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FAIR VALUE MEASUREMENTS | 9 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):
| September 30, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Cash equivalents(1) | $ | 3,680,337 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,680,337 |
Customer custodial funds(2) | 2,541,561 |  |  | — |  |  | — |  |  | 2,541,561 |
Crypto assets held(3) | 56,564 |  |  | — |  |  | — |  |  | 56,564 |
Derivative assets(4) | — |  |  | 10,455 |  |  | — |  |  | 10,455 |
Crypto asset loans receivable(5) | — |  |  | 57,517 |  |  | — |  |  | 57,517 |
Safeguarding customer crypto assets | — |  |  | 114,291,909 |  |  | — |  |  | 114,291,909 |
Total assets | $ | 6,278,462 |  |  | $ | 114,359,881 |  |  | $ | — |  |  | $ | 120,638,343 |
Liabilities |  |  |  |  |  |  |
Derivative liabilities(4) | $ | — |  |  | $ | 4,833 |  |  | $ | — |  |  | $ | 4,833 |
Safeguarding customer crypto liabilities | — |  |  | 114,291,909 |  |  | — |  |  | 114,291,909 |
Total liabilities | $ | — |  |  | $ | 114,296,742 |  |  | $ | — |  |  | $ | 114,296,742 |
| December 31, 2022
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Cash equivalents(1) | $ | 2,250,065 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,250,065 |
Customer custodial funds(2) | 2,088,132 |  |  | — |  |  | — |  |  | 2,088,132 |
Crypto assets held(3) | 201,565 |  |  | — |  |  | — |  |  | 201,565 |
Derivative assets(4) | — |  |  | 3,838 |  |  | — |  |  | 3,838 |
Crypto asset loans receivable(5) | — |  |  | 85,826 |  |  | — |  |  | 85,826 |
Safeguarding customer crypto assets | — |  |  | 75,413,188 |  |  | — |  |  | 75,413,188 |
Total assets | $ | 4,539,762 |  |  | $ | 75,502,852 |  |  | $ | — |  |  | $ | 80,042,614 |
Liabilities |  |  |  |  |  |  |
Derivative liabilities(4) | $ | — |  |  | $ | 19,583 |  |  | $ | — |  |  | $ | 19,583 |
Contingent consideration arrangement | — |  |  | — |  |  | 1,855 |  |  | 1,855 |
Safeguarding customer crypto liabilities | — |  |  | 75,413,188 |  |  | — |  |  | 75,413,188 |
Total liabilities | $ | — |  |  | $ | 75,432,771 |  |  | $ | 1,855 |  |  | $ | 75,434,626 |
__________________ (1)Represents money market funds. Excludes $1.3 billion of corporate cash held in deposit at banks and $163.5 million held at venues, which were not measured and recorded at fair value as of September 30, 2023. Excludes $2.0 billion of corporate cash held in deposit at banks and $143.2 million held at venues, which were not measured and recorded at fair value as of December 31, 2022. (2)Represents money market funds. Excludes customer custodial funds of $0.9 billion and $3.0 billion held in deposit at financial institutions and not measured and recorded at fair value as of September 30, 2023 and December 31, 2022, respectively. (3)Includes crypto assets held that have been designated as hedged items in fair value hedges and excludes crypto assets of $399.4 million and $222.8 million held at cost as of September 30, 2023 and December 31, 2022, respectively. (4)See Note 13. Derivatives for additional details. (5)Includes the embedded derivative asset of $9.5 million and $0.3 million and embedded derivative liability of $1.2 million and $6.0 million related to the Company's crypto asset loans receivable as of September 30, 2023 and December 31, 2022, respectively. See Note 13. Derivatives for additional details. The Company did not make any transfers into or out of Level 3 of the fair value hierarchy during the nine months ended September 30, 2023 and the year ended December 31, 2022.Safeguarding customer crypto assets and liabilities represent the Company’s obligation to safeguard customer crypto assets. Accordingly, the Company has valued the assets and liabilities using quoted market prices for the underlying crypto assets which is based on Level 2 inputs. Assets and liabilities measured and recorded at fair value on a non-recurring basis The Company’s non-financial assets, such as goodwill, intangible assets, property and equipment, and crypto assets held but not designated in hedging relationships are adjusted to fair value when an impairment charge is recognized. The Company’s strategic investments are also measured at fair value on a non-recurring basis. Such fair value measurements are based predominantly on Level 3 inputs. The carrying value of the Company’s strategic investments is predominantly adjusted based on an Option-Pricing Model that uses publicly available market data of comparable companies and other unobservable inputs including expected volatility, expected time to liquidity, adjustments for other company-specific developments, and the rights and obligations of the securities the Company holds. Fair value of crypto assets held are predominantly based on Level 1 inputs. Assets and liabilities not measured and recorded at fair value The Company’s financial instruments, including certain cash and cash equivalents, restricted cash, certain customer custodial funds, USDC, customer custodial cash liabilities, short-term borrowings and loans receivable are carried at amortized cost, which approximates their fair value. If these financial instruments were recorded at fair value, they would be based on Level 1 inputs, except for short-term borrowings and loans receivable which would be based on Level 2 and Level 3 inputs, respectively. The Company estimates the fair value of its 2026 Convertible Notes and Senior Notes based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. As of September 30, 2023, the estimated fair value of the 2026 Convertible Notes and Senior Notes were $1.0 billion and $1.2 billion, respectively.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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