Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 226

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 226
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 the FDIC, have recently increased their scrutiny of bank partnerships with third-party financial service providers through the
release of statements, requests for information and proposed regulations. These releases have coincided with a significant increase in
the number of enforcement actions relating to banks’ third-party arrangements. These and other regulatory initiatives by U.S. federal
or state prudential banking regulators may constrain the operations of our partner banks in the United States, including those with which
we may partner in the future either in addition to or in lieu of our existing arrangements. Such banks may be prohibited from partnering
with us, or may terminate our relationship once established, as a result of increased regulatory scrutiny or changes to applicable laws
and regulations.

Our relationship with partner banks may also subject
us to additional regulatory scrutiny, requirements and supervision. For example, we are subject to audit by Sutton Bank in accordance
with FDIC guidance related to management of vendors. We also may be subject to the examination authority of the FDIC under the Bank Service
Company Act as a result of our relationship with Sutton Bank. To the extent that we enter into similar relationships with other partner
banks, either in lieu of or in addition to our relationship with Sutton Bank, we may become subject to additional regulatory requirements
imposed indirectly by the partner bank or directly by U.S. federal or state prudential banking regulators. Additional regulatory requirements
may adversely affect us or our bank partners, including our originating bank partners, and, therefore, our business, results of operations,
financial condition and future prospects.

We may be subject to additional regulatory scrutiny due to the
recent bankruptcy case of Synapse Financial Technologies, Inc.

Fold, through its partnership with Sutton Bank (and/or
any other partner banks), may provide deposit accounts to Fold’s customers. Sutton Bank (and/or any other partner banks) may hold
funds in the deposit account in an omnibus account on behalf of customers. In certain circumstances, Sutton Bank (and/or any other partner
banks) may rely on our records for identifying customers and reconciling certain transactions made to or from deposit accounts, including
any comingled funds within the omnibus account. Any failure by us to maintain complete and accurate records could create uncertainty as
to fund attribution and cause delays or outages for customers seeking to withdraw funds from or through our platform.

Certain U.S. federal and state prudential banking
regulators have cited the recent bankruptcy case of Synapse Financial Technologies, Inc. in connection with related proposed regulatory
initi