Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 199

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 199
---
C announced a settlement with Tether’s operators, Tether Holdings
Limited, Tether Operations Limited, Tether Limited, and Tether

40 

International Limited, in which they agreed
to pay $42.5 million in fines to settle charges that, among others, Tether’s claims that it maintained sufficient U.S. dollar
reserves to back every Tether stablecoin in circulation with the “equivalent amount of corresponding fiat currency”
held by Tether were untrue. Bitfinex also agreed to pay the CFTC a $1.5 million fine to settle charges that Bitfinex offered off-exchange
leveraged, margined, or financed transactions involving cryptocurrencies, including bitcoin, with U.S. customers who were not
eligible contract participants and accepted funds (including in the form of Tether stablecoins) and orders in connection with
such illegal off-exchange transactions, triggering an obligation to register with the CFTC, which the CFTC order asserts it violated.
The CFTC previously fined Bitfinex in 2016 on similar charges.

USDC is a reserve-backed stablecoin issued
by Circle Internet Financial that is commonly used as a method of payment in digital asset markets, including the bitcoin market.
While USDC is designed to maintain a stable value at 1 U.S. dollar at all times, on March 10, 2023, the value of USDC fell below
$1.00 for multiple days after Circle Internet Financial disclosed that US$3.3 billion of the USDC reserves were held at Silicon
Valley Bank, which had entered Federal Deposit Insurance Corporation (“FDIC”) receivership earlier that day. Stablecoins
are reliant on the U.S. banking system and U.S. treasuries, and the failure of either to function normally could impede the function
of stablecoins, and therefore could adversely affect the value of the Shares.

Given the foundational role that stablecoins
play in global digital asset markets, their fundamental liquidity can have a dramatic impact on the broader digital asset market,
including the market for bitcoin. Because a large portion of the digital asset market still depends on stablecoins such as Tether
and USDC, there is a risk that a disorderly de-pegging or a run on Tether or USDC could lead to dramatic market volatility in
digital assets more broadly. Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that
prevent settlement), concerns about the sufficiency of