Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 64

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1
Chunk 64
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be a “security” under applicable federal securities laws, any distribution of such forked asset would expose the distributor
thereof to significant liability under such laws. For additional information regarding the risks and liabilities associated with uncertainty
regarding the status of bitcoin and other cryptocurrencies as a “security,” please see the risk factor above entitled “Bitcoin’s
status as a “security” in any relevant jurisdiction, as well as the status of our Bitcoin-related products and services, is
subject to a high degree of uncertainty and if we are unable to properly characterize a product or service offering, we may be subject
to regulatory scrutiny, inquiries, investigations, fines, 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,