{"url_path":"/sec/hodl/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors.**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1838028/0000930413-26-001608-index.html","accession_number":"0000930413-26-001608","cik":"0001838028","ticker":"HODL","issuer_name":"VanEck Bitcoin ETF","edgar_url":"https://www.sec.gov/Archives/edgar/data/1838028/0000930413-26-001608-index.html","primary_entity_key":"0001838028","primary_entity_name":"VanEck Bitcoin ETF"},"word_count":2563,"has_tables":true,"body_markdown":"**Item 1A. Risk Factors.**\n\n \n\n*Digital Asset Markets In The United States Exist In A State\nOf Regulatory Uncertainty, And Adverse Legislative Or Regulatory Developments Could Significantly Harm The Value Of Bitcoin Or\nThe Shares, Such As By Banning, Restricting Or Imposing Onerous Conditions Or Prohibitions On The Use Of Bitcoins, Mining Activity,\nDigital Wallets, The Provision Of Services Related To Trading And Providing Custody Services For Bitcoin, The Operation Of The\nBitcoin Network, Or The Digital Asset Markets Generally*\n\n \n\nThere is a lack of consensus regarding\nthe regulation of digital assets, including bitcoin, and their markets. As a result of the growth in the size of the digital asset\nmarket, as well as the 2022 Events, the U.S. Congress and a number of U.S. federal and state agencies (including FinCEN, SEC, Office\nof the Comptroller of the Currency (the “OCC”), CFTC, FINRA, the Consumer Financial Protection Bureau (“CFPB”),\nthe Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the Internal Revenue Service\n(“IRS”), state financial institution regulators, and others) have been examining the operations of digital asset networks,\ndigital asset users and the digital asset markets. Many of these state and federal agencies have brought enforcement actions or\nissued consumer advisories regarding the risks posed by digital assets to investors. Ongoing and future regulatory actions with\nrespect to digital assets generally or bitcoin in particular may alter, perhaps to a materially adverse extent, the nature of an\ninvestment in the Shares or the ability of the Trust to continue to operate.\n\n \n\nThe 2022 Events, including among others\nthe bankruptcy filings of FTX and its subsidiaries, Three Arrows Capital, Celsius Network, Voyager Digital, Genesis, BlockFi and\nothers, and other developments in the digital asset markets, have resulted in calls for heightened scrutiny and regulation of the\ndigital asset industry, with a specific focus on intermediaries such as digital asset platforms, platforms, and custodians. Federal\nand state legislatures and regulatory agencies may introduce and enact new laws and regulations to regulate crypto asset intermediaries,\nsuch as digital asset platforms and custodians. The March 2023 collapses of Silicon Valley Bank, Silvergate Bank, and Signature\nBank, which in some cases provided services to the digital asset industry, may amplify and/or accelerate these trends.\n\n \n\nU.S. federal and state regulators, as well\nas the White House, have issued reports and releases concerning crypto assets, including bitcoin and crypto asset markets. Further,\nin 2023 the House of Representatives formed two new subcommittees: the Digital Assets, Financial Technology and Inclusion Subcommittee\nand the Commodity Markets, Digital Assets, and Rural Development Subcommittee, each of which were formed in part to analyze issues\nconcerning crypto assets and demonstrate a legislative intent to develop and consider the adoption of federal legislation designed\nto address the perceived need for regulation of and concerns surrounding the crypto industry. However, the extent and content of\nany forthcoming laws and regulations are not yet ascertainable with certainty, and it may not be ascertainable in the near future.\nWe cannot predict how these and other related events will affect us or the crypto asset business.\n\n \n\nThere remains substantial uncertainty regarding\nthe regulation of digital assets, including bitcoin, and their markets, notwithstanding certain recent federal interpretive actions\nintended to provide additional clarity. On March 17, 2026, the SEC issued an interpretive release (the “Interpretive Release”)\nregarding the application of the federal securities laws to certain types of digital assets and certain transactions involving\ndigital assets., and the CFTC concurrently provided guidance that it and its staff will administer the Commodity Exchange Act consistent\nwith that interpretation. Among other things, the Interpretive Release introduces a taxonomy for crypto addresses how a non-security\ncrypto asset may become subject to, and may cease to be subject to, an investment contract; and clarifies the application of the\nfederal securities laws to airdrops, protocol mining, protocol staking and the wrapping of a non-security crypto asset. Although\nthe March 17, 2026 interpretive guidance may provide greater clarity in certain respects, this guidance is not binding law, may\nbe revised, and does not eliminate uncertainty, particularly with respect to the regulatory treatment of specific activities or\ntransactions involving crypto assets.In August 2021, the chair of the SEC stated that he believed investors using digital asset\ntrading platforms are not adequately protected, and that activities on the platforms can implicate the securities laws, commodities\nlaws and banking laws, raising a number of issues related to protecting investors and consumers, guarding against illicit activity,\nand ensuring financial stability. The chair expressed a need for the SEC to have additional authorities to prevent transactions,\nproducts, and platforms from “falling between regulatory cracks,” as well as for more resources to protect investors\nin “this growing and volatile sector.” The chair called for federal legislation centering on digital asset trading,\nlending, and decentralized finance platforms, seeking “additional plenary authority” to write rules for digital asset\ntrading and lending. It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional\nauthorities to the CFTC, SEC or other regulators, what the nature of such\n\n13\n\nadditional authorities might be, how additional legislation\nand/or regulatory oversight might impact the ability of digital asset markets to function or how any new regulations or changes\nto existing regulations might impact the value of digital assets generally and bitcoin held by the Trust specifically. The consequences\nof increased federal regulation of digital assets and digital asset activities could have a material adverse effect on the Trust\nand the Shares.\n\n \n\nFinCEN requires any administrator or exchanger\nof convertible virtual currency (“CVC”) to register with FinCEN as a money transmitter and comply with the anti- money\nlaundering regulations applicable to money transmitters. Entities which fail to comply with such regulations are subject to fines,\nmay be required to cease operations, and could have potential criminal liability. For example, in 2015, FinCEN assessed a $700,000\nfine against a sponsor of a digital asset for violating several requirements of the Bank Secrecy Act by acting as an MSB and selling\nthe digital asset without registering with FinCEN, and by failing to implement and maintain an adequate anti-money laundering program.\nIn 2017, FinCEN assessed a $110,000,000 fine against BTC-e, a now defunct digital asset exchange, for similar violations. The requirement\nthat exchangers that do business in the United States register with FinCEN and comply with anti- money laundering regulations may\nincrease the cost of buying and selling bitcoin and therefore may adversely affect the price of bitcoin and an investment in the\nShares.\n\n \n\nThe Office of Foreign Assets Control (“OFAC”)\nof the U.S. Department of the Treasury (the “U.S. Treasury Department”) has added digital currency addresses, including\naddresses on the Bitcoin Blockchain, to the list of Specially Designated Nationals whose assets are blocked, and with whom U.S.\npersons are generally prohibited from dealing. Such actions by OFAC, or by similar organizations in other jurisdictions, may introduce\nuncertainty in the market as to whether bitcoin that has been associated with such addresses in the past can be easily sold. This\n“tainted” bitcoin may trade at a substantial discount to untainted bitcoin. Reduced fungibility in the bitcoin markets\nmay reduce the liquidity of bitcoin and therefore adversely affect their price.\n\n \n\nIn February 2020, then-U.S. Treasury Secretary\nSteven Mnuchin stated that digital assets were a “crucial area” on which the U.S. Treasury Department has spent significant\ntime. Secretary Mnuchin announced that the U.S. Treasury Department is preparing significant new regulations governing digital\nasset activities to address concerns regarding the potential use for facilitating money laundering and other illicit activities.\nIn December 2020, FinCEN, a bureau within the U.S. Treasury Department, proposed a rule that would require financial institutions\nto submit reports, keep records, and verify the identity of customers for certain transactions to or from so-called “unhosted”\nwallets, also commonly referred to as self-hosted wallets. In January 2021, then U.S. Treasury Secretary nominee Janet Yellen stated\nher belief that regulators should “look closely at how to encourage the use of digital assets for legitimate activities while\ncurtailing their use for malign and illegal activities.”\n\n \n\nUnder regulations from the New York State\nDepartment of Financial Services (“NYDFS”), businesses involved in digital asset business activity for third parties\nin or involving New York, excluding merchants and consumers, must apply for a license, commonly known as a BitLicense, from the\nNYDFS and must comply with anti-money laundering, cybersecurity, consumer protection, and financial and reporting requirements,\namong others. As an alternative to a BitLicense, a firm can apply for a charter to become a limited purpose trust company under\nNew York law qualified to engage in certain digital asset business activities. Other states have considered or approved digital\nasset business activity statutes or rules, passing, for example, regulations or guidance indicating that certain digital asset\nbusiness activities constitute money transmission requiring licensure.\n\n \n\nThe inconsistency in applying money transmitting\nlicensure requirements to certain businesses may make it more difficult for these businesses to provide services, which may affect\nconsumer adoption of bitcoin and its price. In an attempt to address these issues, the Uniform Law Commission passed a model law\nin July 2017, the Uniform Regulation of Virtual Currency Businesses Act, which has many similarities to the BitLicense and features\na multistate reciprocity licensure feature, wherein a business licensed in one state could apply for accelerated licensure procedures\nin other states. It is still unclear, however, how many states, if any, will adopt some or all of the model legislation.\n\n \n\nLaw enforcement agencies have often relied\non the transparency of blockchains to facilitate investigations. However, certain privacy-enhancing features have been, or are\nexpected to be, introduced to a number of digital asset networks. If the Bitcoin network were to adopt any of these privacy-enhancing\nfeatures, these features may provide law enforcement agencies with less visibility into transaction-level data. Europol, the European\nUnion’s law enforcement agency, released a report in October 2017 noting the increased use of privacy-enhancing digital assets\nlike Zcash and Monero in criminal activity on the internet. In May 2022, OFAC banned all U.S. persons from using Blender.io, a\ndigital asset mixing application that operates on the Bitcoin Blockchain to obfuscate the origin, destination and counterparties\nof blockchain transactions, by adding certain digital asset wallet addresses associated with Blender.io to its Specially Designated\nNationals list. Blender.io receives a variety of transactions and mixes them together before transmitting them to their ultimate\ndestinations. On March 23, 2022, Lazarus Group, a state-sponsored cyber hacking group associated with North Korea, carried out\na major virtual currency heist from a blockchain project linked to the online game Axie Infinity; Blender.io was used in processing\nsome of the illicit proceeds. The U.S. Treasury Department’s press release announcing the sanctions on Blender.io observed\nthat, while most\n\n14\n\nvirtual currency activity is licit, virtual currency can be used for illicit activity, including sanctions evasion,\nthrough mixers, peer-to-peer exchangers, darknet markets, and exchanges. This includes the facilitation of heists, ransomware schemes,\nand other cybercrimes. On October 19, 2023, FinCEN published proposed rulemaking to apply the authorities in Section 311 of the\nUSA PATRIOT Act to impose requirements on financial institutions that engage in CVC transactions with CVC mixers. The proposed\nrule, if adopted, would require covered financial institutions to report to FinCEN any CVC transactions they process that involves\nCVC mixing within or involving a jurisdiction outside the United States. The term “CVC mixing” covers more than just\ntransactions that involve CVC mixers like Tornado Cash, and seemingly could cover a broader range of conduct involving technologies,\nservices, or methods that have the effect of obfuscating the source, destination, or amount of a CVC transaction, whether or not\nthe obfuscation was intentional. If the rule were to be adopted as proposed and if the Bitcoin Blockchain were to be deemed to\nor were to adopt features which come within the rule’s ambit, it could cause covered financial institutions - such as many\ndigital asset platforms, or the Trust’s service providers, such as the Cash Custodian - to reduce support for or cease offering\nservices for bitcoin or to the Trust, which could impair the utility of bitcoin, the value of the Shares and the Trust’s\nability to operate in compliance with new laws and regulations.\n\n \n\n*Future Legal Or Regulatory Developments\nMay Negatively Affect The Value Of Bitcoin Or Require The Trust Or The Sponsor To Become Registered With The SEC Or CFTC, Which\nMay Cause The Trust To Liquidate.*\n\n \n\nCurrent and future legislation, SEC and\nCFTC rulemaking, and other regulatory developments may impact the manner in which bitcoin are treated for classification and clearing\npurposes. In particular, although the Interpretive Release classified bitcoin as a digital commodity and not a security under the\nfederal securities laws, bitcoin may nonetheless in the future be classified by the CFTC as a “commodity interest”\nunder the CEA. Alternatively, in the future a court or a future SEC administration could conclude that bitcoin is a “security”\nunder U.S. federal securities laws. The Sponsor and the Trust cannot be certain as to how future regulatory developments will impact\nthe treatment of bitcoin under the law. In the face of such developments, the required registrations and compliance steps may result\nin extraordinary, nonrecurring expenses to the Trust. If the Sponsor decides to terminate the Trust in response to the changed\nregulatory circumstances, the Trust may be dissolved or liquidated at a time that is disadvantageous to Shareholders.\n\n \n\nThe SEC has stated that certain digital\nassets may be considered “securities” under the federal securities laws. The test for determining whether a particular\ndigital asset is a “security” is complex and the outcome is difficult to predict. If bitcoin is in the future determined\nto be a “security” under federal or state securities laws by the SEC or any other agency, or in a proceeding in a court\nof law or otherwise, it would likely have material adverse consequences for the value of bitcoin. For example, it may become more\ndifficult or impossible for bitcoin to be traded, cleared and custodied in the United States as compared to other digital assets\nthat are not considered to be securities, which could in turn negatively affect the liquidity and general acceptance of bitcoin\nand cause users to migrate to other digital assets.\n\n \n\nTo the extent that bitcoin is determined\nto be a security, the Trust and the Sponsor may also be subject to additional regulatory requirements, including under the 1940\nAct, and the Sponsor may be required to register as an investment adviser under the Investment Advisers Act of 1940, as amended\n(the “Advisers Act”). If the Sponsor determines not to comply with such additional regulatory and registration requirements,\nthe Sponsor will terminate the Trust. Any such termination could result in the liquidation of the Trust’s bitcoin at a time\nthat is disadvantageous to Shareholders.\n\n \n\nTo the extent that bitcoin is deemed to\nfall within the definition of a “commodity interest” under the CEA, the Trust and the Sponsor may be subject to additional\nregulation under the CEA and CFTC regulations. These additional requirements may result in extraordinary, recurring and/or nonrecurring\nexpenses of the Trust, thereby materially and adversely impacting the Shares. If the Sponsor and/or the Trust determines not to\ncomply with such additional regulatory and registration requirements, the Sponsor may terminate the Trust. Any such termination\ncould result in the liquidation of the Trust’s bitcoin at a time that is disadvantageous to Shareholders."}