TradeStation SPAC Presentation Deck

44 Risk Factors (Cont.) Risks Related to Our Cryptocurrency Products and Services The market for cryptocurrency is fragmented, volatile and unpredictable, which may prevent customers from easily entering or liquidating their cryptocurrency positions and which may increase their losses or prevent them from realizing their gains, or result in large losses over a short period of time. ● ● ● ● ● Cryptocurrency is believed by many to attract a disproportionately high (as compared to legal tender and other asset classes) number of bad actors who engage, or seek to engage, in cyber-attacks, fraud, theft, money laundering and other crimes or illegal or prohibited activities. Additionally, transactions in cryptocurrency may be irreversible and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable. ● Cryptocurrency is not legal tender, is not backed by the U.S. government (or most other governments), and customer balances are not covered by FDIC or SIPC protections. The value of a cryptocurrency may be derived in large part from the continued willingness of market participants to exchange legal tender for cryptocurrency, or a particular cryptocurrency for another, which, if such willingness diminishes or disappears, may result in permanent and total loss of value for that particular cryptocurrency. The underlying technology of a cryptocurrency may suddenly change, such that the new version of the cryptocurrency is no longer compatible with existing versions or there is otherwise a permanent divergence of the cryptocurrency's blockchain (often called a "Fork"), which could materially adversely impact the value, functionality and other characteristics of the cryptocurrency. The nascent, novel and evolving nature of cryptocurrency creates greater risks when compared to other asset classes, which in turn raises the risk of harm to our customers and us, the creation of unrecoverable losses to our customers and us, and negative regulatory and political actions. These risks may result in substantial claims and other actions being brought against us by customers, regulators and other authorities, which may result in large judgments, settlements, fines, cease-and-desist and similar orders or sanctions, which could limit our cryptocurrency business or eliminate parts of it, and which harm our brand, reputation, business, financial condition and results of operations. Regulation of the cryptocurrency industry is incipient, fragmented and complex and will likely change substantially. Our interpretations of any cryptocurrency regulation may be subject to challenge by the relevant regulators and our failure to comply with such regulation may negatively impact our ability to allow customers to buy, hold and sell cryptocurrencies with us in the future and may significantly and adversely affect our business, financial condition and results of operations. Any inability on our part to maintain adequate relationships with licensors of our core cryptocurrency brokerage technology, cryptocurrency custody providers or cryptocurrency liquidity providers, or other relevant vendors or service providers, could negatively impact our operations. Risks Related to Regulation and Litigation Certain state and federal regulators have recently challenged or questioned, including directly with us, the legality or appropriateness of a cryptocurrency exchange or brokerage firm hypothecating or lending its customers cryptocurrency assets that are in its custody, and/or paying interest to customers on their cryptocurrency balances. Should these practices be prohibited or limited, we may have to withdraw from or cease our cryptocurrency lending activities in certain states or totally, and no longer be able generate the revenue associated with cryptocurrency lending. Being unable to pay interest on customer cryptocurrency account balances could diminish the growth of our cryptocurrency account base or result in certain customers decreasing the amount of business they do with us or ceasing to do business with us altogether. Because we self-clear all of our asset classes, we are required to be in compliance with numerous, complex and changing regulatory frameworks, rules and regulations imposed by numerous and distinct regulatory authorities and to maintain a significant regulatory financial and operations compliance infrastructure. Changes in these laws and regulations, failure to comply with these laws and regulations, and proceedings and investigations related thereto, could harm our business, financial condition and results of operations. Public officials have signaled an increased focus on new or additional regulations that could impact our business and require us to make significant changes to our business model and practices, including with respect to social communities, gamification, PFOF, cryptocurrency lending, and paying crypto interest on customer crypto account balances. Changes in these regulations, failure to comply with these regulations, or proceedings and investigations related thereto, could harm our business, financial condition and results of operations.

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