Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 22

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 3
Chunk 22
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 of operations.

We rely on third-party service
providers to safeguard and manage certain digital assets. Loss of private keys, security breach and hacking attempts could cause the loss
and theft of such digital assets, and materially and adversely impact our business, financial condition and results of operations.

We accumulate Bitcoin mined
through our self-mining operations, and will exchange Bitcoin for fiat currencies at established cryptocurrency exchanges, such as
Coinbase, to satisfy our working capital needs. We also receive other digital assets, such as BTC, ETH, BCH and USDT, as payments for
our cloud-mining service and hosting services. Digital assets that are received as service payments would be automatically converted into
USDT. Since October 2022, we have begun to convert USDT into U. S. dollars and deposit them with banking institutions on a timely
basis according to our treasury management strategy. Prior to December 2022, we held digital assets pre-paid by customers for
their anticipated purchase of services, and temporarily held mining rewards of customers on their behalf if such customers do not have
their own digital asset wallets.

Digital assets held for customers
are stored at custodial wallets maintained by Coinbase and Cobo Wallet, which protect such digital assets through dual authentication
security mechanism. Currently, most of digital assets mined by us are held in cold wallet, which is a physical device that holds digital
assets offline and aims to prevent hackers from being able to access digital assets via traditional internet-hacking means. The digital
assets temporarily held on customers’ behalf and for our own account are not insured or guaranteed by any government or government
agency.

Since December 2022,
we no longer temporarily held digital assets for our customers. As of December 31, 2024, we held 3.77 Bitcoins and approximately 16,970
USDTs that are to be returned to our customers, excluding 225 Bitcoins pledged by our customers as collateral to secure credit from us.
To the extent that customers’ digital assets still remain in custodial wallets maintained by Coinbase and Cobo Wallet, we rely on
such service providers to safeguard such customers’ digital assets. The security measures designed to prevent, detect, and mitigate
inappropriate access to these custodial wallets by internal or external threats may not be adequate to protect against loss of digital
assets due to theft or security leakage. It is possible that employees or service providers could act contrary to our policies, or others
could circumvent security measures of us or our service providers to improperly access our