v3.25.1
Fair Value of Financial Instruments and Other Assets
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments and Other Assets Fair Value of Financial Instruments and Other Assets
Financial Instruments and Other Assets Measured at Fair Value
The Company’s financial instruments and other assets measured at fair value on the condensed consolidated statements of financial condition as of March 31, 2025 and December 31, 2024 have been categorized based upon the fair value hierarchy as follows:

Quoted Prices in
active Markets
for Identical
Assets
(Level 1)		Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
(dollars in thousands)
As of March 31, 2025
Assets
Cash equivalents – Money market funds and other highly liquid investments$1,084,885 $— $— $1,084,885 
Other assets – Digital Assets – Canton Coins
— — 5,375 5,375 
Other assets – Investment in available for sale debt securities— — 13,627 13,627 
Total assets measured at fair value$1,084,885 $— $19,002 $1,103,887 
Liabilities
Payable and due to affiliates – Foreign exchange derivative contracts$— $570 $— $570 
Total liabilities measured at fair value$— $570 $— $570 
As of December 31, 2024
Assets
Cash equivalents – Money market funds and other highly liquid investments$1,117,133 $— $— $1,117,133 
Receivable and due from affiliates – Foreign exchange derivative contracts— 7,844 — 7,844 
Other assets – Digital Assets – Canton Coins
— — 852 852 
Other assets – Investment in available for sale debt securities
— — 10,354 10,354 
Total assets measured at fair value$1,117,133 $7,844 $11,206 $1,136,183 
Cash Equivalents
The Company’s cash equivalents are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.
Investments in Available-for-Sale Debt Securities
In April 2024, the Company made an investment in a convertible note with a principal amount and original amortized cost basis of $10.0 million. The note accrues interest at a rate of 5% per annum, compounded annually, and matures on the earliest to occur of January 19, 2027, an event of default or a change in control as each term is defined in the convertible note. The note and accrued interest will convert to equity securities of the issuer on January 19, 2027, if not previously repaid or converted upon certain defined financing events. The convertible note is accounted for as an available-for-sale debt security and the convertible note and accrued interest is included within other assets on the accompanying condensed consolidated statements of financial condition at a fair value of $13.6 million and $10.4 million as of March 31, 2025 and December 31, 2024, respectively. The convertible note, including accrued interest, had an amortized cost basis of $10.5 million and $10.4 million as of March 31, 2025 and December 31, 2024, respectively. There were no credit losses recorded on the convertible note during the three months ended March 31, 2025. During the three months ended March 31, 2025, there was a $3.2 million unrealized gain recorded as a component of other comprehensive income related to an increase in fair value of the convertible note during the period. The convertible note is classified within level 3 of the fair value hierarchy because the valuation requires assumptions that are both significant and unobservable. The primary methods used to estimate the fair value of the convertible note were a discounted cash flow analysis and a probability-weighted expected return model which incorporated the credit risk of the issuer and scenarios in which the note would convert into equity, the estimated equity value of the issuer and the conversion terms outlined in the convertible note agreement. Significant unobservable inputs included a discount rate of 15%. Significant increases or decreases in the discount rate would have resulted in a significantly lower or higher fair value measurement.
Digital Assets - Canton Coins
The Canton Network is a public-permissioned blockchain network designed with privacy and controls to facilitate the exchange of regulated financial assets. The Canton Network’s Global Synchronizer includes a utility token, which is a digital asset called the Canton Coin that is used to pay traffic fees for using the Global Synchronizer, the Canton Network’s decentralized interoperability infrastructure. Beginning in the third quarter of 2024, the Company earned and continues to earn Canton Coins for its function as a Super Validator and Validator on the Global Synchronizer, and then generally holds the Canton Coins on its balance sheet for investment purposes and may use Canton Coins to pay fees associated with its own Canton Network activity. During the three months ended March 31, 2025, the Company recognized $0.3 million in other revenue relating to Canton Coins received in exchange for providing services as a Super Validator and Validator. As of March 31, 2025, Canton Coins may only be transferred to other approved participants on the Canton Network and there is no public market for Canton Coins.
The following table presents the Company’s Canton Coin holdings as of March 31, 2025 and December 31, 2024:
March 31, 2025December 31, 2024
Quantity of CoinsCost BasisFair ValueQuantity of CoinsCost BasisFair Value
(dollars in thousands)
Canton Coins1.5 billion$969 $5,375 1.2 billion$666 $852 
The Company’s Canton Coin holdings are classified within level 3 of the fair value hierarchy because the valuation requires assumptions that are both significant and unobservable. The Company utilized the assistance of a third-party valuation specialist to determine the fair value of its Canton Coins. Because of the lack of a public market, the fair value was determined using a combination of a development cost approach and a market approach. The Company’s valuation of its Canton Coins is highly subjective. As the Company held 1.5 billion and 1.2 billion Canton Coins as of March 31, 2025 and December 31, 2024, respectively, a significant increase or decrease in either the estimated development costs or market price, the weighting of the development cost versus the market approaches, or the discount for lack of marketability applied could have resulted in a significant change to the fair value measurement.
Level 3 Roll Forward
The table below presents a summary of the changes in fair value for level 3 assets during the three months ended March 31, 2025:
Investment in Available for Sale Debt Securities
Digital AssetsTotal
Level 3 Assets
(dollars in thousands)
Balance - December 31, 2024$10,354 $852 $11,206 
Additions123 302 425 
Dispositions— — — 
Total realized and unrealized gains included in other income (loss), net— 4,221 4,221 
Total realized and unrealized gains included in other comprehensive income (loss)3,150 — 3,150 
Balance - March 31, 2025$13,627 $5,375 $19,002 
During the three months ended March 31, 2025, the Company recognized unrealized gains relating to level 3 assets held at March 31, 2025 totaling $4.2 million, included as a component of other income (loss), net on the accompanying condensed consolidated statements of income and $3.2 million included as a component of other comprehensive income on the accompanying condensed consolidated statements of comprehensive income. There were no unrealized or realized gains (losses) relating to level 3 assets recognized during the three months ended March 31, 2024.
There were no material realized gains or realized losses recorded on the disposition of digital assets during the three months ended March 31, 2025.
Foreign Exchange Derivative Contracts
The Company enters into foreign currency forward contracts to mitigate its U.S. dollar and British pound sterling versus euro exposure, generally with a duration of less than 12 months. The valuations for the Company’s foreign currency forward contracts are primarily based on the difference between the exchange rate associated with the contract and the exchange rate at the current period end for the tenor of the contract. Foreign currency forward contracts are categorized as Level 2 in the fair value hierarchy. As of March 31, 2025 and December 31, 2024, the counterparty on each of these foreign exchange derivative contracts was an affiliate of LSEG and therefore the corresponding assets or liabilities on such contracts were included in receivable and due from affiliates or payable and due to affiliates, respectively, on the accompanying condensed consolidated statements of financial condition.
The following table summarizes the aggregate U.S. dollar equivalent notional amount of the Company’s foreign exchange derivative contracts not designated as hedges for accounting purposes:
March 31,December 31,
20252024
(dollars in thousands)
Foreign currency forward contracts – Gross notional amount$283,976 $238,182 
The Company’s foreign exchange derivative contracts are not designated as hedges for accounting purposes and changes in the fair value of these contracts during the period are recognized in the condensed consolidated statements of income. The total realized and unrealized gains (losses) on foreign exchange derivative contracts recorded within the condensed consolidated statements of income are as follows:
Three Months Ended
March 31,
20252024
(dollars in thousands)
Foreign currency forward contracts not designated in accounting hedge relationship – General and administrative (expenses)/income$(6,320)$4,351 
Financial Instruments Not Measured at Fair Value
The Company’s financial instruments not measured at fair value on the condensed consolidated statements of financial condition as of March 31, 2025 and December 31, 2024 have been categorized based upon the fair value hierarchy as follows:
Carrying ValueQuoted Prices in
active Markets
for Identical
Assets
(Level 1)
 Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)		Total Fair Value
As of March 31, 2025(dollars in thousands)
Assets
Cash and restricted cash$222,570 $222,570 $— $— $222,570 
Receivable from brokers and dealers and clearing organizations135,760 — 135,760 — 135,760 
Deposits with clearing organizations102,048 102,048 — — 102,048 
Accounts receivable271,505 — 271,505 — 271,505 
Other assets – Memberships in clearing organizations
3,126 — — 3,126 3,126 
Total$735,009 $324,618 $407,265 $3,126 $735,009 
Liabilities
Payable to brokers and dealers and clearing organizations$104,799 $— $104,799 $— $104,799 
Total$104,799 $— $104,799 $— $104,799 
As of December 31, 2024
Assets
Cash and restricted cash$224,169 $224,169 $— $— $224,169 
Receivable from brokers and dealers and clearing organizations67,805 — 67,805 — 67,805 
Deposits with clearing organizations54,702 54,702 — — 54,702 
Accounts receivable222,268 — 222,268 — 222,268 
Other assets – Memberships in clearing organizations
2,918 — — 2,918 2,918 
Total$571,862 $278,871 $290,073 $2,918 $571,862 
Liabilities
Payable to brokers and dealers and clearing organizations$67,816 $— $67,816 $— $67,816 
Total$67,816 $— $67,816 $— $67,816 
The carrying value of financial instruments not measured at fair value classified within level 1 or level 2 of the fair value hierarchy approximates fair value because of the relatively short term nature of the underlying assets or liabilities. The memberships in clearing organizations, which are included in other assets on the condensed consolidated statements of financial condition, are classified within level 3 of the fair value hierarchy because the valuation requires assumptions that are both significant and unobservable.
Financial Instruments Without Readily Determinable Fair Values
Included in other assets on the condensed consolidated statements of financial condition are minority equity investments in various companies without readily determinable fair values of $17.8 million as of both March 31, 2025 and December 31, 2024. These equity investments are subject to general contractual sale restrictions that prohibit the transfer or sale of the investment without prior consent of the investee.