Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 131

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 5
Chunk 131
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, one of the largest cryptocurrency exchanges in the world, filed for voluntary Chapter 11 bankruptcy
proceedings in the United States. As of the time of such bankruptcy filing, we deposited US$2.1 million and 480 units of Bitcoin
(with an equivalent value of US$7.7 million after re-measurement using the carrying value of Bitcoin as of December 31,
2022) in our account maintained at FTX. Since the uncertain result of the bankruptcy proceeding of FTX, we have reclassified those fund
and Bitcoin balances from cash or digital assets to custodian assets held by FTX and made full impairment on those balances. In 2024,
we entered into a settlement agreement with a third party and sold our recovery rights to this counterparty on the assets held by FTX,
recognizing a gain of US$7.3 million.

Impairment loss on mining equipment

We recognize impairment of
mining equipment when events or changes in circumstances indicate that the carrying amount may not be fully recoverable. During 2022,
our operating performance was adversely affected by the challenging business climate, which included a decrease in the price of Bitcoin
and a resulting decrease in the market price of miners. Furthermore, both primary and secondary market prices for ASIC miners of the type
used by us in our business operations experienced significant declines from previous levels. Based on the impairment assessment, a testing
indicated that the estimated fair value of the mining equipment was less than our net carrying value as of December 31, 2022 and
an impairment charge of US$11.9 million was recognized, decreasing the net carrying value of our mining equipment to their estimated
fair value. In 2023, we did not record an impairment loss on mining equipment. However, in 2024, an impairment loss of US$8.1 million
was recognized reflecting a decline in expected future cash flows due to the Bitcoin halving cycle that occurred in April 2024.

Impairment loss on digital assets

We recognize impairment loss
on digital assets in relation to Bitcoins held for our own account once an identical digital asset is bought and sold in the principal
market at a price below its carrying value. We recorded impairment loss on digital assets of US$12.9 million, US$7.0 million and
nil in 2022, 2023 and 2024, respectively whenever the fair value of the digital asset dropped against its carrying value.

Realized gain on sales of digital assets

We