SecProbe.io

United States securities and exchange commission logo
June 11, 2024
James Gernetzke
Chief Financial Officer
Exodus Movement, Inc.
15418 Weir Street, Suite #333
Omaha, NE 68137
Re:Exodus Movement, Inc.
Amendment No. 1 to Registration Statement on Form 10-12G
Filed May 1, 2024
File No. 000-56643
Dear James Gernetzke:
            We have reviewed your filing and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response and any amendment you may file in response to this letter,
we may have additional comments.
Amendment No. 1 to Registration Statement on Form 10
General
1.Refer to your response to comment 24. We note your website indicates that the platform
users can stake crypto assets and enable "Auto Restaking" on select assets. Please revise
to provide disclosure regarding the Auto Restaking program and the crypto assets to
which the program pertains. Please also provide us with your legal analysis as to how your
activities supporting staking are executed in compliance with the federal securities laws,
including why these activities do not involve the offer and sale of securities under Section
2(a)(1) of the Securities Act. In this regard, we note your disclosure on page 24. In
responding to this comment, please address and provide us copies of all agreements
relating to these activities, including user agreements and agreements with Everstake.
2.Refer to your response to comments 1 and 2 that you do not have any policies or processes
in place to determine whether the crypto assets your wallet supports and the crypto assets
you hold for your own account are securities within the meaning of Section 2(a)(1) of the
Securities Act or whether the exchanges that take place on your platform between users of

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the platform, the exchanges that take place on your platform via your APIs and the
services such as staking that you provide to your users constitute the offer and sale of
"securities" and whether such services are provided in compliance with the federal
securities laws. We note that certain of the crypto assets your wallets support, the crypto
assets you hold, the crypto assets for which you provide trading services and staking
services have been identified as securities in separate SEC complaints such as Cosmos,
Tezos, Solana, Polygon and Algorand. Please revise your disclosure to (i) clarify that you
do not have policies or processes in place to determine whether the crypto assets you
support and provide services for are securities within the meaning of Section 2(a)(1) of the
Securities Act, (ii) disclose that certain of the crypto assets you provide access to services
for have been identified as securities in SEC complaints and (iii) expand your disclosure
regarding the impacts to your business if your products and services are found to be in
violation of the federal securities laws.
3.Refer to your response to comment 1. Please revise your disclosure to address your
policies and processes for determining whether you are in compliance with the rules,
regulations and laws of the jurisdictions outside of the U.S. in which you offer your
products and services and describe the material rules, regulations and laws that impact
your business in such jurisdictions.
4.Please revise the table you provided in response to comment 3 to:
•identify each of the crypto assets material to your business, organized by aggregate
revenue earned involving the crypto assets;
•for each crypto asset listed, identify the blockchain on which the crypto asset exists;
•for each crypto asset, include revenue earned from transactions involving the crypto
asset in each jurisdiction in which you provide products and services for the crypto
asset; and
•for each crypto asset, identify the services you provide for the crypto asset.
In addition, please revise your registration statement to include a table that, by revenue
earned, lists the crypto assets that are material to your business and the jurisdictions in
which you provide services for each of these crypto assets, and describe the characteristics
of each of these crypto assets. In this regard, we note your disclosure on pages 30 and 60.
5.Please provide a detailed legal analysis as to why you believe the Company would not be
a “broker” or “dealer” under the Exchange Act as a result of their operation of the Exodus
Platform. In your response, please cite to applicable case law, no-action letters, or other
guidance.
6.We note your references throughout to "digital assets," "cryptocurrency," "crypto assets"
and "virtual currency."  To the extent you are using these terms interchangeably, please
revise your disclosure to use one term. If these terms are instead being used to mean
different things, please revise to define each term on first use.

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Business, page 1
7.Refer to your response to comment 6. Please revise to identify the jurisdictions in which
you offer your platform and services. In this regard, we note that you provide a map on
your website that shows the jurisdictions in which you operate.
8.Refer to your response to comment 11. Please describe the AML, KYC and other
procedures conducted by your third-party API Providers, and describe your AML, KYC
and other procedures related to the sale, acquisition and distribution of crypto assets for
your own account or in connection with your referral program. In this regard, we note
your disclosure on pages 4 and 9.
9.We note your disclosure that Exodus offers access to over 21,000 crypto assets.  We also
note that your website indicates that 100,000+ crypto assets are supported.  Please
reconcile this difference or explain.
Our Industry, page 1
10.Refer to your response to comment 14. Please expand the last bullet point on page 2 to
clarify that stablecoins may deviate from the pegged value for many reasons, including
supply and demand and market conditions that cause reputational harm.
Our Products and Services, page 5
11.Refer to your response to comment 17. Please identify all of your API providers as of the
most recent practicable date, including the jurisdiction of each and the services provided
to users of your platform by each, including whether the API provides such services to
U.S. persons. In addition, please revise your disclosure to clarify the fees users pay for the
use of your services and products. In this regard, we note your disclosure on page 4 that
"[w]here permitted, each new app provides [you] with an opportunity to monetize user
transactions involving digital assets held in the Exodus Platform through commissions,
subscription fees or other means."
12.Refer to your response to comment 19. Please expand your Exchange Aggregation section
on page 5 to describe in detail what your Exchange Aggregator is and how it works. For
example, please disclose how your platform identifies and communicates (i) the trading
pairs of crypto assets that users may exchange, including the number of crypto assets the
user will transfer and receive in such exchange, (ii) the fiat currencies users may use to
purchase crypto assets, including the cost of purchasing such crypto assets and (iii) the
crypto assets that users may exchange for fiat currencies, including the amount of fiat
currency the user will receive. Also identify the exchanges that the Exchange
Aggregator aggregates, the jurisdiction of each exchange and whether the Exchange
Aggregator offers services for all 21,000 crypto assets, including the NFTs, that your
wallet supports. Also describe the mechanics of how a user sends, receives and exchanges
crypto assets by using the Exchange Aggregator, including whether the user transfers
its crypto assets or fiat currency to the API Provider in connection with the transaction.

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13.Refer to your response to comment 21. Please revise your disclosure on page 5 to describe
how you aggregate the APIs of several industry-leading pricing services to provide real-
time information on crypto asset prices on your platform. Also identify the industry-
leading pricing services.
14.Refer to your response to comment 22. We note that you define a monthly active user as
any user "with transaction history" that opens a wallet on your platform in a given month.
Please revise your disclosure on page 31 to clarify what you mean by "with transaction
history." Also please describe here to clarify how you use MAU to measure the retention
levels of your users as well as the size of your global funded user community. Please also
provide a brief definition of "funded user community."
15.We note your disclosure that an updated list of Exodus' API providers is available within
the terms of service located on Exodus' website.  We are unable to locate the "terms of
service" on your website.
16.Refer to your response to comment 23. Please revise to disclose how you inform users
whether or not your wallet will support a fork. Also please clarify what you mean by your
disclosure on page 5 that "[b]ecause the Company is a self-hosted wallet, the Company’s
users have the ability to import their mnemonic seed phrase or private key into another
wallet platform that may support forks that Exodus does not support." Also, please
disclose whether you inform users of airdrops, and, if so, how.
17.Refer to your response to comment 24. Your disclosure on page 6 that users can un-stake
their crypto assets at any time appears to be inconsistent with the disclosure that users
staking Cosmos coins on Exodus will be required to wait twenty-one days to un-stake
their Cosmos coins. Please revise for clarity and consistency and describe the terms of
each of the staking products offered on your platform. In addition, please disclose the
risks to users of using the staking products offered on your platform.
Digital Asset and Stablecoin Holdings, page 7
18.Refer to your response to comment 7. Please disclose the percentage of your private keys
that you hold in cold storage. In addition, we note your disclosure that you self-custody
4,625,187 units of "Other" crypto assets. Please revise to disclose the crypto assets in the
"Other" category.
19.Refer to your response to comment 8. We note that your policy related to when you
monetize your crypto assets is to maintain a 50/50 balance of crypto assets and fiat
currency. Please disclose how often you evaluate the balance and how often you rebalance
your holdings. You also disclose that you have never and likely will never achieve a 50/50
split. Please revise to disclose the splits you have had over the most recently completed
fiscal year and as of the most recent practicable date.
Human Capital Management, page 8
20.Refer to your response to comments 25 and 26. On page 8, you disclose that your

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employees are paid exclusively in Bitcoin. However, it appears that almost all of your
employees are actually contractors who work for you pursuant to your agreement with
TriNet and that, pursuant to the agreement, TriNet assumes the liabilities for the business
of employment such as compensation. Please revise to clarify whether you pay TriNet's
employees in Bitcoin or whether you reimburse TriNet for its expenses in Bitcoin. Also
disclose how you determine the "current Bitcoin rate." In addition, please revise to
disclose the term of your agreement with TriNet and the administrative fee you pay for
TriNet's services, including whether the fees you pay TriNet are in Bitcoin or fiat
currency. Finally, we note your disclosure that "[y]our team members are critical to [y]our
mission." Please add a risk factor that addresses the risk that your "team members" are
TriNet's employees, if true, and that, if your agreement with TriNet is terminated, you
may lose your "team members."
Risks Related to Our Business
Operational cost may exceed the award, page 20
21.Refer to your response to comment 29. Please revise your risk disclosure to describe the
April 19, 2024 Bitcoin halving event.
Risks Related to Regulation, page 22
22.Refer to your response to comment 29. Please add a risk factor that addresses the extent to
which material aspects of the business and operations of trading platforms are not
regulated. In addition, please add risk factors that separately discuss the risk of front-
running, wash-trading and security failures or operational problems at trading platforms,
including ones that may be accessed through your platform.
23.Refer to your response to comment 33. Please add a separate risk factor that addresses the
liability to the company if one of your API providers fails to comply with the rules, laws
and regulations in the jurisdiction in which they provide services to your users.
24.Refer to your response to comment 30. As users may lose assets if one of the APIs
experiences insolvency or bankruptcy, please add a risk factor that addresses the risk.
Due to the revenue structure for our Exchange Aggregator..., page 25
25.We note your disclosure on page 25 that you could be deemed to be a broker-dealer if
certain crypto assets are securities due to your revenue structure, as well as your statement
that some digital assets may be considered securities by regulators “in the
future….” Please revise to remove “in the future” as several crypto assets have been
identified as securities. Please also expand this risk factor to disclose the risk that you may
be acting as an unregistered broker-dealer in connection with the staking feature on your
platform. In addition, and given the broad definition of broker, please add a separate risk
factor to clarify that you may be acting as an unregistered broker-dealer regardless of your
revenue structure due to crypto assets on your platform that may currently be securities.

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Director Independence, page 41
26.Refer to comment 36. Please revise to identify the board members who serve on your
audit committee.
Legal Proceedings, page 41
27.Refer to your response to comment 37. Please tell us why you do not view your placement
on the Warning List by the United Kingdom Financial Conduct Authority to be material.
Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder
Matters
Digital Format Exodus Common Stock, page 42
28.Refer to your response to comment 38. Please provide us with a materially complete
description of the Common Stock Tokens, including the role of Securitize, what it means
to be a “representation” of the Class A common stock and the number of outstanding
Common Stock Tokens outstanding. In responding to this comment, please explain the
statement, “Common Stock Tokens are created, held, distributed, maintained and deleted
by the Transfer Agent, and not by Exodus" and that "Common Stock Tokens cannot be
created or deleted by any entity other than the Transfer Agent.” Moreover, if the
“ownership and transfer of shares of our Class A common stock will be recorded in book-
entry form by the Transfer Agent” and the Common Stock Tokens canno