Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 285

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 285
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, losses or costs to remediate any of the deficiencies, customer
dissatisfaction, reputational damage, legal or regulatory proceedings, or other adverse consequences which could harm our business.

48

We rely on our agreements with Fortress and BitGo to offer our
Bitcoin-related services. If our relationship with either Fortress or BitGo were to end, the ability to continue to offer our Bitcoin
services would be affected, which could affect our financial and business results.

We market certain Bitcoin services offered or supported
by the Bitcoin Service Providers to consumers through program agreements with the Bitcoin Service Providers. Fold utilizes both Fortress
and BitGo for the purpose of providing operational redundancy in the event of technical or regulatory limitations at one or the other.
In addition, certain states are supported by only one of the two Bitcoin Service Providers, and those states can change from time to time
based on the licensing status of each provider. If our relationship with one of the Bitcoin Service Providers were to end, or if either
of the Bitcoin Service Providers were to restrict or cease operations, our ability to continue to offer Bitcoin services would be affected,
which could adversely affect our financial and business results. In such an event, we may need to partner with a different financial institution
with authority to provide services substantially similar to our Bitcoin services to continue to offer these services. If we partner with
a new crypto service provider, our Bitcoin-related services would be disrupted and delayed as customers would be required to open new
accounts with a different Bitcoin service provider, and as we transition connectivity of our information technology systems to such different
financial institution partner. We also may face increased costs and compliance burdens if our program agreement with one of the Bitcoin
Service Providers is terminated. We entered into our agreement with Fortress in June, 2023, whereby Fortress would custody Bitcoin on
behalf of our customers itself or use BitGo as a sub-custodian in states where BitGo was not authorized to provide custody services directly.
In August, 2024, we entered into an agreement directly with BitGo, and we anticipate that over time more of our customers will be serviced
under this direct relationship with BitGo.

Fortress is subject to regulation and supervision
by the Division of Financial Institutions of the Nevada Department of Business and Industry, and BitGo is subject to regulation and supervision
by the Division of Banking of the South Dakota Department of Labor and Regulation. In addition, certain custodial services are provided
by BitGo’s affiliate BitGo New York Trust Company LLC, which is