Item 1A. Risk Factors

Other than the risk factor listed below, there have been no material updates during the period covered by this Form 10-Q to the Risk Factors as set forth in Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2021. These risks and uncertainties, however, are not the only risks and uncertainties that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also significantly impact us. Any of these risks and uncertainties may materially and adversely affect our business, financial condition or results of operations, liquidity and cash flows.

Risks Relating to Our Business Following Consummation of Pending ErisX Acquisition

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Digital asset custodial solutions and related technology, including ErisX’s systems and custodial arrangements, are subject to risks related to a loss of funds due to theft of digital assets, employee or vendor sabotage, security and cybersecurity risks, system failures and other operational issues which could cause damage to our and ErisX’s reputation and brand.

The secure storage and transmission of digital assets and data over networks is a critical element of ErisX’s operations. Threats to ErisX’s storage and transmission of digital assets and data may come from external factors such as governments, organized crime, hackers and other third parties such as outsourced or infrastructure-support providers and application developers, or may originate internally from an employee or service provider to whom ErisX has granted access to its systems.

Digital asset transactions may be irrevocable, and stolen or incorrectly transferred digital assets may be irretrievable. Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of a digital asset generally will not be reversible, and ErisX may not be capable of seeking compensation for any such transfer or theft. It is possible that, through computer or human error, or through theft or criminal action, the digital asset could be

transferred in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts. Such events could have a material adverse effect on the ability of ErisX to continue as a going concern, which may have an adverse effect on our business following the acquisition.

While we and ErisX maintain cybersecurity procedures and policies, those procedures and policies may not be adequate to avoid the potential losses caused by security breaches, and ErisX may lose digital assets without any recourse. Unlike bank accounts or accounts at some other financial institutions, in the event of loss or loss of utility value, there is no public insurer, such as the Securities Investor Protection Corporation or the FDIC, to offer recourse to us, ErisX, or to any investor and the misappropriated digital assets may not easily be traced to the bad actor.

Further, when cryptocurrency custodial solutions (whether involving ErisX systems or others) experience system failures or other operational issues, such events could result in a reduction in cryptocurrency prices or confidence and impact the success of ErisX and have a material adverse effect on the ability of ErisX to continue as a going concern, which may have an adverse effect on our business following the acquisition.

While we understand that ErisX has experienced in the past cybersecurity threats and events of varying degrees, we are not aware of any of these threats or events having a material impact on ErisX’s business, financial condition or operating results to date. However, we cannot assure you that we or ErisX will not experience future threats or events that may be material. If any such threats or events materialize, ErisX may be subject to contractual restrictions, liability and damages, loss of business, penalties, unfavorable publicity, and increased scrutiny by its regulators, which may materially impact its business, financial condition and operating results, and which may have an adverse effect on our business following the acquisition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Share repurchase program

In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations for a total authorization of $1.6 billion. The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the Company to make any repurchases at any specific time or situation. The Company repurchased 596,988 shares of its common stock under its share repurchase program during the first quarter of 2022 at an average cost per share of $117.25, totaling $70.0 million and had $248.9 million of availability remaining under its existing share repurchase authorizations as of March 31, 2022.

Purchase of common stock from employees

The table below reflects the acquisition of common stock by the Company in the three months ended March 31, 2022 that were not part of the publicly announced share repurchase authorization. These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards.

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Use of proceeds

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.