Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 25

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 3
Chunk 25
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could result in a reduction in cryptocurrency prices. Cryptocurrency market prices depend, directly or indirectly, on the prices set on
exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges
for securities, derivatives and other currencies. For example, during the past three years, several cryptocurrency exchanges have
been closed or been sued due to fraud, business failure or security breaches. For instance, in November 2022, FTX Group cryptocurrency
exchange, one of the largest cryptocurrency exchanges in the world, filed for voluntary Chapter 11 bankruptcy proceedings in the
United States, following reports published just days earlier that FTX was facing liquidity challenges. As of the time of such
bankruptcy filing, we deposited US$2.1 million and 480 units of Bitcoins in our account maintained at FTX. Since the voluntary
bankruptcy proceeding of FTX, we have suspended our transactions with FTX. In many of aforementioned instances, the customers of the closed
exchanges are not compensated or made whole for the partial or complete losses of their account balances. As a result of the FTX bankruptcy
proceeding, we recorded impairment loss on assets held by FTX of US$9.8 million in 2022 (remeasured using the carrying value of Bitcoin
as of December 31, 2022). We did not record any impairment loss on assets held by FTX in 2023 and 2024. In addition, while smaller
exchanges are less likely to have the infrastructure and capitalization that provide larger exchanges with additional stability, larger
exchanges may be more likely to be appealing targets for hackers and malware and may be more likely to be targets of regulatory enforcement
action. In November 2023, Binance Holdings Limited (“ Binance”), the entity that operates the world’s largest cryptocurrency
exchange, Binance. com, pleaded guilty and agreed to pay over $4 billion to resolve the U. S. Justice Department’s investigation into
violations related to the Bank Secrecy Act (“ BSA”), failure to register as a money transmitting business, and the International
Emergency Economic Powers Act. Binance’s founder and chief executive officer also pleaded guilty to failing to maintain an effective
anti-money laundering program, in violation of the BSA and resigned as chief executive officer of Binance.

We have been and may continue to be
involved in legal and other disputes from time to time arising out of our operations,