Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 109

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 4
Chunk 109
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 other penalties if such digital asset is deemed to be dealing with “security,” which may adversely affect our business,
financial condition and results of operations.” We recognize that whether a digital asset is a security is a complex and evolving
legal issue. For that reason, we have no plan in the foreseeable future to mine anything other than digital assets that are generally
not considered as “securities.” However, if our compliance procedures and legal reviews prove to be incorrect, we may be subject
to prohibitive SEC penalties and/or private lawsuit defense costs and adverse rulings.

Research and Development

We invested significant time,
resources and expenses into the research and development of our services. In particular, we designed and implemented the Aladdin system
to handle ultra-large scale management and dispatching of hash calculations. The Aladdin system has the maximum capacity to simultaneously
connect millions of miners and to provide services that resolve critical mining problems arising from scalability, efficiency, authenticity,
and securing hash power.

The Aladdin system consists
of three major components, including (i) the miner monitoring system, namely FuFu Sentry, (ii) the mining capacity slicing system,
namely FuFu Proxy System, and (iii) the hash calculation dispatching engine, namely FuFu Dispatcher Engine. FuFu Sentry provides
real-time monitoring, system alerts, data insights and automated operation functions, which allow our users to efficiently control
the hash calculation status and facilitate their decision-making. FuFu Proxy System connects the miners and mining pools and is able to
accurately submit the hash calculations of each miner to the mining pool, which enhances the precision of mining capacity slicing and
transparency of hash calculation distribution. FuFu Dispatcher Engine distributes the protocols that apply the hash calculations and ensures
the stable operation of the protocols.

Our leadership position in
the global could-mining market is the result, in part, of our committed research and development activities. We are increasingly focused
on research and development, and have increased compensation to our research and development staff, and other personnel performing related
functions since 2021, resulting an increase in our research and development expenses from US$1.6 million in 2022 to US$1.7 million
in 2023 and further to US$5.6 million in 2024.

Sales and Marketing

We market our cloud-mining and
hosting solutions primarily through word of mouth, press releases of our solutions and major collaboration with leading industry participants.
We also advertise our available solutions and hosting capacity on our website, which is