Company: HODL
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0000930413-25-003438
Chunk: 242

Company: VanEck Bitcoin ETF
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 1A
Chunk 242
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that operates on the Bitcoin Blockchain to obfuscate the origin, destination and counterparties of blockchain transactions, by
adding certain digital asset wallet addresses associated with Blender.io to its Specially Designated Nationals list. Blender.io
receives a variety of transactions and mixes them together before transmitting them to their ultimate destinations. On March 23,
2022, Lazarus Group, a state-sponsored cyber hacking group associated with North Korea, carried out a major virtual currency heist
from a blockchain project linked to the online game Axie Infinity; Blender.io was used in processing some of the illicit proceeds.
The U.S. Treasury Department’s press release announcing the sanctions on Blender.io observed that, while most virtual currency
activity is licit, virtual currency can be used for illicit activity, including sanctions evasion, through mixers, peer-to-peer
exchangers, darknet markets, and exchanges. This includes the facilitation of heists, ransomware schemes, and other cybercrimes.
On October 19, 2023, FinCEN published proposed rulemaking to apply the authorities in Section 311 of the USA PATRIOT Act to impose
requirements on financial institutions that engage in CVC transactions with CVC mixers. The proposed rule, if adopted, would require
covered financial institutions to report to FinCEN any CVC transactions they process that involves CVC mixing within or involving
a jurisdiction outside the United States. The term “CVC mixing” covers more than just transactions that involve CVC
mixers like Tornado Cash, and seemingly could cover a broader range of conduct involving technologies, services, or methods that
have the effect of obfuscating the source, destination, or amount of a CVC transaction, whether or not the obfuscation was intentional.
If the rule were to be adopted as proposed and if the Bitcoin Blockchain were to be deemed to or were to adopt features which come
within the rule’s ambit, it could cause covered financial institutions - such as many digital asset platforms, or the Trust’s
service providers, such as the Cash Custodian - to reduce support for or cease offering services for bitcoin or to the Trust, which
could impair the utility of bitcoin, the value of the Shares and the Trust’s ability to operate in compliance with new laws
and regulations.

Prices of bitcoin may be affected due to stablecoins (including Tether
and USDC), the activities of stablecoin issuers and their regulatory treatment.

While the Trust does not invest in stablecoins, it