XML 31 R21.htm IDEA: XBRL DOCUMENT v3.23.3
FAIR VALUE MEASUREMENTS
 9 Months Ended
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 1Level 2Level 3Total
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 1Level 2Level 3Total
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.