SecProbe.io

United States securities and exchange commission logo
December 13, 2023
Guillermo Trias
Chief Executive Officer/President of the Sponsor
Tidal Commodities Trust I
c/o Toroso Investments, LLC
234 West Florida Street, Suite 203
Milwaukee, WI 53204
Re:Tidal Commodities Trust I
Amendment No. 1 to Draft Registration Statement on Form S-1
Submitted November 14, 2023
CIK No. 0001985840
Dear Guillermo Trias:
            We have reviewed your amended draft registration statement and have the following
comments.
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR. If you do not believe a comment applies to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing the information you provide in response to this letter and your amended
draft registration statement or filed registration statement, we may have additional comments.
Amendment No. 1 to Draft Registration Statement on Form S-1
General
1.Please revise to describe the AML and KYC procedures conducted by the Fund and any
applicable service providers.
2.To the extent that you intend to use an updated fact sheet, please provide a copy for our
review.
3.Please provide us with an update on the status of any review being conducted by the NFA
and provide us with copies of any comments issued and your responses to those
comments.  Please also tell us whether there are any limitations, conditions or other
restrictions on your activities as a commodity pool as it relates to your intentions to hold a
mix of bitcoin and bitcoin futures.

 FirstName LastNameGuillermo Trias
 Comapany NameTidal Commodities Trust I
 December 13, 2023 Page 2
 FirstName LastNameGuillermo Trias
Tidal Commodities Trust I
December 13, 2023
Page 2
Prospectus Summary, page 1
4.Please revise to disclose here whether the Fund is a passive or active investment vehicle.
Please also disclose, if true, that the Fund, the Sponsor and the service providers will not
loan or pledge the Fund's assets, nor will the Fund's assets serve as collateral for any loan
or similar arrangement.
5.Please revise your disclosure here to provide quantitative information that demonstrates
the volatility of the price of bitcoin and Bitcoin Futures Contracts.
6.Please revise your disclosure here to address the risks associated with the competition you
will face in launching and sustaining your product, including the risk that your timing in
reaching the market and your fee structure relative to other bitcoin-related ETPs could
have a detrimental effect on the scale and sustainability of your product.
7.Please revise to disclose here to provide quantitative information that summarizes the
historical range between the NAV per share and price of Shares in the secondary market.
Similarly, please revise to provide quantitative information that summarizes the historical
range between the Benchmark and the NAV of the Fund.
The Benchmark Methodology, page 2
8.We note your disclosure on page 2 that the CIOC approves any material changes to the
methodology and reviews the Benchmark methodology at least on an annual basis.  Please
revise to disclose whether Shareholders will be notified of any material changes to the
Benchmark, and, if so, how.  In addition, please identify the Core Exchanges of the
Benchmark here.  In this regard, we note that you identify the Constituent Exchanges of
the CF Bitcoin Reference Rate on page 4 but do not identify the Benchmark Core
Exchanges.
Bitcoin Future Contracts, page 3
9.We note your disclosure on page 3 that you will invest in bitcoin, BTC Contracts and
MBT Contracts "to the extent necessary" to achieve exposure to the bitcoin futures
market.  Please clarify here what you mean by "to the extent necessary."  In addition,
please clarify what you mean by your statement that there is a December CME Bitcoin
Futures Contract "if there is only one contract expiring in December at that point in time."
The Fund's Investment Strategies, page 4
10.Please revise to disclose the number of BTC Contracts, MBT Contracts, bitcoin, cash and
cash equivalents that you hold as of the most recent practicable date, and revise to
describe your policies regarding (i) how you determine the percentage of Bitcoin Futures
Contracts and the percentage of bitcoin held by the Fund, (ii) the amount of cash and cash
equivalents held by the Fund and (iii) how often you engage in transactions to rebalance
the percentage of Bitcoin Futures Contracts and bitcoin held.

 FirstName LastNameGuillermo Trias
 Comapany NameTidal Commodities Trust I
 December 13, 2023 Page 3
 FirstName LastNameGuillermo Trias
Tidal Commodities Trust I
December 13, 2023
Page 3
11.Please revise to disclose the CME dynamic price fluctuation limits for Bitcoin Future
Contracts, and discuss how frequently such limits have historically been imposed.  In
addition, we note your disclosure on page 6 that "[i]f the CME halted trading in Bitcoin
Futures Contracts for other reasons, including if trading were halted for an entire trading
day or several trading days, the Fund would value its Bitcoin Futures Contracts by using
the settlement price that the CME publishes."  Please describe the price that the CME
would publish if the trading of Bitcoin Futures Contracts is halted.
The Fund's Investments in Bitcoin, page 7
12.Please revise to describe the "Investment Restrictions on Spot Bitcoin" and disclose your
Spot Bitcoin Limits, including quantification in dollars of those limits in recent periods in
order to provide context around how those limits may impact the composition of your
assets.  In addition, please revise to summarize here and describe in greater detail on page
53 the mechanics of how you purchase and sell bitcoin and Bitcoin Futures Contracts
in EFP transactions, including (i) whether you sell and purchase first to expire or second
to expire BTC Contracts and/or MBT Contracts, (ii) whether you use the CME's daily
settlement prices from the prior day as the reference price for the Bitcoin Futures
Contracts sold or purchased in the EFP transactions, and, if not, how and when you
calculate the reference price of the Bitcoin Futures Contracts, (iii) how and when you
calculate the reference price of the bitcoin sold or purchased in the EFP transactions, (iv)
whether you use the Direct Request for Quote available in the CME Direct, (v) the
mechanics of how the bitcoin is transferred in connection with the EFP transactions and
(vi) how the CME ensures that the EFP transactions are executed at "commercially
reasonable prices," including a description of what is deemed to be a commercially
reasonable price.  In this regard, we note your disclosure that you use the FBSP as the
reference price for the bitcoin and the settlement price as the reference for the Futures
Contracts and that all purchases or sales of bitcoin are settled on-chain.
13.Please describe how the Investment Restrictions on Spot Bitcoin mitigate the risk of
manipulation of the Shares of the Fund and the bitcoin spot market, and clarify how a
change of the SEC's view of the CME Bitcoin Futures market as a regulated market of
significant size, the NAV of the Fund and the prevailing trading conditions on the Core
Exchanges of the Benchmark impact the Investment Restrictions on Spot Bitcoin.
14.We note your reference here to executing bitcoin transactions in a "regulated
environment."  Please revise to clarify, if true, that these transactions do not take place on
a regulated exchange, and balance your disclosure by describing the relevant risks
involved.
The Offering, page 12
15.Your disclosure on page 13 that "[t]he Sponsor determines the value of the spot
bitcoin held by the Fund based on a methodology that is entirely derived from the
settlement prices of Bitcoin Futures Contracts on the CME and that [the Sponsor]

 FirstName LastNameGuillermo Trias
 Comapany NameTidal Commodities Trust I
 December 13, 2023 Page 4
 FirstName LastName
Guillermo Trias
Tidal Commodities Trust I
December 13, 2023
Page 4
considers all available facts and all available information on the valuation date" is
inconsistent with your disclosure regarding the Benchmark methodology.  Please revise
for clarity here so that investors understand how the spot bitcoin holdings and Bitcoin
Futures Holdings of the Fund are calculated for the purpose of determining the NAV and
the NAV per Share of the Fund in connection with creations and redemptions.
16.Please revise to disclose whether any of the expenses paid by the Sponsor are capped.  In
addition, your disclosure on page 13 that the "[g]eneral expenses of the Trust will be
allocated among the Fund and any future series of the Trust as determined by the Sponsor
in its discretion" and your disclosure on page 37 that the Sponsor has the authority to
"allocate expenses to and between the funds of the Trust" is inconsistent with your
disclosure on page 12 that "[t]he Trust has been formed and will be operated with the goal
that the Fund and any other series of the Trust will be liable only for obligations of such
series, and a series will not be responsible for or affected by any liabilities or losses of or
claims against any other series."  Please revise for clarity and consistency.
17.Please expand your summary of the Bitcoin Custodian to disclose the proportion of
private keys that will be held in hot or cold storage, whether the assets stored by the
Bitcoin Custodian will be commingled with assets of other customers and whether and to
what extent the Custodian carries insurance for any losses of the Fund's custodied bitcoin.
What are the Risk Factors Involved with an Investment in the Fund
Risks Related to Bitcoin and the Bitcoin Network, page 15
18.Please add risk factors addressing front-running and wash trading in the spot bitcoin
markets.
"Forks" in the Bitcoin Network could have adverse effects, page 16
19.Please revise to disclose the Fund's policies related to forks and air drops, the terms of the
Bitcoin Custodian's agreement that address forks and airdrops and whether the Sponsor
has provided any instructions to the Bitcoin Custodian regarding forks and air drops.
Rewards for mining bitcoin are designed to decline over time, page 17
20.Please expand this risk factor to describe the halving of bitcoin mining rewards, including
the timing of the halving events and quantitative information related to the historical,
current and future size of the bitcoin mining rewards.
Environmental risks from Bitcoin mining, page 21
21.Please expand this risk factor to address the reasons why bitcoin mining may implicate
different risks than other crypto asset mining such as the differences in proof-of-work and
proof-of-stake, and discuss the regulations that U.S. states and foreign jurisdictions have
passed or are currently considering that impact crypto asset mining.

 FirstName LastNameGuillermo Trias
 Comapany NameTidal Commodities Trust I
 December 13, 2023 Page 5
 FirstName LastName
Guillermo Trias
Tidal Commodities Trust I
December 13, 2023
Page 5
Risks Related to Lack of Liquidity
Authorized Purchasers' buying and selling activity, page 25
22.Your disclosure that Authorized Purchasers will purchase bitcoin in connection with
creation orders and sell bitcoin in connection with redemption orders is inconsistent with
your disclosure on page 32 and throughout that purchases and redemptions will be
transacted in cash rather than in-kind.  Similarly, in the second to last risk factor on page
32 you reference the Authorized Purchasers' ability to purchase and sell bitcoin in an
efficient manner to effectuate creation and redemption orders and in the last risk factor on
page 32 you state that Shares surrendered by Authorized Purchasers are redeemable in
exchange for the underlying amount of bitcoin.  Please revise as necessary.
Arbitrage transactions intended to keep the price of Shares, page 26
23.Please expand this risk factor to provide examples of "unanticipated difficulties" in
creations and redemptions.
Regulatory Risk, page 27
24.Please add risk factors and expand the risk factors in this subsection to identify and
discuss material legislation or regulation, including pending legislation or regulation,
related to bitcoin, the bitcoin market, crypto assets and the crypto asset markets in the U.S.
and in foreign jurisdictions.
There are technical and fundamental risks inherent in the trading system, page 30
25.Please revise to clarify the risks that this risk factor is addressing by explaining what you
mean by "other investment fund complex" and why the Sponsor's discontinuation in
activities related to "other investment fund complex" could adversely affect the Fund,
clarify what you mean by the quantitative models upon which the Sponsor's trading
systems are based and clarify the types of trading decisions you are addressing in this risk
factor.
The Fund could terminate at any time and cause liquidation, page 31
26.We note your disclosure on page 31 that "[i]f the Sponsor and the Fund are unable to raise
sufficient funds so that the expenses are reasonable in relation to the Fund's NAV, the
Fund may be forced to terminate, and investors may lose all or part of their investment."
Please revise to quantify or otherwise describe what "reasonable in relation to the Fund's
NAV" means.  In addition, we note your disclosure on page 36 that "[t]o the extent that
the Fund does not grow to or maintain a viable size, it may be liquidated, and the
expenses, timing and tax consequences of such liquidation may not be favorable to some
Shareholders."  Please revise to quantify or otherwise describe what a "viable size" means.

 FirstName LastNameGuillermo Trias
 Comapany NameTidal Commodities Trust I
 December 13, 2023 Page 6
 FirstName LastName
Guillermo Trias
Tidal Commodities Trust I
December 13, 2023
Page 6
Fund assets may be depleted if investment performance does not exceed fees, page 32
27.We note your disclosure on page 32 that "[i]n addition to certain fees paid to the Fund’s
service providers, the Fund pays the Sponsor a fee of 0.94% of assets under management
per annum, regardless of Fund performance."  Please identify the fees paid to the Fund's
service providers that are not paid by the Sponsor out of the Management Fee.
If a minimum number of Shares is outstanding, market makers may be less willing, page 33
28.Please revise this risk factor to disclose whether you have in the past halted redemptions
due to the number of Shares outstanding.  In this regard, we note that, according to your
website, on November 15, 2023, you had 50,000 Shares outstanding.
Potential Conflicts of Interest
The Sponsor's principals, officers or employees may trade bitcoin, page 37
29.Please expand this risk factor to include affiliates of the Sponsor, and disclose here that
the Administrator is an affiliate of the Sponsor.
Operation of the Fund, page 49
30.Please revise to reconcile your disclosure here that the Fund expects that the Fund’s assets
will be used to invest in Bitcoin Futures Contracts and cash and cash equivalents with the
disclosure throughout the prospectus that the Fund also intends to use its assets to invest in
bitcoin.
The Offering
The Fund's Investments in Spot Bitcoin
Custody of Bitcoin, page 54
31.Please revise to describe the material terms of the Fund's agreement with the
Bitcoin Custodian, including the term and a detailed description of the termination
provisions that includes quantitative information regarding the "applicable notice" to the
Fund and to the Sponsor in connection with the Bitcoin Custodian's decision to terminate
the BitGo Agreement for cause, the "applicable notice" to the Bitcoin Custodian should
the Sponsor choose to terminate the agreement and the termination fee that the Sponsor
must pay in connection with terminating the a