v3.26.1
Fair Value of Financial Instruments and Other Assets
 3 Months Ended
Mar. 31, 2026
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, 2026 and December 31, 2025 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, 2026
Assets
Cash equivalents – Money market funds and other highly liquid investments$1,722,837 $— $— $1,722,837 
Investment in available for sale debt securities (1)
— — 26,076 26,076 
Investment in equity securities (1)
— 26,585 — 26,585 
Digital assets – Canton Coins (1)
243,498 — — 243,498 
Receivable and due from related parties – Foreign exchange derivative contracts
— 2,981 — 2,981 
Total assets measured at fair value$1,966,335 $29,566 $26,076 $2,021,977 
(1)Included as a component of digital assets and other investments at fair value on the condensed consolidated statements of financial condition.

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 December 31, 2025
Assets
Cash equivalents – Money market funds and other highly liquid investments$1,810,560 $— $— $1,810,560 
Investment in available for sale debt securities (1)
— — 24,857 24,857 
Digital asset loan receivable (1)
— 24,411 — 24,411 
Digital assets – Canton Coins (1)
242,729 — — 242,729 
Total assets measured at fair value$2,053,289 $24,411 $24,857 $2,102,557 
Liabilities
Payable and due to related parties – Foreign exchange derivative contracts$— $6,657 $— $6,657 
Total liabilities measured at fair value$— $6,657 $— $6,657 
(1)Included as a component of digital assets and other investments at fair value on the condensed consolidated statements of financial condition.
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 a strategic investment in a convertible note with a principal amount and original amortized cost basis of $10.0 million. The investment was made as part of the Company’s broader initiative to support the digitization of capital markets through the adoption of blockchain technology. The convertible 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. In the fourth quarter of 2025, the issuer announced that it entered into a definitive business combination agreement through which the issuer will become a publicly-listed company (the “Merger Transaction”), subject to issuer shareholder approval, customary closing conditions and regulatory approvals, at a $1.25 billion pre-money equity value, subject to customary valuation adjustments. If completed, the Merger Transaction would trigger the conversion of the convertible note and accrued interest.
The convertible note is accounted for as an available-for-sale debt security and the convertible note and accrued interest is included within digital assets and other investments at fair value on the accompanying condensed consolidated statements of financial condition at a fair value of $26.1 million and $24.9 million as of March 31, 2026 and December 31, 2025, respectively. The convertible note, including accrued interest, had an amortized cost basis of $11.0 million and $10.9 million as of March 31, 2026 and December 31, 2025, respectively. There were no credit losses recorded on the convertible note during the three months ended March 31, 2026 and 2025. During the three months ended March 31, 2026 and 2025, there were $1.1 million and $3.2 million of unrealized gains, respectively, recorded as a component of other comprehensive income related to an increase in fair value of the convertible note during the periods. 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 method used to estimate the fair value of the convertible note as of March 31, 2026 was 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 12% and management’s assessment of the probability of the issuer obtaining shareholder approval for the Merger Transaction and the corresponding expected realization of value to the Company if the Merger Transaction closes at the expected valuation. Any increase in the discount rate used, any decrease in the probability of shareholder approval, the closing of the merger at a lower valuation and/or any increase in the estimated time to close would result in a lower fair value measurement. Similarly, any decrease in the discount rate used, any increase in the probability of shareholder approval, the closing of the Merger Transaction at a higher valuation and/or any decrease in the estimated time to close would result in a higher fair value measurement.
Canton Coins
The Canton Network’s Global Synchronizer includes a utility token, which is a digital asset called the Canton Coin. Beginning in the third quarter of 2024, the Company began earning 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. On March 3, 2026, the Canton Network approved a long-term locking and commitment framework for Super Validators (the “Locking Commitment”) designed to align Super Validator incentives with the long-term success of the Canton Network and create visible, on-chain commitment of the Super Validators to the Canton Network. To continue earning Canton Coins for its function as a Super Validator, the Locking Commitment requires Super Validators, including the Company, to lock a defined percentage of its aggregate lifetime Canton Coins earned for its function as a Super Validator. Once implemented, the amount of Super Validator weight assigned to the Company will be based on the tiered percentage Locking Commitment elected by the Company. The Locking Commitment percentages step down over time and are scheduled to end in mid-2029. While Canton Coins are locked, they may not be transferred to third parties and once an election to unlock is made, 1/365 of the requested unlock amount becomes liquid each day. The final Locking Commitment election is binding beginning in May 2026 and the Company is currently still evaluating its final Locking Commitment election.
During the three months ended March 31, 2026 and 2025, the Company recognized $3.7 million and $0.3 million, respectively, in other revenue relating to Canton Coins earned in exchange for providing services as a Super Validator and Validator on the Canton Network.
The following table presents the Company’s Canton Coin holdings as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Quantity of CoinsCost BasisFair ValueQuantity of CoinsCost BasisFair Value
(dollars in thousands)
Canton Coins1.6 billion$15,130 $243,498 1.6 billion$11,461 $242,729 
In November 2025, the Canton Coin began spot trading across several global digital asset exchanges and therefore its valuation was transferred from Level 3 to Level 1 of the fair value hierarchy as a result of the increase in observable pricing available from active markets. As of March 31, 2026 and December 31, 2025, the Company’s Canton Coin holdings were measured at fair value using quoted prices from the Company’s principal market for the sale of Canton Coins at the time of measurement.
During the three months ended March 31, 2026 and 2025, unrealized gains/losses related to changes of the fair value of Canton Coins totaled a loss of $2.9 million and a gain of $4.2 million, respectively, included as a component of other income (loss), net on the condensed consolidated statements of income. There were no material realized gains or realized losses recorded on the disposition of Canton Coins during both the three months ended March 31, 2026 and 2025.
Investment in Canton Strategic Holdings
In November 2025, the Company exchanged approximately 161 million Canton Coins for approximately 8 million pre-funded warrants (“PFWs”), which upon exercise, entitle the Company the right to receive an equivalent number of shares of common stock of Canton Strategic Holdings, Inc. (formerly known as Tharimmune, Inc.) (“CNTN”). The exercisability of the PFWs was contingent on the approval of CNTN’s shareholders and if shareholder approval was not obtained by May 13, 2026, the PFWs would have been terminated and the Company would have been entitled to the receipt of the 161 million Canton Coins originally pre-funded. On the date of the exchange, both the 161 million Canton Coins and the 8 million PFWs were valued at approximately $25.0 million.
Until the approval of CNTN’s shareholders was obtained, the PFWs were accounted for as a digital asset loan receivable. On the November 2025 date of exchange, the Company derecognized the 161 million Canton Coins, recognized a $24.9 million realized gain on the transfer of the Canton Coins during the fourth quarter of 2025 and recorded a $25.0 million digital asset loan receivable, included as a component of digital assets and other investments at fair value on the condensed consolidated statements of financial condition as of December 31, 2025. Until shareholder approval was obtained, the digital asset loan receivable was remeasured on a recurring basis to the fair market value of the Canton Coins, through an adjustment to unrealized gain/(loss), included as a component of other income (loss), net on the condensed consolidated statements of income. As of December 31, 2025, the digital asset loan receivable was classified within Level 2 of the fair value hierarchy. Its carrying value was determined based on the fair value of the Canton Coin, as adjusted for an allowance for credit loss. As of December 31, 2025, the fair value of the Canton Coin was an observable valuation input.
On January 30, 2026, CNTN’s shareholders approved the issuance of the PFWs and the Company derecognized the digital asset loan receivable which had a carrying value as of December 31, 2025 totaling $24.4 million, including the reversal of the allowance for credit loss of $0.2 million and previously unrealized losses totaling $0.4 million, recorded a $39.8 million investment in the PFWs and recognized a $14.8 million realized gain, included as a component of other income (loss), net on the condensed consolidated statements of income.
Subsequent to the January 30, 2026 approval of CNTN’s shareholders, the PFWs are accounted for as an equity security with a readily determinable fair value and included as a component of digital assets and other investments at fair value on the condensed consolidated statements of financial condition. The PFWs are measured at fair value based on the quoted public share price of CNTN common stock and are therefore classified within Level 2 of the fair value hierarchy as of March 31, 2026. During the three months ended March 31, 2026, the Company recognized unrealized losses related to changes of the fair value of the PFWs totaling $13.2 million, included as a component of other income (loss), net on the condensed consolidated statements of income.
As of March 31, 2026, the PFWs are not able to be sold or transferred by the Company and if exercised, one-third of the shares of common stock are also subject to lock-up restrictions on the sale or transfer of those shares through May 5, 2026.
Level 3 Roll Forward
The following table presents a summary of the changes in fair value for Level 3 assets during the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
20262025
(dollars in thousands)
Investments in Available for Sale Debt Securities
Beginning balance$24,857 $10,354 
Additions129 123 
Dispositions— — 
Total realized and unrealized gains included in other comprehensive income (loss)1,090 3,150 
Ending balance$26,076 $13,627 
Digital Assets – Canton Coins
Beginning balance$852 
Additions302 
Dispositions— 
Total realized and unrealized gains included in other income (loss), net4,221 
Ending balance$5,375 
During the three months ended March 31, 2026, the Company recognized unrealized gains relating to Level 3 assets held at March 31, 2026 totaling $1.1 million, included as a component of other comprehensive income on the accompanying condensed consolidated statements of comprehensive income.
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.
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, 2026 and December 31, 2025, 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 related parties or payable and due to related parties, 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,
20262025
(dollars in thousands)
Foreign currency forward contracts – Gross notional amount$355,106 $339,794 
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,
20262025
(dollars in thousands)
Foreign currency forward contracts not designated in accounting hedge relationship – General and administrative (expenses)/income$5,531 $(6,320)
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, 2026 and December 31, 2025 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
(dollars in thousands)
As of March 31, 2026
Assets
Cash and restricted cash$215,464 $215,464 $— $— $215,464 
Receivable from brokers and dealers and clearing organizations131,252 — 131,252 — 131,252 
Deposits with clearing organizations57,346 57,346 — — 57,346 
Accounts receivable351,009 — 351,009 — 351,009 
Other assets – Memberships in clearing organizations
3,268 — — 3,268 3,268 
Total$758,339 $272,810 $482,261 $3,268 $758,339 
Liabilities
Payable to brokers and dealers and clearing organizations$130,651 $— $130,651 $— $130,651 
Total$130,651 $— $130,651 $— $130,651 
Carrying ValueQuoted Prices in active Markets for Identical Assets
(Level 1)
 Significant Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)		Total Fair Value
(dollars in thousands)
As of December 31, 2025
Assets
Cash and restricted cash$275,179 $275,179 $— $— $275,179 
Receivable from brokers and dealers and clearing organizations8,630 — 8,630 — 8,630 
Deposits with clearing organizations58,282 58,282 — — 58,282 
Accounts receivable257,845 — 257,845 — 257,845 
Other assets – Memberships in clearing organizations
3,127 — — 3,127 3,127 
Total$603,063 $333,461 $266,475 $3,127 $603,063 
Liabilities
Payable to brokers and dealers and clearing organizations$3,363 $— $3,363 $— $3,363 
Total$3,363 $— $3,363 $— $3,363 
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.
Non-recurring Fair Value Measurements
The Company measures certain assets and liabilities at fair value on a non-recurring basis, such as assets acquired in a business combination, intangible assets, equity method investments and equity investments without readily determinable fair values for which the measurement alternative has been elected.
As of March 31, 2026 and December 31, 2025, the Company held equity method investments totaling $24.1 million and $4.5 million, respectively, included as a component of other assets on the condensed consolidated statements of financial condition. As of both March 31, 2026 and December 31, 2025, the Company also had $5.0 million in unfunded capital commitments related to its equity method investments. During the three months ended March 31, 2026 and 2025, the Company recognized an equity pickup loss of $0.4 million and none, respectively, included in other income (loss), net in the condensed consolidated statements of income, relating to its pro rata share of operating performance of its equity method investments. There were no impairments recorded on equity method investments during the three months ended March 31, 2026 and 2025.
As of March 31, 2026 and December 31, 2025, the Company held minority equity investments in various companies without readily determinable fair values totaling $74.9 million and $44.8 million, respectively, included as a component of other assets on the condensed consolidated statements of financial condition. There were no impairments or unrealized gains recorded on minority equity investments during the three months ended March 31, 2026 and 2025. Cumulative impairments on minority equity investments held as of March 31, 2026 totaled $22.7 million. Cumulative unrealized gains on minority equity investments held as of March 31, 2026 totaled $4.3 million.
The Company’s investments are subject to general contractual sale restrictions that may prohibit the transfer or sale of the investment without prior consent of the investee and/or other investors.