Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 40

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 3
Chunk 40
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 the digital asset industry have declared bankruptcy, including
Core Scientific, Celsius, Voyager Digital, Three Arrows Capital, BlockFi, FTX, and Genesis Holdco. Those bankruptcy proceedings contributed,
at least in part, to cause price decreases in Bitcoin observed during those periods, a loss of confidence in the participants of the digital
asset ecosystem and negative publicity surrounding the digital asset industry. In particular, negative publicity surrounding the digital
asset industry may cause investors and customers to lose confidence and trust in digital asset mining and companies and digital asset
exchanges, or the use of digital assets in general. As of the time of FTX’s bankruptcy filing, we deposited US$2.1 million
and 480 units of Bitcoins in our account maintained at FTX. As a result of the FTX bankruptcy proceeding, we recorded full impairment
loss on the assets held by FTX of US$9.8 million (remeasured using the carrying value of Bitcoin as of December 31, 2022) in
2022. In 2024, we entered into a settlement agreement with a third party and sold to this counterparty our recovery rights on the assets
held by FTX. Although we are not directly connected to these recent market events, we may still suffer reputational harm due to our association
with the digital asset industry in general and our past transaction with FTX in particular. Such reputational harm may adversely affect
our business, reputation, financial condition and results of operations.

Digital asset exchanges and wallets, and
to a lesser extent, the digital asset network itself, may suffer from hacking and fraud risks, which may adversely erode user confidence
in digital assets, which would decrease the demand for our services and products.

Digital asset transactions,
as with any virtual system, are subject to risks from hackers, malware and operational glitches. Hackers can target digital asset exchanges
and transactions to gain access to thousands of accounts and digital wallets where digital assets are stored. Digital asset transactions
and accounts are not insured by any type of government program and all digital asset transactions are permanent because there is no third
party or payment processor. Digital assets have suffered from hacking and cyber-theft as such incidents have been reported by several
digital asset exchanges and miners, highlighting concerns about the security of digital assets and therefore affecting its demand and
price. Also, the price and exchange of digital assets may be affected due to fraud risk. While digital asset uses private key encryption
to verify owners and register transactions, fraudsters and scammers