v3.26.1
DERIVATIVES
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES
NOTE 9—DERIVATIVES
The table below presents our derivative assets and liabilities as shown on our Condensed Consolidated Balance Sheets:
(in thousands)March 31, 2026
ClassificationAssetsLiabilities
Derivatives not designated as hedges:
Digital assets pledged as collateralDigital assets pledged as collateral$111,829 $— 
Digital asset financing arrangementsDigital asset financing arrangements— 82,986 
Accrued crypto loan borrowing feesAccounts payable and accrued expenses— 184 
Total$111,829 $83,170 
(in thousands)December 31, 2025
ClassificationAssetsLiabilities
Derivatives not designated as hedges:
Digital assets pledged as collateralDigital assets pledged as collateral$103,943 $— 
Digital asset financing arrangementsDigital asset financing arrangements— 67,521 
Accrued crypto loan borrowing feesAccounts payable and accrued expenses— 256 
Total$103,943 $67,777 
The table below presents the effect of derivative instruments, included within (Loss) gain from derivative instruments as stated on our Condensed Consolidated Statements of Operations. We did not have derivative instruments as of March 31, 2025:
(in thousands)Three Months Ended
March 31, 2026
Digital assets pledged as collateral$(45,825)
Digital asset financing arrangements22,869 
Accounts payable118 
Total$(22,838)
DIGITAL ASSET FINANCING ARRANGEMENTS
Term Loans
On July 25, 2025, we entered into a master loan agreement under which we may borrow digital assets or cash. Each loan is documented in a separate loan request which sets forth the specific terms, including principal amount, fees, collateral requirements, and the date on which the loan is to commence and mature. The terms of the master loan agreement last one year and automatically renew for successive one year terms annually, unless terminated by either party.
During the first quarter 2026, we renewed a loan under our master loan agreement, where we repaid and subsequently borrowed 60 thousand SOL or $12.9 million (using exchange rates as of the date the SOL was repaid and borrowed). We primarily used the proceeds from the loan requests for SOL decentralized finance (“DeFi”) activities. The previously mentioned loan request has a three month maturity with an annual contractual borrowing fee of 13.0%, which is calculated daily based on 360-days and payable on the loan maturity date. Under the terms of the loan request, we are required to post collateral in the form of the digital asset borrowed or cash, which is calculated as a percentage of the total loan value, at 300.0% and maintain a minimum collateral coverage
of 200.0%. If the collateral coverage declines to 150.0% or lower and is not remediated in a timely manner, the lender has the right to liquidate some or all of the posted collateral. The lender has a security interest in the collateral assets through repayment of the loan. We derecognize the SOL provided as collateral and record an asset on our Condensed Consolidated Balance Sheets. In the event we repay the loan prior to the maturity date, we shall pay the lender a fee equal to 20.0% of the borrowing fee that would have accrued from the date of the repayment until the maturity date of the loan. SOL that we borrow is included in Digital assets, at fair value as stated on our Condensed Consolidated Balance Sheets.
Open-Term Loans
On February 23, 2026, we entered into a loan request under the previously mentioned master loan agreement, where we borrowed $4.0 million USD Coin ("USDC"). The loan has no maturity date and the lender is able to request repayment at any time, at which point we have one business day to settle the loan. Conversely, we can settle the loan at any time without penalties. The loan request has an annual contractual borrowing fee of 10.0%, which is calculated daily based on 360-days and payable on repayment of the loan. Under the terms of the loan request, we are required to post collateral in the form of SOL, which is calculated as a percentage of the total loan value, which is 200% and we are to maintain a minimum collateral coverage of 175%. If the collateral coverage declines to 125% or lower and is not remediated in a timely manner, the lender has the right to liquidate some or all of the posted collateral. The lender has a security interest in the collateral asset through repayment of the loan. We derecognize the SOL provided as collateral and record an asset on our Condensed Consolidated Balance Sheets.
As of March 31, 2026, digital asset term loans outstanding were $17.7 million and we had $46.5 million of posted collateral which is recorded within Digital assets pledged as collateral as stated on our Condensed Consolidated Balance Sheets. Since the value of the posted collateral exceeded the associated liability, our net economic exposure is effectively zero. During the three months ended March 31, 2026, total borrowing fees recognized within Interest expense, as stated on our Condensed Consolidated Statements of Operations, was $0.5 million.
Collateralized Financing Arrangements
We enter into digital asset financing arrangements through DeFi protocols that allow digital assets to be deposited as collateral in order to obtain borrowings of additional digital assets. We may redeposit these borrowed assets into lending protocols and subsequently borrow additional assets against those deposits. This strategy is intended to increase our exposure to staking rewards, lending yields and other protocol incentives. The borrowed digital assets do not have a specified maturity date and are repayable at our option at any time. The interest rate on these borrowings are established by each DeFi protocol and are variable. The interest rate is determined based on the borrow demand for each digital asset on the DeFi protocol. Interest is calculated daily and payable on the date repayment is made. We do not have an explicit right of offset under the terms of the collateralized financing arrangements and present the associated liabilities and assets on a gross basis. Through the first quarter 2026, we received proceeds of $78.2 million (using exchange rates as of the date the digital assets were borrowed) and repaid a total of $43.8 million (using exchange rates as of the date the digital assets were repaid). We used the proceeds from these collateralized financing arrangements for SOL DeFi activities.
We derecognize the digital assets provided as collateral related to these borrowings and record an asset on our Condensed Consolidated Balance Sheets. As of March 31, 2026, we had $65.3 million of posted collateral relating to our collateralized financing arrangements which is recorded within Digital assets pledged as collateral as stated on our Condensed Consolidated Balance Sheets. Our net economic impact related to our collateralized financing arrangements was zero as the outstanding balance and related collateral are the same amount.
The table below shows our outstanding collateralized financing arrangements in our Condensed Consolidated Balance Sheets:
(in thousands)March 31, 2026December 31, 2025
Solana (SOL)$41,885 $29,315 
PayPal USD (PYUSD)12,358 12,062 
Global Dollar (USDG)8,256 — 
Other(a)
2,782 5,598 
Total$65,281 $46,975 
(a) No other digital asset or stablecoin accounted for 10% or more of total collateralized financing arrangements.