CIFRCipher Digital

Please represent to us that you will include in future filings qualitative and quantitative information necessary to understand the estimation uncertainty and the impact your critical accounting estimates have had or are reasonably likely to have on your financial condition and results of operations.

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Your disclosure should explain why each critical accounting estimate is subject to uncertainty and, to the extent the information is material and reasonably available, discuss how much each estimate and/or assumption has changed over a relevant period and the sensitivity of reported amounts to the underlying methods, assumptions and estimates used, to the extent applicable. The disclosures should supplement, not duplicate, the description of accounting policies or other disclosures in the notes to the financial statements. Refer to Item 303(b)(3) of Regulation S-K and SEC Release No. 33-10890.

The Company respectfully acknowledges the Staff’s comment and represents that it will include in future filings supplemental qualitative and quantitative information necessary to understand the estimation uncertainty and the impact critical accounting estimates have had or are reasonably likely to have on its financial condition and results of operations, including why each critical accounting estimate is subject to uncertainty, and to the extent material and reasonably available, how much the estimate and/or assumption has changed over the relevant period and sensitivity of the reported

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amounts to the underlying assumptions and estimates used, to the extent applicable.

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Please respond to the following with respect to your revenue recognition policy under ASC 606 and in future filings make any applicable revisions to your disclosures: • You disclose that the contract is terminable at any time by either party with no substantive termination penalty and the contract term is 24 hours.

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Tell us your consideration of whether the duration of the contract for accounting purposes is less than 24 hours because the contract continuously renews throughout the day. If you agree, revise your accounting policy to state this. If you disagree, tell us why considering that each decision to not terminate appears to create a new contract for accounting purposes. Refer to Question 7 of the FASB Revenue Recognition Implementation Q&As. • You disclose that you recognize revenue over the contract term as hashrate is provided. ASC 606-10-25-23 indicates that recognition occurs upon the transfer of control of the service. Tell us your consideration of whether you recognize revenue on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception and revise your disclosure accordingly. • You disclose that you measure the noncash consideration at fair value at contract inception. Revise your disclosure in future filings to indicate the specific time that you measure the noncash consideration recognized at the Bitcoin spot price, i.e., whether it is at the beginning of the 24-hour period used to determine contract payments (midnight UTC time). In addition, assuming that continuous renewal throughout the day results in multiple accounting contracts, revise your disclosure in future filings to indicate that the time that noncash consideration is recognized is on the date of contract inception, consistent with the guidance in ASC 606-1032-21.

The Company respectfully acknowledges the Staff’s comment. The Company has reviewed Question

7 of the FASB Revenue Recognition Implementation Q&As and concluded that the mining pool contracts align with Example 1 of such Question, where the contract can be terminated by each party at any time without compensating the other party for the termination, other than paying amounts due as a result of goods and services transferred up to the termination date.

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In future filings, the Company will revise its disclosures to reflect that the duration of the contract for accounting purposes is less than 24 hours because the contract continuously renews throughout the day.

You disclose that you recognize revenue over the contract term as hashrate is provided. ASC 606-10-25-23 indicates that recognition occurs upon the transfer of control of the service. Tell us your consideration of whether you recognize revenue on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception and revise your disclosure accordingly.

Response: The Company respectfully acknowledges the Staff’s comment. The Company recognizes revenue on the same day that control of the contracted service of providing hashrate transfers to the mining pool operator, which is the same as the contract inception. In future filings, the Company will revise its disclosures to clarify that the transfer of control is deemed to occur as hashrate is provided.

You disclose that you measure the noncash consideration at fair value at contract inception. Revise your disclosure in future filings to indicate the specific time that you measure the noncash consideration recognized at the Bitcoin spot price, i.e., whether it is at the beginning of the 24-hour period used to determine contract payments (midnight UTC time). In addition, assuming that continuous renewal throughout the day results in multiple accounting contracts, revise your disclosure in future filings to indicate that the time that noncash consideration is recognized is on the date of contract inception, consistent with the guidance in ASC 606-10-32-21.

Response: The Company respectfully acknowledges the Staff’s comment and in future filings will update its disclosures to indicate that the noncash consideration is recognized at 0:00:00 UTC daily on the date of contract inception.

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You refer to Note 1. Organization for information regarding out-of-period adjustments you recorded during the year ended December 31, 2023, which affected cost of power, power sales, net operating loss and net loss. We are unable to find the referenced disclosure. Please tell us the nature and amount of these adjustments and how you considered the disclosures required, if any, in ASC 250.

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Refer to SAB Topic 1.M and 1.N. Note 7. Investment in Equity Investees, page F-23 We note that you account for your 49% equity interests of the three Data Center LLCs under the equity method of accounting. Please address the following comments: • Given that you operate these LLCs as indicated on page 1 and elsewhere, please provide us your analysis as to why you do not consolidate these entities. As part of your response, specifically tell us whether each of the underlying LLCs are variable interest entities as well as whether they are similar to limited partnerships in the context of ASC 810-10-05-3 and explain why or why not. 4. • Regardless of whether consolidation or equity method accounting is appropriate, provide us your analysis supporting your determination to not impair the miners contributed to the LLCs before they were contributed as part of your investments in the LLCs. • Assuming that equity method accounting for your investments with no impairment of miners before being contributed is appropriate, explain to us why there is a basis difference upon contribution of the miners. Elaborate on why the LLCs recorded the contributed miners at your historical cost and not at their fair value.

The Company respectfully acknowledges the Staff’s comment. Cost of revenue and power sales for the year ended

December 31, 2023 included out-of-period adjustments of approximately $2.0 million and $1.6 million, respectively, that increased both cost of revenue and power sales on the condensed consolidated statements of operations for the year ended December 31, 2023, and resulted in net increases to operating loss and loss before taxes of approximately $0.4 million during the same period.

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These out-of-period adjustments related to power costs and power sales for the year ended December 31, 2022, which are invoiced on a net basis by the Company’s power provider. Management evaluated the impact of this error on the Company’s previously issued audited consolidated financial statements for the year ended December 31, 2022, as well as on its audited consolidated financial statements for the year ended December 31, 2023, assessing the error both quantitatively and qualitatively, and concluded that the error was not material to the financial statements for either period. These out-of-period adjustments were disclosed in Note 1. Organization of the notes to the condensed consolidated financial statements included in each of the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2024.

According to ASC 250-10-50-8, when prior period adjustments are recorded, the resulting effects shall be disclosed in the annual report for the year in which the adjustments are made and in interim reports issued during that year after the date of recording the adjustments. Therefore, the Company removed the disclosure for the annual period ended December 31, 2024.

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