Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 28

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 28
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, and many (including the U.S.) applying complex and
changing rules to mining, ownership, and trading.

In
the U.S., regulatory momentum has increased. In January 2025, President Trump issued an executive order to create a federal framework
for digital assets, and Congress has formed bipartisan working groups to pursue legislation on the topic. Discussions have included creating
a national digital asset reserve that could include Bitcoin, and multiple states have proposed similar reserves. While these developments
may ultimately bring more clarity, their outcomes remain uncertain.

Past
actions have shown that regulation can also become more restrictive. For example:

●In
                                            November 2022, New York banned new fossil fuel permits for proof-of-work mining.

●In
                                            January 2024, the SEC approved spot Bitcoin ETFs, leading to increased institutional adoption.

●In
                                            February 2024, the EIA launched, then suspended,
                                            a survey to monitor electricity use in crypto mining. The long-term regulatory impact of
                                            that effort remains unclear.

Although
some recent enforcement actions have been scaled back, future regulations—especially those targeting electricity use, financial
reporting, or market oversight—could increase our compliance burden, restrict our operations, or affect demand for our services.

Given
this uncertainty, we cannot predict how future laws or agency actions may impact our business. Even well-intentioned or positive regulatory
initiatives could have unintended consequences that negatively affect our operations, financial condition, or growth prospects.

Our
interactions with a blockchain may expose us to specially designated nationals (“SDNs”) or blocked persons and new legislation
or regulation could adversely impact our business or the market for cryptocurrencies.

The
Office of Financial Assets Control (“OFAC”) of the U.S. Department of Treasury requires us to comply with its sanction program
and not conduct business with persons named on its SDN list. However, because of the pseudonymous nature of blockchain transactions we
may inadvertently and without our knowledge engage in transactions with persons named on OFAC’s SDN list. Our policy prohibits
any transactions with such SDN individuals, but we may not be adequately capable of determining the ultimate identity of the individual
with whom we transact with respect to selling cryptocurrency assets. We are unable to predict the nature or extent of new and proposed
legislation and regulation affecting the cryptocurrency industry, or the potential impact of the use of cryptocurrencies by SDN or other
blocked or sanctioned persons, which could have material adverse effects on our business and our industry more