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DERIVATIVES (Tables)
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Description of derivatives and related hedge accounting designation
The following outlines the Company’s derivatives, which were all embedded forward contracts as of March 31, 2024:
Location of Host Contract and Derivative on Balance SheetsDescription of Derivative
Accounts receivable, net
The Company provided services for which, under the contract, the counterparty pays a fixed amount in crypto assets in the future.
Crypto asset borrowings
The Company borrowed crypto assets that resulted in the obligation to deliver a fixed amount of crypto assets in the future. See Note 6. Collateralized Arrangements and Financing for additional information.
Obligation to return collateral
The Company receives crypto asset collateral that results in the obligation to return collateral received as a fixed amount of crypto assets. See Note 6. Collateralized Arrangements and Financing for additional information.
Accrued expenses and other current liabilities
The Company entered into arrangements that result in the obligation to deliver a fixed amount of crypto assets in the future.
Schedule of the notional amount of derivative contracts outstanding
The following table summarizes the notional amounts of derivative instruments outstanding, measured in U.S. dollar equivalents (in thousands):
March 31,December 31,
20242023
Designated as hedges
Crypto asset borrowings(1)
$— $31,666 
Not designated as hedging instrument
Accounts receivable denominated in crypto assets21,362 16,335 
Crypto asset borrowings
158,518 12,503 
Obligation to return loan collateral75,424 — 
Other payables denominated in crypto assets33,012 20,092 
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(1)    Prior to the adoption of ASU 2023-08, the Company applied hedge accounting using these derivative instruments in qualifying fair value hedges to hedge the fair value exposure of crypto asset prices for the crypto assets borrowed. As of January 1, 2024, the date of ASU 2023-08 adoption, these derivative instruments have been dedesignated.
The following tables summarize information on derivative assets and liabilities that are reflected on the Condensed Consolidated Balance Sheets, by accounting designation (in thousands):
Gross Derivative AssetsGross Derivative Liabilities
Not Designated as HedgesDesignated as HedgesTotal Derivative AssetsNot Designated as HedgesDesignated as HedgesTotal Derivative Liabilities
March 31, 2024
Accounts receivable denominated in crypto assets$41,263 $— $41,263 $— $— $— 
Crypto asset borrowings264 — 264 114,551 — 114,551 
Obligation to return loan collateral— — — 31,186 — 31,186 
Other payables denominated in crypto assets2,687 — 2,687 4,367 — 4,367 
Total fair value of derivative assets and liabilities$44,214 $— $44,214 $150,104 $— $150,104 
December 31, 2023
Accounts receivable denominated in crypto assets$28,065 $— $28,065 $— $— $— 
Crypto asset borrowings26 (25)1 5,290 13,522 18,812 
Other payables denominated in crypto assets2,511 — 2,511 3,101 — 3,101 
Total fair value of derivative assets and liabilities$30,602 $(25)$30,577 $8,391 $13,522 $21,913 
Schedule of gains (losses) recorded in income
Gains (losses) on derivative instruments recognized in the Condensed Consolidated Statements of Operations were as follows (in thousands):
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
DerivativesHedged Items
Income Statement Impact(4)
DerivativesHedged ItemsIncome Statement Impact
Designated as hedging instrument
Crypto asset futures(1)
$— $— $— $(43,116)$48,491 $5,375 
Crypto asset borrowings(1)
— — — (91,714)48,600 (43,114)
Not designated as hedging instrument
Accounts receivable denominated in crypto assets(2)
13,795 — 13,795 42,924 — 42,924 
Crypto asset borrowings(3)
(95,914)— (95,914)— — — 
Obligation to return loan collateral(3)
(31,186)— (31,186)— — — 
Other payables denominated in crypto assets(1)
(1,721)— (1,721)439 — 439 
Other(1)
— — — (213)— (213)
Total$(115,026)$— $(115,026)$(91,680)$97,091 $5,411 
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(1)Changes in fair value are recorded in Other operating expense (income), net in the Condensed Consolidated Statements of Operations.
(2)Changes in fair value are recorded in Other (income) expense, net or Other operating expense (income), net in the Condensed Consolidated Statements of Operations depending on the nature of the receivable.
(3)Changes in fair value are recorded in Transaction expense in the Condensed Consolidated Statements of Operations.
(4)Though the Company has dedesignated crypto assets borrowed that previously qualified as fair value hedges, the impact of derivatives is naturally offset, at least in part, in the Condensed Consolidated Statements of Operations by the impact of associated naturally offsetting positions. See Quantitative and Qualitative Information about Market Risk in Part I, Item 3 of this Quarterly Report on Form 10-Q for more information.