Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 263

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 263
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 and within the terms of an applicable user agreement
or otherwise communicated by us, we may experience increased customer complaints and damage to our brand and reputation and face additional
regulatory scrutiny, any of which could adversely affect our business.

A temporary or permanent blockchain “fork” to Bitcoin
could adversely affect our business.

Blockchain protocols, including Bitcoin, are open
source. Any user can download the software, modify it, and then propose that Bitcoin users and miners adopt the modification. When a modification
is introduced and a substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin protocol
network remains uninterrupted. However, if less than a substantial majority of users and miners consent to the proposed modification,
and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork”
(i.e., “split”) of the impacted blockchain protocol network and respective blockchain, with one prong running the pre-modified
software and the other running the modified software. The effect of such a fork would be the existence of two parallel versions of the
Bitcoin protocols running simultaneously, but with each split network’s Bitcoin lacking interchangeability.

Bitcoin has previously been subject to “forks”
that resulted in the creation of new networks, including Bitcoin Cash ABC, Bitcoin Cash SV, Bitcoin Diamond, Bitcoin Gold, and others.
Some of these forks have caused fragmentation among platforms as to the correct naming convention for forked crypto assets. Due to the
lack of a central registry or rulemaking body, no single entity has the ability to dictate the nomenclature of forked crypto assets, causing
disagreements and a lack of uniformity among platforms on the nomenclature of forked crypto assets, and which results in further confusion
to customers as to the nature of assets they hold on platforms. In addition, several of these forks were contentious and as a result,
participants in certain communities may harbor ill will towards other communities. As a result, certain community members may take actions
that adversely impact the use, adoption, and price of Bitcoin.

Future forks may occur at any time. A fork can lead
to a disruption of networks and our information technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any
of which can further lead to temporary or even permanent loss of our and our customers’ assets. In addition, our Bitcoin Service
Providers have the right to temporarily suspend their services in the event of a fork, and to determine not to support any particular