Business Description

—Overview of Government Regulation ”; however, regulatory agencies may disagree with our position. Recent regulatory developments have heightened scrutiny over Crypto Asset transactions and staking rewards, and changes in regulations could materially impact our operations. • While blocks on a Blockchain are generally immutable, temporary forks or competing chains can arise during the validation process, especially concerning recent blocks. As a result, a block is often not considered irreversible until several additional blocks have been added. Occasionally, blocks with few confirmations may be dropped or modified, affecting the perceived permanence of transactions. • Although Blockchains are generally considered reliable, they are subject to certain attacks, including 51% attacks, double-spending, and vulnerabilities in smart contracts. New types of exploits, such as attacks targeting cross-chain bridges and DeFi platforms, have emerged. These vulnerabilities may lead to security breaches, the loss or theft of Crypto Assets, or a decline in their value. For more details, see the risk factor “ The Blockchains on which ownership of Crypto Assets are recorded and the Crypto Assets themselves may be the target of malicious cyberattacks or may contain exploitable flaws in their underlying code, which may result in security breaches, the loss or theft of Crypto Assets or the decline in value of Crypto Assets, including Portfolio Crypto Assets. ” • The software related to the Blockchains on which ownership of Crypto Assets is recorded may alter the incentive payments to Miners or Validators required to complete transactions, which could materially and adversely affect the transfer or storage of Crypto Assets. In addition, modifications to consensus algorithms, such as the transition from PoW to PoS, can reduce the number of Miners or Validators, potentially making the Blockchain more vulnerable to attacks. • Because the Blockchains on which ownership of Crypto Assets is recorded are public, they are exposed to malicious actors who may attempt to exploit weaknesses in the network. Security breaches, hacking incidents, or other malicious activities could result in significant losses or impairments of our holdings in Crypto Assets. Although solutions have been proposed and implemented to address these challenges, their effectiveness has not been proven. Further, unforeseen challenges may arise in the future that cannot be predicted. For example, advances in cryptography and/or technical advances, such as the development of quantum computing, could present risks to the Blockchains that record ownership of the Portfolio Crypto Assets by undermining the cryptographic consensus mechanism that underpins the Blockchain protocols. Additionally, legislative and regulatory agencies may prohibit the use of current and/or future cryptographic protocols which could limit the utility and value of Crypto Assets, including Portfolio Crypto Assets and, in turn, the value of the Shares. Recent regulatory actions and increased scrutiny by authorities have intensified the uncertainty surrounding Crypto Assets. Accordingly, the further development and future viability of Crypto Assets, including the Portfolio Crypto Assets, remain uncertain, and unknown challenges may prevent their wider adoption. The long-term viability and technological evolution of Crypto Assets and Blockchain technology are uncertain, and their development, acceptance, and adoption face significant industry-wide challenges, which could negatively impact the value of the Portfolio Crypto Assets and the Shares. Crypto Assets and the underlying Blockchain technology are relatively new and continuously evolving. There is significant uncertainty regarding their long-term viability, driven by factors such as economic conditions, inflation, regulatory developments, technological advancements, and consumer acceptance. The future growth and utility of Crypto Assets depend heavily on the continued adoption of Blockchain networks, but this growth remains uncertain due to various industry-wide 38 challenges. Any slowdown or cessation in the development, adoption, or acceptance of Blockchain technology could adversely affect the value of Crypto Assets, including Portfolio Crypto Assets, and, consequently, the Shares.…