Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 241

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 241
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 cash at Sutton Bank in accounts designated
as for the benefit of our customers. We have also entered into partnerships with third parties where our partners receive and hold customer
funds. Our customers open accounts directly with Fortress and/or BitGo to custody their Bitcoin and receive other Bitcoin-related services,
and directly with Sutton Bank to hold cash and receive other fiat-related services. Our and our financial partners’ abilities to
accurately hold customer cash and Bitcoin, as well as cash and Bitcoin we hold for our own investment and operating purposes, requires
a high level of internal controls. We are limited in our ability to influence or manage the controls and processes of third party partners
or vendors and may be dependent on our partners’ and vendors’ operations, liquidity and financial condition to manage these
risks. As we maintain, grow and expand our product and services offerings we also must scale and strengthen our internal controls and
processes, and monitor our third party partners’ and vendors’ ability to similarly scale and strengthen. Failure to do so
could adversely impact our business, operating results, and financial condition. This is important both to the actual controls and processes
and the public perception of the same.

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Any material failure by us or our partners to maintain
the necessary controls, policies, procedures or to manage the Bitcoin or cash we hold for our own investment and operating purposes could
also adversely impact our business, operating results, and financial condition. Further, any material failure by us or our partners to
maintain the necessary controls or to manage customer Bitcoin and funds appropriately and in compliance with applicable regulatory requirements
could result in reputational harm, litigation, regulatory enforcement actions, significant financial losses, lead customers to discontinue
or reduce their use of our and our partners’ products, and result in significant penalties and fines and additional restrictions,
which could adversely impact our business, operating results, and financial condition.

Our and our customers’ Bitcoin could be subject to risk
in the event of an insolvency of one of our Bitcoin Service Providers.

Although we have implemented various measures that
are designed to mitigate our counterparty risks, including by storing substantially all of the bitcoin we own in custody accounts at U.S.-based,
institutional-grade custodians and negotiating contractual arrangements intended to establish that our property interest in custodially-held
bitcoin is not subject to claims of our custodians’ creditors, applicable insolvency law is not fully developed with respect to
the holding of digital assets in custodial accounts. Thus, Bitcoin held by us