MemGPT/example-sec-filings · Datasets at Hugging Face

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from assessments of our compliance programs may require us to incur
significant costs.

Any failure or perceived failure to comply with existing or new laws and
regulations, including the ones described in this risk factor, or orders
of any governmental authority, including changes to or expansion of
their interpretations, may subject us to significant fines, penalties,
criminal and civil lawsuits, forfeiture of significant assets,
enforcement actions in one or more jurisdictions, result in additional
compliance and licensure requirements, and increased regulatory scrutiny
of our business. In addition, we may be forced to restrict or change our
operations or business practices, make product changes, or delay planned
product launches or improvements. Any of the foregoing could materially
adversely affect our brand, reputation, business, results of operations,
and financial condition. The complexity of global regulatory and
enforcement regimes, coupled with the global scope of our operations and
the evolving global regulatory environment, could result in a single
event giving rise to a large number of overlapping investigations and
legal and regulatory proceedings by multiple government authorities in
different jurisdictions, and have an adverse impact on, or result in the
termination of, our relationships with financial institutions and other
service providers on whom we rely for payment processing services. Our
ability to track and verify transactions to comply with these
regulations, including the ones described in this risk factor, require a
high level of internal controls. As our business continues to grow and
regulations change, we must continue to strengthen our associated
internal controls. Any failure to maintain the necessary controls could
result in reputational harm and result in significant penalties and
fines from regulators.

Payments Regulation

In the United States, our wholly-owned subsidiary, Airbnb Payments, Inc.
("irbnb Payments", is registered as a "oney Services Business"with the
U.S. Department of Treasury' Financial Crimes Enforcement Network
("inCEN", and subject to regulatory oversight and enforcement by FinCEN
under the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001
(the "SA". Airbnb Payments has also obtained licenses to operate as a
money transmitter (or its equivalent) in various states and territories
where such licenses are required. As a licensed money transmitter,
Airbnb Payments is subject to obligations and restrictions with respect
to the handling and investment of customer funds, record keeping and
reporting requirements, bonding requirements, and inspection by state
regulatory agencies. In U.S. states and territories in which Airbnb
Payments has not obtained a license to operate as a money transmitter
(or its equivalent), we may be required to apply for licenses or
regulatory approvals, including due to changes in applicable laws and
regulations or their interpretations.

36

We issue gift cards in the United States and in certain other
geographies for use on our platform and are subject to consumer
protection and disclosure regulations relating to those services. If we
seek to expand our gift cards or other stored value card products and
services, or as a result of regulatory changes, we may be subject to
additional regulation and may be required to obtain additional licenses
and registrations, which we may not be able to obtain.

We principally provide our payment services to Hosts and guests in the
EEA through Airbnb Payments Luxembourg SA ("PLux", our wholly-owned
subsidiary that is licensed and subject to regulation as a payments
institution in Luxembourg. EEA laws and regulations are typically
subject to different and potentially inconsistent interpretations by the
countries that are members of the EEA, which can make compliance more
costly and operationally difficult to manage. For example, countries
that are EEA members may each have different and potentially
inconsistent domestic regulations implementing European Directives,
including the European Union Payment Services Directive, the Revised
Payment Services Directive ("SD2", the E-Money Directive, and the Fourth
and Fifth Anti-Money Laundering Directives. Further, we provide our
payments services to Hosts and guests in the United Kingdom and other
geographies outside the United States and the EEA through Airbnb
Payments UK Limited ("PUK", our wholly-owned subsidiary that is licensed
and subject to regulation as an electronic money institution ("MI" in
the United Kingdom, as well as through our other wholly-owned payments
entities.

PSD2 imposes new standards for payment security and strong customer
authentication (aimed at fraud reduction) that may make it more
difficult and time consuming to carry out a payment transaction. The
United Kingdom began enforcing requirements with respect to online card
payments in 2022, while countries in the EEA began enforcing these
requirements in 2021. In many cases, strong customer authentication
requires our UK and EEA guests to engage in additional steps to
authenticate payment transactions and EEA Hosts to perform
authentication upon access to their Airbnb payout account or
modification of their payout account information. These additional
authentication requirements may make our platform experience for Hosts
and guests in the United Kingdom and EEA substantially less convenient,
and such loss of convenience could meaningfully reduce the frequency
with which our customers use our platform or could cause some Hosts and
guests to stop using our platform entirely, which could materially
adversely affect our business, results of operations, and financial
condition.

In many countries or geographies, it is and may not be clear whether we
are required to be licensed as a payment services provider, electronic
money institution, financial institution, or otherwise. In such
instances, we partner with local banks and licensed payment processors

from assessments of our compliance programs may require us to incur

significant costs.

Any failure or perceived failure to comply with existing or new laws and

regulations, including the ones described in this risk factor, or orders

of any governmental authority, including changes to or expansion of

their interpretations, may subject us to significant fines, penalties,

criminal and civil lawsuits, forfeiture of significant assets,

enforcement actions in one or more jurisdictions, result in additional

compliance and licensure requirements, and increased regulatory scrutiny

of our business. In addition, we may be forced to restrict or change our

operations or business practices, make product changes, or delay planned

product launches or improvements. Any of the foregoing could materially

adversely affect our brand, reputation, business, results of operations,

and financial condition. The complexity of global regulatory and

enforcement regimes, coupled with the global scope of our operations and

the evolving global regulatory environment, could result in a single

event giving rise to a large number of overlapping investigations and

legal and regulatory proceedings by multiple government authorities in

different jurisdictions, and have an adverse impact on, or result in the

termination of, our relationships with financial institutions and other

service providers on whom we rely for payment processing services. Our

ability to track and verify transactions to comply with these

regulations, including the ones described in this risk factor, require a

high level of internal controls. As our business continues to grow and

regulations change, we must continue to strengthen our associated

internal controls. Any failure to maintain the necessary controls could

result in reputational harm and result in significant penalties and

fines from regulators.

*Payments Regulation*

In the United States, our wholly-owned subsidiary, Airbnb Payments, Inc.

("irbnb Payments", is registered as a "oney Services Business"with the

U.S. Department of Treasury' Financial Crimes Enforcement Network

("inCEN", and subject to regulatory oversight and enforcement by FinCEN

under the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001

(the "SA". Airbnb Payments has also obtained licenses to operate as a

money transmitter (or its equivalent) in various states and territories

where such licenses are required. As a licensed money transmitter,

Airbnb Payments is subject to obligations and restrictions with respect

to the handling and investment of customer funds, record keeping and

reporting requirements, bonding requirements, and inspection by state

regulatory agencies. In U.S. states and territories in which Airbnb

Payments has not obtained a license to operate as a money transmitter

(or its equivalent), we may be required to apply for licenses or

regulatory approvals, including due to changes in applicable laws and

regulations or their interpretations.

36

We issue gift cards in the United States and in certain other

geographies for use on our platform and are subject to consumer

protection and disclosure regulations relating to those services. If we

seek to expand our gift cards or other stored value card products and

services, or as a result of regulatory changes, we may be subject to

additional regulation and may be required to obtain additional licenses

and registrations, which we may not be able to obtain.

We principally provide our payment services to Hosts and guests in the

EEA through Airbnb Payments Luxembourg SA ("PLux", our wholly-owned

subsidiary that is licensed and subject to regulation as a payments

institution in Luxembourg. EEA laws and regulations are typically

subject to different and potentially inconsistent interpretations by the

countries that are members of the EEA, which can make compliance more

costly and operationally difficult to manage. For example, countries

that are EEA members may each have different and potentially

inconsistent domestic regulations implementing European Directives,

including the European Union Payment Services Directive, the Revised

Payment Services Directive ("SD2", the E-Money Directive, and the Fourth

and Fifth Anti-Money Laundering Directives. Further, we provide our

payments services to Hosts and guests in the United Kingdom and other

geographies outside the United States and the EEA through Airbnb

Payments UK Limited ("PUK", our wholly-owned subsidiary that is licensed

and subject to regulation as an electronic money institution ("MI" in

the United Kingdom, as well as through our other wholly-owned payments

entities.

PSD2 imposes new standards for payment security and strong customer

authentication (aimed at fraud reduction) that may make it more

difficult and time consuming to carry out a payment transaction. The

United Kingdom began enforcing requirements with respect to online card

payments in 2022, while countries in the EEA began enforcing these

requirements in 2021. In many cases, strong customer authentication

requires our UK and EEA guests to engage in additional steps to

authenticate payment transactions and EEA Hosts to perform

authentication upon access to their Airbnb payout account or

modification of their payout account information. These additional

authentication requirements may make our platform experience for Hosts

and guests in the United Kingdom and EEA substantially less convenient,

and such loss of convenience could meaningfully reduce the frequency

with which our customers use our platform or could cause some Hosts and

guests to stop using our platform entirely, which could materially

adversely affect our business, results of operations, and financial

condition.

In many countries or geographies, it is and may not be clear whether we

are required to be licensed as a payment services provider, electronic

money institution, financial institution, or otherwise. In such

instances, we partner with local banks and licensed payment processors