Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 61

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1
Chunk 61
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 have a private and public key pair associated with a network address, commonly referred to as a “wallet.” Each
wallet is associated with a unique “public key” and “private key” pair, each of which is a large number. To send
Bitcoin on the Bitcoin blockchain, a user must sign a transaction that is created using the private key of the wallet from where the user
is transferring Bitcoin, a hash of the recipient wallet’s public key, the amount of Bitcoin to be sent, and the transaction fee.
The transaction must be signed using the user’s private key through a cryptographic process, which creates a digital signature to
prove ownership of the Bitcoin. Once signed, the transaction is broadcasted to the Bitcoin network to be included in a new block by miners.
If we wish to purchase Bitcoin, the seller would need to send a transaction to our designated wallet in this manner. A number of errors
can occur in the process of transmitting Bitcoin, such as typos, mistakes, or the failure to include the information required by the blockchain
network, which could result in losses of our proprietary Bitcoin or, where our customers choose to transfer and use Bitcoin on its underlying
blockchain network, the Bitcoin held by us on behalf of our customers. For instance, a customer may incorrectly enter our crypto custody
partner’s wallet’s address or the desired recipient’s public key when depositing and withdrawing Bitcoin, respectively.
Alternatively, a customer may send Bitcoin to a wallet address that the customer does not own, control or hold the private keys to. If
any of the foregoing errors occur, all of the Bitcoin sent by the customer will be permanently and irretrievably lost with no means of
recovery. We have encountered and expect to continue to encounter similar incidents with our customers, and although we have not experienced
such incidents with respect to Bitcoin that we hold on a proprietary basis it is possible that they could occur in the future. Such incidents
could result in customer disputes, damage to our brand and reputation, legal claims against us, and financial liabilities, any of which
could adversely affect our business.

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BitGo has represented that they will safekeep all
Bitcoin held in custody by them, and that they have procedures to process redemptions and withdrawals expeditiously, following the terms
of the applicable user agreements. Our customers have not experienced excessive redemptions or withdrawals, or prolonged suspended redemptions
or withdrawals, of Bitcoin to date. However, similar to traditional financial institutions, our Bitcoin Service Providers may