6. DIGITAL ASSETS HOLDINGS

Digital Assets

Effective January 1, 2024, the Company early adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with changes recognized in net income each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. As a result of the Company’s early adoption of ASU 2023-08, the Company recorded a $21.2 million increase to digital assets and a $21.2 million decrease to accumulated deficit on the consolidated balance sheets as of the beginning of the quarter ended March 31, 2024.

The following table presents the Company’s significant digital assets holdings as of June 30, 2026:

The cost basis is equal to the post-impairment value of all BTC and ETH held as of the adoption of ASU 2023-08 on January 1, 2024. For BTC and ETH earned subsequent to the adoption of ASU 2023-08, the cost basis of the BTC and ETH represents the valuation at the time the Company determined for revenue recognition purposes.

The following table presents a roll-forward of BTC for the six months ended June 30, 2026, based on the fair value model under ASU 2023-08:

For the additions of BTC generated by the Company’s mining business, see Note 3. Revenue from Contracts with Customers.

Bitcoin is sold on a FIFO basis. For the six months ended June 30, 2026, losses from the sales of bitcoin are included in change in fair value of BTC which is included in the consolidated statements of operations under the caption “Losses on digital assets”.

The following table presents a roll-forward of ETH for the six months ended June 30, 2026, based on the fair value model under ASU 2023-08:

For the additions of ETH generated by the Company’s ETH staking business, see Note 3. Revenue from Contracts with Customers.

ETH is sold on a FIFO basis. For the six months ended June 30, 2026, losses from the sales of ETH are included in change in fair value of ETH which is included in the consolidated statements of operations under the caption “Losses on digital assets”.  

Digital Intangible Assets 

The following table presents the Company’s digital intangible assets holdings as of June 30, 2026.

The impairment amount represents the cumulative impairment loss attributable to the LsETH balance held as of June 30, 2026 and is included within the total impairment loss of $46.0 million recognized during the six months ended June 30, 2026.

The following table presents a roll-forward of our LsETH holdings for the six months ended June 30, 2026, based on the cost less impairment model in accordance with ASC 350-30.

For the three months ended June 30, 2026 and June 30, 2025, the Company recognized an impairment loss of $nil and $nil, respectively. For the six months ended June 30, 2026 and June 30, 2025, the Company recognized an impairment loss of $46.0 million and $nil, respectively, related to its holdings of LsETH in accordance with ASC 350-30. The impairment is presented on “impairment of digital intangible assets” in the condensed consolidated statement of operations.