Company: FLDDW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001013762-25-004107
Chunk: 257

Company: Fold Holdings, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 257
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 exploited to facilitate
illegal activity including fraud, sanctions violations, money laundering, gambling, tax evasion, and scams. We or our partners may be
specifically targeted by individuals seeking to conduct fraudulent transfers, and it may be difficult or impossible for us to detect and
avoid such transactions in certain circumstances. The use of our platform for illegal or improper purposes could subject us to claims,
individual and class action lawsuits, and government and regulatory investigations, prosecutions, enforcement actions, inquiries, or requests
that could result in liability and reputational harm for us. Moreover, certain activities that may be legal in one jurisdiction may be
illegal in another jurisdiction, and certain activities that are at one time legal may in the future be deemed illegal in the same jurisdiction.
As a result, there is significant uncertainty and cost associated with detecting and monitoring transactions for compliance with local
laws. In the event that a customer is found responsible for intentionally or inadvertently violating the laws in any jurisdiction or we
are found responsible for failure to prevent the use of our products or services for illegal activities, we may be subject to governmental
inquiries, enforcement actions, prosecuted, or otherwise held secondarily liable for aiding or facilitating such activities. Changes in
law have also increased the penalties for certain illegal activities, and government authorities may consider increased or additional
penalties from time to time. Any threatened or resulting claims could result in reputational harm, and any resulting liabilities, loss
of transaction volume, or increased costs could harm our business.

Moreover, while fiat currencies can be used to facilitate
illegal activities, Bitcoin is relatively new and, in many jurisdictions, may be lightly regulated or largely unregulated. Bitcoin has
characteristics, such as the speed with which digital currency transactions can be conducted, the ability to conduct transactions without
the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, the irreversible nature
of certain crypto asset transactions, and encryption technology that anonymizes these transactions, that make it susceptible to use in
illegal activity. U.S. federal and state and foreign regulatory authorities and law enforcement agencies, such as the Department
of Justice (“DOJ”), SEC, CFTC, FTC, or the Internal Revenue Service (“IRS”), and various state securities and
financial regulators have taken and continue to take legal action against persons and entities alleged to be engaged in fraudulent schemes
or other illicit activity involving Bitcoin.

While we believe that our risk management and compliance
framework is designed to detect significant illicit activities conducted by our potential or existing