COLLATERAL (Tables)

6 Months Ended

Jun. 30, 2023

The following is a summary of the Company’s collateral positions:

Type of Collateral

Description of Collateral

Location on
Balance Sheets

Assets pledged as collateral

The Company enters into fiat and crypto asset borrowing arrangements with certain institutional customers that require the Company to post collateral in the form of fiat or crypto assets, including stablecoins, in which the lender may have the right to sell, repledge or rehypothecate such collateral without the Company’s consent. The Company also enters into certain derivative contracts which requires the Company to post collateral in the form of fiat.

The Company is required to maintain a collateral to loan ratio per the borrowing arrangements, and in the event that crypto asset prices rise, the Company will have to post additional collateral to maintain required collateral ratios.

If the lender has the right to use the collateral or if the collateral is fiat, the Company presents the collateral pledged as a right to receive the collateral. The lender is not obligated to return the collateral if the Company defaults on its borrowings. The Company has not defaulted on any of its borrowings.

Prepaid expenses and other current assets

Obligation to return collateral

For loans receivable and crypto asset loans receivable, the Company requires borrowers to post collateral for which it then has an obligation to return the collateral to the borrower.

As of June 30, 2023, the collateral requirements ranged from 130% to 250% of the fair value of the loan, and the borrower is required to pledge additional assets to maintain their required collateral percentage. The collateral pledged by borrowers is held on the Company’s platform and the Company may have the right to use the collateral.

For loans receivable, the Company does not record collateral received unless the Company has both a right to use the collateral and has sold the collateral.

For crypto asset loans receivable, if the Company has the right to use collateral denominated in USDC or crypto assets, or if the collateral is fiat, the Company records the collateral as an asset with a corresponding obligation to return collateral. The Company is not obligated to return the collateral if the borrower defaults.

Accrued expenses and other current liabilities

Off-balance sheet collateral arrangements

The Company may post collateral with lenders which are not recognized as assets pledged as collateral as they do not meet the derecognition criteria. This collateral continues to be shown on the Company’s balance sheets in its original line item. The Company had $27.7 million and $— million of such collateral posted as of June 30, 2023 and December 31, 2022, respectively. The balance as of June 30, 2023 was composed of only USDC.

The Company may receive non-cash collateral from borrowers where the Company does not have a right to use the collateral and does not recognize it on its balance sheets since the collateral does not meet the recognition criteria. The Company had $63.8 million and $4.8 million of such collateral received as of June 30, 2023 and December 31, 2022, respectively.

Collateral posted: Original line item

Collateral received: Not recognized on balance sheet

Schedule of collateral posted and received

As of June 30, 2023 and December 31, 2022, the Company’s assets pledged as collateral and obligation to return collateral consisted of the following (in thousands, except units):


	June 30, 2023
	Units	Fair Value
Assets pledged as collateral
USDC(1)	54,493,037	$	54,493
Bitcoin(2)	815	24,831
Fiat	N/A	85
Total		$	79,409

Obligation to return collateral
Fiat	N/A	$	1,403
Total		$	1,403


	December 31, 2022
	Units	Fair Value
Assets pledged as collateral
USDC(1)	47,633,897	$	47,634
Bitcoin(2)	650	10,743
Fiat	N/A	41,630
Total		$	100,007

Obligation to return collateral
USDC	26,873,830	$	26,874
Total		$	26,874

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(1) As of June 30, 2023 and December 31, 2022, the Company had pledged USDC that served exclusively as collateral for certain crypto asset borrowings with a fair value of at least 100% of the loan amount outstanding.

(2) As of June 30, 2023 and December 31, 2022, the Company had pledged Bitcoin that served exclusively as collateral for fiat loans with a fair value of at least 100% and 110%, respectively, of the loan amount outstanding.