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Income Taxes | 3 Months Ended
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Mar. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 20. Income Taxes Effective Income Tax Rate – Three Months Ended March 31, 2023 and March 31, 2022 The Company’s effective income tax rate during the three months ended March 31, 2023 was 7.9% resulting in income tax expense of $1,383. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a non-taxable gain on revaluation of deferred consideration and a $1,353 reduction in unrecognized tax benefits (including interest and penalties). These items were partly offset by a non-deductible loss on extinguishment of our convertible notes and an increase in the deferred tax asset valuation allowance on losses recognized on the Company’s investments. The Company’s effective income tax rate during the three months ended March 31, 2022 of 62.0% resulted in an income tax benefit of $16,713. The effective income tax rate differs from the federal statutory tax rate of 21% primarily due to a $19,897 reduction in unrecognized tax benefits (including interest and penalties), a lower tax rate on foreign earnings and tax windfalls associated with the vesting of stock-based compensation awards. These items were partly offset by a non-taxable loss on revaluation of deferred consideration and an increase in the deferred tax asset valuation allowance on losses recognized on securities owned. Deferred Tax Assets A summary of the components of the Company’s deferred tax assets at March 31, 2023 and December 31, 2022 is as follows:
|  |  |  | March 31, 2023 |  |  | December 31, 2022 |
| Deferred tax assets: |  |  |  |  |  |  |  |
| Capital losses |  | $ | 17,740 |  |  | $ | 17,541 |
| Unrealized losses |  |  | 4,781 |  |  |  | 3,821 |
| NOLs—Foreign |  |  | 1,625 |  |  |  | 1,609 |
| Accrued expenses |  |  | 1,527 |  |  |  | 6,030 |
| Goodwill and intangible assets |  |  | 1,038 |  |  |  | 1,085 |
| Stock-based compensation |  |  | 865 |  |  |  | 1,526 |
| Interest carryforwards |  |  | 476 |  |  |  | — |
| Operating lease liabilities |  |  | 260 |  |  |  | 313 |
| Foreign currency translation adjustment |  |  | 254 |  |  |  | 173 |
| NOLs—U.S. |  |  | 127 |  |  |  | 255 |
| Outside basis differences |  |  | 122 |  |  |  | 122 |
|  |  |  | March 31, 2023 |  |  | December 31, 2022 |
| Other |  |  | 355 |  |  |  | 341 |
| Deferred tax assets |  |  | 29,170 |  |  |  | 32,816 |
| Deferred tax liabilities: |  |  |  |  |  |  |  |
| Fixed assets and prepaid assets |  |  | 150 |  |  |  | 278 |
| Unremitted earnings—European subsidiaries |  |  | 246 |  |  |  | 205 |
| Right of use assets—operating leases |  |  | 260 |  |  |  | 313 |
| Deferred tax liabilities |  |  | 656 |  |  |  | 796 |
| Total deferred tax assets less deferred tax liabilities |  |  | 28,514 |  |  |  | 32,020 |
| Less: Valuation allowance |  |  | (22,643) |  |  |  | (21,484) |
| Deferred tax assets, net |  | $ | 5,871 |  |  | $ | 10,536 |
Net Operating and Capital Losses—U.S. The Company’s tax effected net operating losses (“NOLs”) at March 31, 2023 were $127, which expire in 2024. The net operating loss carryforwards have been reduced by the impact of annual limitations described in the Internal Revenue Code Section 382 that arose as a result of an ownership change. The Company’s tax effected capital losses at March 31, 2023 were $17,740. These capital losses expire between the years 2023 and 2028. Net Operating Losses—Europe One of the Company’s European subsidiaries generated NOLs outside the U.S. These tax effected NOLs, all of which are carried forward indefinitely, were $1,625 at March 31, 2023. Valuation Allowance The Company’s valuation allowance has been established on its net capital losses, unrealized losses and outside basis differences, as it is more-likely-than-not that these deferred tax assets will not be realized. Uncertain Tax Positions Tax positions are evaluated utilizing a two-step process. The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. In connection with the ETFS Acquisition, the Company accrued a liability for uncertain tax positions and interest and penalties at the acquisition date. The Company also recorded an offsetting indemnification asset provided by ETFS Capital as part of its agreement to indemnify the Company for any potential claims. The table below sets forth the aggregate changes in the balance of these gross unrecognized tax benefits:
|  | Total |  | Unrecognized Tax Benefits |  | Interest and Penalties
Balance at January 1, 2023 |  | $ | 1,353 |  |  | $ | 957 |  |  | $ | 396 |
Decrease—Lapse of statute of limitations |  |  | (1,353 | ) |  |  | (957 | ) |  |  | (396 | )
Balance at March 31, 2023 |  | $ | — |  |  | $ | — |  |  | $ | — |
| (1) | The gross unrecognized tax benefits were accrued in British pounds.
Income Tax Examinations The Company is subject to U.S. federal income tax as well as income tax of multiple state, local and certain foreign jurisdictions. As of March 31, 2023, with few exceptions, the Company was no longer subject to income tax examinations by any taxing authority for the years before 2018. Undistributed Earnings of Foreign Subsidiaries ASC 740-30 Income Taxes provides guidance that US companies do not need to recognize tax effects on foreign earnings that are indefinitely reinvested. The Company repatriates earnings of its foreign subsidiaries and therefore has recognized a deferred tax liability of $246 and $205 at March 31, 2023 and December 31, 2022, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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