Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 132

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 5
Chunk 132
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 accumulate Bitcoin mined
through its self-mining operation and exchange Bitcoin for fiat currencies at established cryptocurrency exchanges, such as Coinbase,
to satisfy its working capital needs from time to time. We also receive other digital assets, such as Bitcoin (BTC), Ethereum (ETH), Bitcoin
Cash (BCH) and Tether (USDT), as payments for its cloud mining service and hosting services. Digital assets that are received as service
payments would be converted into USDT and then U. S. dollars. The difference between the cost of the sold digital assets and the fair value
of the received digital assets in exchange or fiat currency is recognized as realized gain or loss on sales of digital assets on the Consolidated
Statements of Comprehensive Income. Realized gains or losses are recognized when digital assets are sold on an exchange for other digital
assets, or for cash consideration using a first-in first-out method of accounting. We recognized realized gain on sales of digital assets
of US$4.9 million, US$18.2 million and US$39.3 million in 2022, 2023 and 2024, respectively.

Unrealized fair value gain on digital assets

Following
the early adoption of Accounting Standards Update (“ ASU”) 2023-08, Accounting for and Disclosure of Crypto Assets, since January
1, 2024, digital assets held at period end are recorded at fair value, and changes in fair value are recognized in unrealized fair value
gain or loss of digital assets, in Operating expenses on the Consolidated Statements of Comprehensive Income, as of December 31, 2024
and for the year then ended. During the year, we also recognized a $37.6 million non-cash fair value gain on Bitcoin, under fair
value accounting rules. This gain reflects the favorable mark-to-market adjustment of Bitcoin prices in the year.

Taxation

We recorded income tax credit
of US$0.7 million in 2022, income tax expenses of US$2.2 million in 2023, and income tax expense of US$7.7 million in 2024.

Cayman Islands

We are an exempted company
incorporated in the Cayman Islands. The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or
appreciation. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties
which may be applicable on instruments executed in