v3.26.1
Fair Value of Financial Instruments and Other Assets
 6 Months Ended
Jun. 30, 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 June 30, 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 June 30, 2026
Assets
Cash equivalents – Money market funds and other highly liquid investments$1,846,688 $— $— $1,846,688 
Investment in available for sale debt securities (1)
— 38,615 — 38,615 
Investment in equity securities (1)
8,391 14,535 — 22,926 
Digital assets – Canton Coins (1)
230,046 — — 230,046 
Receivable and due from related parties – Foreign exchange derivative contracts
— 6,857 — 6,857 
Total assets measured at fair value$2,085,125 $60,007 $— $2,145,132 
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 accrued interest at a rate of 5% per annum, compounded annually, and was scheduled to mature on the earliest to occur of January 19, 2027, an event of default or a change in control as each term was defined in the convertible note. In the fourth quarter of 2025, the issuer announced that it entered into a definitive business combination agreement through which the issuer would become a publicly-listed company (the “Merger Transaction”), subject to customary closing conditions and regulatory approvals, at a $1.25 billion pre-money equity value, subject to customary valuation adjustments. The Merger Transaction closed on July 1, 2026. The completion of the Merger Transaction on July 1, 2026, triggered the conversion of the convertible note and accrued interest, which resulted in the Company receiving 2.9 million shares of common stock in the post-merger public company Securitize Corp. (ticker symbol “SECZ”). The Company’s shares of SECZ common stock are subject to a lock-up agreement with certain restrictions on the Company’s ability to transfer, dispose or otherwise transact through December 2026, subject to certain exceptions.
Prior to conversion, and as of June 30, 2026, the convertible note was accounted for as an available-for-sale debt security and the convertible note and accrued interest was included within digital assets and other investments at fair value on the accompanying condensed consolidated statements of financial condition at a fair value of $38.6 million and $24.9 million as of June 30, 2026 and December 31, 2025, respectively. The convertible note, including accrued interest, had an amortized cost basis of $11.1 million and $10.9 million as of June 30, 2026 and December 31, 2025, respectively. There were no credit losses recorded on the convertible note during the three or six months ended June 30, 2026 and 2025. During the three and six months ended June 30, 2026 and 2025, the Company recorded unrealized gains of $12.4 million, $0.4 million, $13.5 million and $3.5 million, respectively, as a component of other comprehensive income related to an increase in fair value of the convertible note during the periods. During the second quarter of 2026, the convertible note was reclassified from Level 3 to Level 2 of the fair value hierarchy as the valuation as of June 30, 2026 was based primarily on observable inputs from a comparable security. Previously, the convertible note was valued based on a probability-weighted expected return model that required assumptions that were both significant and unobservable.
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. During the second quarter of 2026, the Canton Network implemented 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 (the “Lifetime Super Validator Coins”). Beginning in the second quarter of 2026, the amount of Super Validator weight assigned to the Company is based in part 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 “Canton Coin Lockup Restrictions”). As of June 30, 2026, the Company has elected Tier 1 of the Locking Commitment framework which allows it to retain 100% of its current Super Validator weight, and, as a result, 70% of its Lifetime Super Validator Coins are subject to the Canton Coin Lockup Restrictions.
During the three and six months ended June 30, 2026 and 2025, the Company recognized $1.7 million, $1.8 million, $5.4 million and $2.1 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 June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
Quantity of CoinsCost BasisFair ValueQuantity of CoinsCost BasisFair Value
(dollars in thousands)
Canton Coins (1)
1.6 billion$16,827 $230,046 1.6 billion$11,461 $242,729 
(1)As of June 30, 2026, the Company was restricted from transferring to third parties a total of 1.3 billion of its Canton Coins valued at $181.6 million as a result of its election under the Canton Coin Lockup Restrictions described above, which could affect the Company’s ability to sell these assets, including during periods of price volatility or reduced liquidity. The Company had no restrictions on its ability to transfer any of its Canton Coins as of December 31, 2025.
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 June 30, 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 and six months ended June 30, 2026 and 2025, the Company recognized an unrealized loss of $15.1 million, an unrealized gain of $18.1 million, an unrealized loss of $18.0 million and an unrealized gain of $22.3 million, respectively, related to changes in the fair value of Canton Coins 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 each of the three and six months ended June 30, 2026 and 2025.
Investment in Canton Strategic Holdings
In November 2025, the Company exchanged approximately 161 million Canton Coins for 8.1 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 8.1 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.
During both the three and six months ended June 30, 2026, the Company exercised 3.0 million of its PFWs into an equivalent number of shares of CNTN common stock.
Subsequent to the January 30, 2026 approval of CNTN’s shareholders, the PFWs and any shares of CNTN common stock held are both 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 publicly traded shares of CNTN common stock are classified within Level 1 of the fair value hierarchy while 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 June 30, 2026. During the three and six months ended June 30, 2026, the Company recognized unrealized losses totaling $3.7 million and $16.8 million, respectively, related to changes in the fair value of the PFWs and shares of CNTN common stock, included as a component of other income (loss), net on the condensed consolidated statements of income.
As of June 30, 2026, the PFWs are not able to be sold or transferred by the Company.
Level 3 Roll Forward
The following table presents a summary of the changes in fair value for Level 3 assets during the three and six months ended June 30, 2026 and 2025:
Three Months EndedSix Months Ended
June 30, June 30,
2026202520262025
(dollars in thousands)
Investments in Available for Sale Debt Securities
Beginning balance$26,076 $13,627 $24,857 $10,354 
Transfer out of Level 3 (1)
(26,076)— (24,857)— 
Additions— 130 — 253 
Dispositions— — — — 
Total realized and unrealized gains included in other comprehensive income (loss)— 375 — 3,525 
Ending balance$— $14,132 $— $14,132 
Digital Assets – Canton Coins
Beginning balance$5,375 $852 
Additions1,756 2,058 
Dispositions— — 
Total realized and unrealized gains included in other income (loss), net18,065 22,286 
Ending balance$25,196 $25,196 
(1)Transfers between levels of the fair value hierarchy occur when there are changes in the observability of significant valuation inputs and/or the significance of valuation inputs and are reported at the beginning of the reporting period in which they occur.
During the three and six months ended June 30, 2025, the Company recognized unrealized gains relating to Level 3 assets held at June 30, 2025 totaling $18.1 million and $22.3 million, respectively, included as a component of other income (loss), net on the accompanying condensed consolidated statements of income and $0.4 million and $3.5 million, respectively, 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 June 30, 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:
June 30,December 31,
20262025
(dollars in thousands)
Foreign currency forward contracts – Gross notional amount$357,502 $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 EndedSix Months Ended
June 30,June 30,
2026202520262025
(dollars in thousands)
Foreign currency forward contracts not designated in accounting hedge relationship – General and administrative (expenses)/income$4,672 $(14,488)$10,203 $(20,808)
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 June 30, 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 June 30, 2026
Assets
Cash and restricted cash$212,241 $212,241 $— $— $212,241 
Receivable from brokers and dealers and clearing organizations11,491 — 11,491 — 11,491 
Deposits with clearing organizations55,477 55,477 — — 55,477 
Accounts receivable309,368 — 309,368 — 309,368 
Other assets – Memberships in clearing organizations
3,269 — — 3,269 3,269 
Total$591,846 $267,718 $320,859 $3,269 $591,846 
Liabilities
Payable to brokers and dealers and clearing organizations$7,649 $— $7,649 $— $7,649 
Total$7,649 $— $7,649 $— $7,649 
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 June 30, 2026 and December 31, 2025, the Company held equity method investments totaling $23.7 million and $4.5 million, respectively, included as a component of other assets on the condensed consolidated statements of financial condition. As of both June 30, 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 and six months ended June 30, 2026, the Company recognized an equity pickup loss of $0.5 million and $0.9 million, 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. No income or loss from equity method investments was recognized during the three or six months ended June 30, 2025. There were no impairments recorded on equity method investments during the three or six months ended June 30, 2026 and 2025.
As of June 30, 2026 and December 31, 2025, the Company held minority equity investments in various companies without readily determinable fair values totaling $108.1 million and $44.8 million, respectively, included as a component of other assets on the condensed consolidated statements of financial condition.
During the three and six months ended June 30, 2026, and as of May 2026, the Company recorded unrealized gains totaling $26.6 million on its minority equity investments based on the price from observable transactions of similar investments of the same issuers. The unrealized gains are included in other income (loss) in the consolidated statements of income. There were no impairments on minority equity investments during the three or six months ended June 30, 2026. During the three and six months ended June 30, 2025, and as of June 30, 2025, the Company recorded an impairment totaling $5.4 million on a minority equity investment, as the investment’s carrying amount exceeded its fair value. The investment impairment is included in other income (loss) in the condensed consolidated statements of income. The investment’s fair value was determined using a discounted cash flow model, using primarily Level 3 inputs. Significant unobservable inputs included a discount rate of 25.0% and a perpetual growth rate of 3.0%. Cumulative impairments on minority equity investments held as of June 30, 2026 totaled $22.7 million. Cumulative unrealized gains on minority equity investments held as of June 30, 2026 totaled $30.9 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.