Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 66

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1
Chunk 66
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 in addition
to other administrative guidance on tax information reporting in connection with the IIJA (the “IIJA Regulations”) for reporting
transactions with respect to digital assets became effective. The IIJA Regulations introduce new rules related to our tax reporting and
withholding obligations on our customer transactions in ways that differ from our existing compliance protocols and there is risk that
we will not have proper records to ensure compliance for certain legacy customers or transactions. If the IRS determines that we are not
in compliance with our tax reporting or withholding requirements with respect to customer Bitcoin transactions, we may be exposed to significant
taxes and penalties, which could adversely affect our financial position. The IIJA Regulations will require us to invest substantially
in new compliance measures and that may require significant retroactive compliance efforts, which also could adversely affect our financial
position. Further, additional guidance may be issued, including, guidance on the treatment of non-custodial parties, which could impose
additional compliance efforts, and which would adversely affect our financial position.

39

Similarly, it is likely that new rules for reporting
crypto assets under the global “common reporting standard” as well as the “crypto-asset reporting framework” will
be implemented on our international operations, creating new obligations and a need to invest in new onboarding and reporting infrastructure.
Such rules are under discussion today by the member and observer states of the “Organization for Economic Cooperation and Development”
and by the European Commission on behalf of the member states of the European Union. These new rules may give rise to potential liabilities
or disclosure requirements for prior customer arrangements and new rules that affect how we onboard our customers and report their transactions
to taxing authorities. Additionally, the European Union has issued directives, commonly referred to as “CESOP” (the Central
Electronic System of Payment information), requiring payment service providers in the European Union to report cross-border fiat transactions
to taxing authorities on a quarterly basis beginning in January 2024. Any actual or perceived failure by us to comply with the above
or any other emerging tax regulations that apply to our operations could harm our business.

The nature of our business requires the application of complex
financial accounting rules, and there is limited guidance from accounting standard setting bodies on certain topics. If financial accounting
standards undergo significant changes, our operating results could be adversely affected.

The accounting rules and regulations that we must
comply with are complex and subject to interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC, and
various other bodies formed