protections designed to ensure that the Sponsor and the Trust do not transact with a sanctioned party. Notably, every Market Maker must establish an account at the Prime Broker through which the Market Maker transfers bitcoin to the Trust during a purchase order or receives bitcoin from the Trust in connection with a redemption order. The Prime Broker performs screening using blockchain analytics to identify, detect, and mitigate the risk of transacting with a sanctioned or other unlawful actor. Pursuant to the Prime Broker’s blockchain analytics screening program, any bitcoin that is delivered to the Trust’s custody account will undergo screening designed to assess whether the origins of that bitcoin are illicit.
AML/KYC and Sanctions Compliance Procedures:
The following financial crime-related procedures, organized by the relevant party or parties undertaking or subject to the respective control, are intended to mitigate the risk of transacting or dealing with a counterparty that is the subject or target of sanctions administered and enforced by the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the European Union (“EU”), the United Nations (“UN”), and the United Kingdom’s Office of Foreign Sanctions Implementation (“OFSI”) (hereinafter, “Sanctions Authorities”). For additional information on BlackRock’s AML, CTF, and Sanctions compliance program, please reference the following literature:
https://www.blackrock.com/corporate/literature/publication/blk-aml-and-sanctions-program-attestation-letter.pdf and https://www.blackrock.com/corporate/literature/publication/wolfsberg-group-financial-crime-compliance-questionnaire.pdf.
CLIFFORD CHANCE US LLP
Mr. Justin Dobbie, Esq.
Ms. Sonia Bednarowski, Esq.
United States Securities and Exchange Commission
December 4, 2023
Page 4
Authorized Participant:
●
Each Authorized Participant is required to enter into an Authorized Participant Agreement, which includes robust AML and sanctions-related representations, warranties, and covenants in relation to their activities and the Trust.
●
All Authorized Participants in the U.S. market are banks and/or registered securities broker-dealers. Authorized Participants must be onboarded by affiliates of the Sponsor who are owned and controlled by the Sponsor’s indirect parent, BlackRock, in order to use the online order entry system operated by BlackRock to place orders.
●
At the time of onboarding to the online order entry system operated by BlackRock, all Authorized Participants undergo the Client Identification Program (“CIP”) as part of due diligence performed by affiliates of the Sponsor, which includes identifying and verifying information such as the full legal entity name, physical address, and taxpayer identification number, and verifying that the Authorized Participant is a U.S. regulated financial institution.
●
During the onboarding process, Authorized Participants are subject to screening against the Sanctions Authorities with which BlackRock globally adopts and complies, both at the time of onboarding as well as on an ongoing, nightly basis.
Market Makers:
●
Each Market Maker is required to enter into a Market Maker Agreement, which includes robust anti-money laundering and sanctions-related representations, warranties, and covenants in relation to their activities and the Trust.
●
All Market Makers must be onboarded by affiliates of the Sponsor who are owned and controlled by the Sponsor’s indirect parent, BlackRock, in order to use the online order entry system operated by BlackRock to place or take part in orders.
CLIFFORD CHANCE US LLP
Mr. Justin Dobbie, Esq.
Ms. Sonia Bednarowski, Esq.
United States Securities and Exchange Commission
December 4, 2023
Page 5
●
At the time of onboarding to the online order entry system operated by BlackRock, all Market Makers undergo the CIP as part of due diligence performed by affiliates of the Sponsor at the time of onboarding, which includes identifying and verifying information such as the full legal entity name, physical address, and taxpayer identification number. In addition, all Market Makers undergo the Sponsor/Trust’s enhanced due diligence onboarding, which includes identifying and verifying information such as the legal name, date of establishment and country of formation, legal address, identification number, evidence of regulatory standing and registered status, ownership and control structure, and source of funds.
●
During the onboarding process, the Market Maker entities, and their directors, owners/controllers are subject to screening against the Sanctions Authorities with which BlackRock globally adopts and complies, both at the time of onboarding as well as on an ongoing, nightly basis.
●
In addition, all Market Makers are required to undergo the Prime Broker’s AML/KYC and sanctions screening onboarding process in order to open accounts at the Prime Broker and deposit bitcoin to or receive bitcoin from the Trust’s Trading Account at the Prime Broker in connection with in-kind creations and redemptions.
●
In addition, all Market Makers must be successfully onboarded by the Authorized Participant through or together with whom the Market Maker is placing or taking part in a purchase or redemption order through the Authorized Participant’s own BSA/AML program. Authorized Participants must make representations to this effect to the Trust.
Trust Agreements with Prime Broker and Bitcoin Custodian:
●
The Trust has several agreements with the Prime Broker, Coinbase Inc., and Bitcoin Custodian, Coinbase Custody Trust Company, including a Prime Brokerage Agreement (the “Prime Broker Agreement”) and Service Level Agreement (“SLA”), which contain robust anti-money laundering and sanctions-related representations, warranties, and covenants and explicit stipulations about the performance and undertaking of sanctions-related controls.
●
The Prime Broker Agreement provides, among others, that all Market Makers are required to undergo the Prime Broker’s AML/KYC and sanctions screening onboarding process prior to facilitating bitcoin deposits to, and withdrawals from, the Trust Trading Account at the Prime Broker.
CLIFFORD CHANCE US LLP
Mr. Justin Dobbie, Esq.
Ms. Sonia Bednarowski, Esq.
United States Securities and Exchange Commission
December 4, 2023
Page 6
●
Among the responsibilities outlined in the governing Prime Broker Agreement and SLA, the Prime Broker has stipulated to multiple provisions around sanctions screening, including providing the Trust/Sponsor a quarterly report of its sanctions screening results for visibility into and governance over key control functions the Prime Broker conducts on behalf of the Trust’s Trading Account.
●
Prior to any movement of bitcoin between a Market Maker’s account at the Prime Broker and the Trust’s Trading Account at the Prime Broker, the Prime Broker Agreement provides that the Prime Broker will perform a sanctions screening check designed to ensure that bitcoin in kind transactions did not, directly originate from persons, entities or countries that are the target or subject of sanctions or any country embargoes, or knowingly associated with such persons, entities or countries, or otherwise in violation of applicable sanctions laws, in violation of any sanctions laws. In the event of a bitcoin in-kind transaction being suspected or determined to be in violation of certain applicable sanctions laws, the Prime Broker Agreement provides, among others, that the Prime Broker and its affiliates, including the Bitcoin Custodian, will (a) block or reject the deposit of such bitcoin into the Trust’s Trading Account, where required by applicable sanctions laws, and (b) agree to promptly inform the Trust if any fund movement between a Market Maker’s account at the Prime Broker and the Trust’s account(s) involves such bitcoin, so long as permitted by law.
3.
Please revise to disclose whether and to what extent the Trust, Sponsor, Prime Broker, Bitcoin Custodian or any other entity is permitted to loan, pledge or rehypothecate any of the Trust’s assets.
In response to the Staff’s comment, the Trust has revised the disclosure on pages 83 and 86 to clarify that the Bitcoin Custodian and the Prime Broker are not permitted to loan, pledge or rehypothecate any of the Trust’s assets. Under the Custodian Agreement, the Bitcoin Custodian is not permitted to loan, pledge, or rehypothecate any of the Trust’s assets in its Vault Balance, while under the Prime Broker Agreement, the Prime Broker is not permitted to loan, pledge, or rehypothecate any of the Trust’s assets in its Trading Balance without the Trust’s consent, which the Trust does not expect to grant. Additionally, the Trust supplementally advises the Staff that, as disclosed on page 87 of the prospectus, bitcoin credited to the Trust’s Trading Balance and Vault Balance are subject to a lien to secure unpaid Trade Credits extended to the Trust by the Trade Credit Lender.
CLIFFORD CHANCE US LLP
Mr. Justin Dobbie, Esq.
Ms. Sonia Bednarowski, Esq.
United States Securities and Exchange Commission
December 4, 2023
Page 7
Cover Page
4.
Please revise your cover page to disclose the termination date of the offering, if any, and disclose that you are registering an indeterminate number of Shares.
In response to the Staff’s comment, the Trust has revised the cover page to disclose that the Trust is regis
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CORRESP 1 filename1.htm bit20231201_corresp.htm CLIFFORD CHANCE US LLP 31 WEST 52ND STREET NEW YORK, NY 10019-6131 TEL +1 212 878 8000 FAX +1 212 878 8375 www.cliffordchance.com VIA EDGAR Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. Office of Crypto Assets United States Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, D.C. 20549 December 4, 2023 Re: iShares Bitcoin Trust Amendment No. 1 to Registration Statement on Form S-1 Filed October 19, 2023 File No. 333-272680 Dear Mr. Dobbie and Ms. Bednarowski: On behalf of our client, iShares® Bitcoin Trust (the “Trust”), set forth below are the Trust’s responses to the comments received from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) by letter dated November 13, 2023 (the “Comment Letter”) in connection with the Trust’s Amendment No. 1 to the Registration Statement on Form S-1 (the “Registration Statement”), which was filed with the SEC on October 19, 2023. Concurrently with the filing of this response letter, the Trust is filing Amendment No. 2 to the Registration Statement (the “Amended Registration Statement”). Where noted in the responses below, the Amended Registration Statement has been updated in response to the Staff’s comments. Defined terms used herein but not otherwise defined have the meanings ascribed to them in the Amended Registration Statement. The Trust’s responses are set out in the order in which the comments were set out in the Comment Letter and are numbered accordingly. All page references in the responses below are to the pages of a marked copy of the Amended Registration Statement, which was submitted today by the Trust via EDGAR, unless otherwise specified. CLIFFORD CHANCE US LLP Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. United States Securities and Exchange Commission December 4, 2023 Page 2 Amendment No. 1 to Registration Statement on Form S-1 General 1. To the extent that you intend to use a fact sheet, please provide us a copy for our review. In response to the Staff’s comment, please find the proposed fact sheet attached hereto as Exhibit A. The attached is an example of the fact sheet content in draft form which omits certain performance and other information that is not yet available as the Trust has not yet commenced operations. 2. Please describe the AML, KYC and any other procedures conducted by the Trust or Sponsor to determine, among other things, whether the counter-party in any transactions is not a sanctioned entity. To the extent that the Trust, Sponsor, Authorized Participant, Prime Broker or Custodian may not know a counter-party, please add risk factor disclosure regarding the potential risk of transactions with a sanctioned entity and the impact if such a transaction occurs. In this regard, we note your disclosure in the third risk factor on page 49. In response to the Staff’s comment, the Trust respectfully provides the explanation below and has revised the risk factor on page 47 of the prospectus accordingly. The Trust and the Sponsor have adopted and implemented policies and procedures that are designed to ensure that they do not violate applicable anti-money laundering (“AML”) and sanctions laws and regulations and to comply with any applicable Know-Your-Customer (“KYC”) laws and regulations. The Sponsor and the Trust will only interact with known third party service providers with respect to whom the Sponsor or its affiliates have engaged in a due diligence process to ensure a thorough KYC process, such as the Authorized Participants, Market Makers, Prime Broker and Bitcoin Custodian. Each Authorized Participant and Market Maker must undergo onboarding by affiliates of the Sponsor who are owned and controlled by the Sponsor’s indirect parent, BlackRock, Inc. (“BlackRock”), in order to use the online order entry system operated by BlackRock to place creation or redemption orders with respect to the Trust. Additionally, each Market Maker who deposits bitcoin in a creation basket or receives bitcoin from the Trust as part of a redemption must establish an account – and transfer or receive such bitcoin through such account – at the Prime Broker. As a result, the Sponsor and the Trust have instituted procedures designed to ensure that a situation would not arise where the Trust would engage in transactions with a counterparty whose identity the Sponsor and the Trust did not know. CLIFFORD CHANCE US LLP Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. United States Securities and Exchange Commission December 4, 2023 Page 3 Furthermore, Authorized Participants, as broker-dealers, and the Prime Broker and Bitcoin Custodian, as an entity licensed to conduct virtual currency business activity by the New York Department of Financial Services and a limited purpose trust company subject to New York Banking Law, respectively, are “financial institutions” subject to the U.S. Bank Secrecy Act, as amended (“BSA”), and U.S. economic sanctions laws. The Trust will only accept in-kind creation and redemption requests from regulated Authorized Participants and Market Makers who have represented to the Trust that they are subject to applicable sanctions and anti-money laundering laws and have implemented compliance programs that are designed to ensure compliance with those laws. Authorized Participants must represent to the Trust that they have onboarded their Market Makers through their own Bank Secrecy Act and sanctions compliance programs. In addition, with respect to all bitcoin delivered in connection with creation requests, the Market Makers must represent to the Trust that the Market Maker will form a reasonable belief (i) as to the identities of, and conduct necessary diligence with respect to, any counterparties from whom the Market Maker obtains bitcoin being transferred and (ii) that such bitcoin being transferred by the Market Maker to the Trust were not derived from, or associated with, unlawful or criminal activity. The Trust will not hold any bitcoin except those that have been delivered by Market Makers in connection with creation requests. The Prime Broker and Bitcoin Custodian have adopted and implemented AML and sanctions compliance programs, which provide additional protections designed to ensure that the Sponsor and the Trust do not transact with a sanctioned party. Notably, every Market Maker must establish an account at the Prime Broker through which the Market Maker transfers bitcoin to the Trust during a purchase order or receives bitcoin from the Trust in connection with a redemption order. The Prime Broker performs screening using blockchain analytics to identify, detect, and mitigate the risk of transacting with a sanctioned or other unlawful actor. Pursuant to the Prime Broker’s blockchain analytics screening program, any bitcoin that is delivered to the Trust’s custody account will undergo screening designed to assess whether the origins of that bitcoin are illicit. AML/KYC and Sanctions Compliance Procedures: The following financial crime-related procedures, organized by the relevant party or parties undertaking or subject to the respective control, are intended to mitigate the risk of transacting or dealing with a counterparty that is the subject or target of sanctions administered and enforced by the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the European Union (“EU”), the United Nations (“UN”), and the United Kingdom’s Office of Foreign Sanctions Implementation (“OFSI”) (hereinafter, “Sanctions Authorities”). For additional information on BlackRock’s AML, CTF, and Sanctions compliance program, please reference the following literature: https://www.blackrock.com/corporate/literature/publication/blk-aml-and-sanctions-program-attestation-letter.pdf and https://www.blackrock.com/corporate/literature/publication/wolfsberg-group-financial-crime-compliance-questionnaire.pdf. CLIFFORD CHANCE US LLP Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. United States Securities and Exchange Commission December 4, 2023 Page 4 Authorized Participant: ● Each Authorized Participant is required to enter into an Authorized Participant Agreement, which includes robust AML and sanctions-related representations, warranties, and covenants in relation to their activities and the Trust. ● All Authorized Participants in the U.S. market are banks and/or registered securities broker-dealers. Authorized Participants must be onboarded by affiliates of the Sponsor who are owned and controlled by the Sponsor’s indirect parent, BlackRock, in order to use the online order entry system operated by BlackRock to place orders. ● At the time of onboarding to the online order entry system operated by BlackRock, all Authorized Participants undergo the Client Identification Program (“CIP”) as part of due diligence performed by affiliates of the Sponsor, which includes identifying and verifying information such as the full legal entity name, physical address, and taxpayer identification number, and verifying that the Authorized Participant is a U.S. regulated financial institution. ● During the onboarding process, Authorized Participants are subject to screening against the Sanctions Authorities with which BlackRock globally adopts and complies, both at the time of onboarding as well as on an ongoing, nightly basis. Market Makers: ● Each Market Maker is required to enter into a Market Maker Agreement, which includes robust anti-money laundering and sanctions-related representations, warranties, and covenants in relation to their activities and the Trust. ● All Market Makers must be onboarded by affiliates of the Sponsor who are owned and controlled by the Sponsor’s indirect parent, BlackRock, in order to use the online order entry system operated by BlackRock to place or take part in orders. CLIFFORD CHANCE US LLP Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. United States Securities and Exchange Commission December 4, 2023 Page 5 ● At the time of onboarding to the online order entry system operated by BlackRock, all Market Makers undergo the CIP as part of due diligence performed by affiliates of the Sponsor at the time of onboarding, which includes identifying and verifying information such as the full legal entity name, physical address, and taxpayer identification number. In addition, all Market Makers undergo the Sponsor/Trust’s enhanced due diligence onboarding, which includes identifying and verifying information such as the legal name, date of establishment and country of formation, legal address, identification number, evidence of regulatory standing and registered status, ownership and control structure, and source of funds. ● During the onboarding process, the Market Maker entities, and their directors, owners/controllers are subject to screening against the Sanctions Authorities with which BlackRock globally adopts and complies, both at the time of onboarding as well as on an ongoing, nightly basis. ● In addition, all Market Makers are required to undergo the Prime Broker’s AML/KYC and sanctions screening onboarding process in order to open accounts at the Prime Broker and deposit bitcoin to or receive bitcoin from the Trust’s Trading Account at the Prime Broker in connection with in-kind creations and redemptions. ● In addition, all Market Makers must be successfully onboarded by the Authorized Participant through or together with whom the Market Maker is placing or taking part in a purchase or redemption order through the Authorized Participant’s own BSA/AML program. Authorized Participants must make representations to this effect to the Trust. Trust Agreements with Prime Broker and Bitcoin Custodian: ● The Trust has several agreements with the Prime Broker, Coinbase Inc., and Bitcoin Custodian, Coinbase Custody Trust Company, including a Prime Brokerage Agreement (the “Prime Broker Agreement”) and Service Level Agreement (“SLA”), which contain robust anti-money laundering and sanctions-related representations, warranties, and covenants and explicit stipulations about the performance and undertaking of sanctions-related controls. ● The Prime Broker Agreement provides, among others, that all Market Makers are required to undergo the Prime Broker’s AML/KYC and sanctions screening onboarding process prior to facilitating bitcoin deposits to, and withdrawals from, the Trust Trading Account at the Prime Broker. CLIFFORD CHANCE US LLP Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. United States Securities and Exchange Commission December 4, 2023 Page 6 ● Among the responsibilities outlined in the governing Prime Broker Agreement and SLA, the Prime Broker has stipulated to multiple provisions around sanctions screening, including providing the Trust/Sponsor a quarterly report of its sanctions screening results for visibility into and governance over key control functions the Prime Broker conducts on behalf of the Trust’s Trading Account. ● Prior to any movement of bitcoin between a Market Maker’s account at the Prime Broker and the Trust’s Trading Account at the Prime Broker, the Prime Broker Agreement provides that the Prime Broker will perform a sanctions screening check designed to ensure that bitcoin in kind transactions did not, directly originate from persons, entities or countries that are the target or subject of sanctions or any country embargoes, or knowingly associated with such persons, entities or countries, or otherwise in violation of applicable sanctions laws, in violation of any sanctions laws. In the event of a bitcoin in-kind transaction being suspected or determined to be in violation of certain applicable sanctions laws, the Prime Broker Agreement provides, among others, that the Prime Broker and its affiliates, including the Bitcoin Custodian, will (a) block or reject the deposit of such bitcoin into the Trust’s Trading Account, where required by applicable sanctions laws, and (b) agree to promptly inform the Trust if any fund movement between a Market Maker’s account at the Prime Broker and the Trust’s account(s) involves such bitcoin, so long as permitted by law. 3. Please revise to disclose whether and to what extent the Trust, Sponsor, Prime Broker, Bitcoin Custodian or any other entity is permitted to loan, pledge or rehypothecate any of the Trust’s assets. In response to the Staff’s comment, the Trust has revised the disclosure on pages 83 and 86 to clarify that the Bitcoin Custodian and the Prime Broker are not permitted to loan, pledge or rehypothecate any of the Trust’s assets. Under the Custodian Agreement, the Bitcoin Custodian is not permitted to loan, pledge, or rehypothecate any of the Trust’s assets in its Vault Balance, while under the Prime Broker Agreement, the Prime Broker is not permitted to loan, pledge, or rehypothecate any of the Trust’s assets in its Trading Balance without the Trust’s consent, which the Trust does not expect to grant. Additionally, the Trust supplementally advises the Staff that, as disclosed on page 87 of the prospectus, bitcoin credited to the Trust’s Trading Balance and Vault Balance are subject to a lien to secure unpaid Trade Credits extended to the Trust by the Trade Credit Lender. CLIFFORD CHANCE US LLP Mr. Justin Dobbie, Esq. Ms. Sonia Bednarowski, Esq. United States Securities and Exchange Commission December 4, 2023 Page 7 Cover Page 4. Please revise your cover page to disclose the termination date of the offering, if any, and disclose that you are registering an indeterminate number of Shares. In response to the Staff’s comment, the Trust has revised the cover page to disclose that the Trust is regis