Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 265

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 265
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, and other penalties, which may adversely affect our business, operating results,
and financial condition.”

38

Future developments regarding the treatment of crypto assets
for U.S. and foreign tax purposes could adversely impact our business.

Due to the new and evolving nature of crypto assets
and the absence of comprehensive legal and tax guidance with respect to crypto asset products and transactions, many significant aspects
of the U.S. and foreign tax treatment of transactions involving crypto assets, such as the purchase and sale of Bitcoin on our platform,
are uncertain, and it is unclear whether, when and what guidance may be issued in the future on the treatment of crypto asset transactions
for U.S. and foreign tax purposes.

In 2014, the IRS released Notice 2014-21, discussing
certain aspects of “virtual currency” for U.S. federal income tax purposes and, in particular, stating that such virtual
currency (i) is “property,” (ii) is not “currency” for purposes of the rules relating to foreign currency
gain or loss, and (iii) may be held as a capital asset. From time to time, the IRS has released other notices and rulings relating
to the tax treatment of virtual currency or crypto assets reflecting the IRS’s position on certain issues. The IRS has not addressed
many other significant aspects of the U.S. federal income tax treatment of crypto assets and related transactions.

There continues to be uncertainty with respect to
the timing, character and amount of income inclusions for various crypto asset transactions. Although we believe our treatment of Bitcoin
transactions for federal income tax purposes is consistent with existing positions from the IRS and/or existing U.S. federal income
tax principles, because of the rapidly evolving nature of crypto asset innovations and the increasing variety and complexity of crypto
asset transactions and products, it is possible the IRS and various U.S. states may disagree with our treatment of certain Bitcoin
offerings for U.S. tax purposes, which could adversely affect our customers and the vitality of our business. Similar uncertainties
exist in the foreign markets in which we operate with respect to direct and indirect taxes, and these uncertainties and potential adverse
interpretations of tax law could impact the amount of tax we and our non-U.S. customers are required to pay, and the vitality of
our platforms outside of the United States.

There can be no assurance that the IRS, the U.S. state
revenue agencies or other foreign