Company: FLDDW
Filing Date: 2025-04-11
Form Type: 424B3
Source: 0001213900-25-031004
Chunk: 35

Company: Fold Holdings, Inc.
Filing Date: 2025-04-11
Form: 424B3
Chunk 35
---
olvency of one of our Bitcoin Service Providers.

Although we have implemented
various measures that are designed to mitigate our counterparty risks, including by storing substantially all of the bitcoin we own in
custody accounts at U.S.-based, institutional-grade custodians and negotiating contractual arrangements intended to establish that our
property interest in custodially-held bitcoin is not subject to claims of our custodians’ creditors, applicable insolvency law is
not fully developed with respect to the holding of digital assets in custodial accounts. Thus, Bitcoin held by us or our customers at
one of the Bitcoin Service Providers may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy of one
of the Bitcoin Service Providers. In addition, Bitcoin held on behalf of our customers could also be considered part of our own bankruptcy
estate if we were to become insolvent.

<div align='center'>17</div>

Bitcoin held in segregated wallets,
such as our proprietary bitcoin that is held by BitGo, could be viewed as less of a risk in an insolvency proceeding of the relevant Bitcoin
Service Provider. This is because it is possible to clearly identify the assets to which we have title, as opposed to where assets are
commingled with those of other holders. Bitcoin that we hold in self-custody is also stored in a separate m-of-n wallet for which we control
the majority of the private keys. We are able to directly confirm the contents of this self-custody wallet.

However, our Bitcoin Service
Providers do not currently offer segregated wallet services to our customers. This may cause our customers to view our bitcoin-related
services as more risky compared to other types of bitcoin products and services, and may cause our customers to withdraw bitcoin from
the wallet services we provide through the Bitcoin service providers.

If custodially-held bitcoin is
determined to be the property of a Bitcoin Service Provider’s bankruptcy estate, we and our customers could be treated as a general
unsecured creditor of such custodians, inhibiting our and our customers’ ability to exercise ownership rights with respect to such
bitcoin and potentially being required to share the value of our Bitcoin with those of other creditors of the Bitcoin Service Provider.
In addition, it is possible that a bankruptcy court would require all Bitcoin and other digital assets held by a custodian to be converted
into cash, which could result in our incurring significant capital gains tax charges. Even if we are able to prevent our and our customers’
bitcoin from