XML 26 R11.htm IDEA: XBRL DOCUMENT
v3.23.3

Fair Value Measurements | 9 Months Ended
--- | ---
Sep. 30, 2023
Fair Value Measurements [Abstract] |
Fair Value Measurements | 4. Fair Value Measurements The fair value of financial instruments is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the transparency of inputs as follows: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 – Instruments whose significant drivers are unobservable. The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The tables below summarize the categorization of the Company’s assets and liabilities measured at fair value. During the three and nine months ended September 30, 2023 and 2022, there were no transfers between Levels 2 and 3.
|  | September 30, 2023
|  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |
Recurring fair value measurements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 329 |  |  | $ | 329 |  |  | $ | — |  |  | $ | — |
Financial instruments owned, at fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ETFs |  |  | 42,382 |  |  |  | 42,382 |  |  |  | — |  |  |  | — |
Pass-through GSEs |  |  | 24,419 |  |  |  | — |  |  |  | 24,419 |  |  |  | — |
Other assets—seed capital (WisdomTree Digital Funds): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries |  |  | 4,851 |  |  |  | 4,851 |  |  |  | — |  |  |  | — |
Equities |  |  | 5,405 |  |  |  | 5,405 |  |  |  | — |  |  |  | — |
Fixed income |  |  | 1,893 |  |  |  | — |  |  |  | 1,893 |  |  |  | — |
Investments in Convertible Notes (Note 7): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securrency, Inc.—convertible note |  |  | 16,190 |  |  |  | — |  |  |  | — |  |  |  | 16,190 |
Securrency, Inc.—secured convertible note |  |  | 12,925 |  |  |  | — |  |  |  | — |  |  |  | 12,925 |
Fnality International Limited—convertible note |  |  | 7,453 |  |  |  | — |  |  |  | — |  |  |  | 7,453 |
Total |  | $ | 115,847 |  |  | $ | 52,967 |  |  | $ | 26,312 |  |  | $ | 36,568 |
Non-recurring fair value measurements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securrency, Inc.—Series A convertible preferred stock(1) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Securrency, Inc.—Series B convertible preferred stock(1) |  |  | 305 |  |  |  | — |  |  |  | — |  |  |  | 305 |
Other investments(1) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 305 |  |  | $ | — |  |  | $ | — |  |  | $ | 305 |
_____________________________ (1) Fair value determined on September 30, 2023.
|  | December 31, 2022
|  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |
Recurring fair value measurements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 930 |  |  | $ | 930 |  |  | $ | — |  |  | $ | — |
Financial instruments owned, at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ETFs |  |  | 23,772 |  |  |  | 23,772 |  |  |  | — |  |  |  | — |
U.S. treasuries |  |  | 2,980 |  |  |  | 2,980 |  |  |  | — |  |  |  | — |
Pass-through GSEs |  |  | 96,837 |  |  |  | 23,290 |  |  |  | 73,547 |  |  |  | — |
Corporate bonds |  |  | 885 |  |  |  | — |  |  |  | 885 |  |  |  | — |
Other assets—seed capital (WisdomTree Digital Funds) |  |  | 1,765 |  |  |  | — |  |  |  | 1,765 |  |  |  | — |
Investments in Convertible Notes (Note 7) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securrency, Inc.—convertible note |  |  | 14,500 |  |  |  | — |  |  |  | — |  |  |  | 14,500 |
Fnality International Limited—convertible note |  |  | 6,921 |  |  |  | — |  |  |  | — |  |  |  | 6,921 |
Total |  | $ | 148,590 |  |  | $ | 50,972 |  |  | $ | 76,197 |  |  | $ | 21,421 |
Non-recurring fair value measurements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other investments(1) |  | $ | 312 |  |  | $ | — |  |  | $ | — |  |  | $ | 312 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recurring fair value measurements: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred consideration—gold payments (Note 9) |  | $ | 200,290 |  |  | $ | — |  |  | $ | — |  |  | $ | 200,290 |
_____________________________ (1) Fair value determined on May 10, 2022. Recurring Fair Value Measurements – Methodology Cash Equivalents (Note 3) – These financial assets represent cash invested in highly liquid investments with original maturities of less than 90 days. These investments are valued at par, which approximates fair value, and are classified as Level 1 in the fair value hierarchy. Financial instruments owned (Note 5) – Financial instruments owned are investments in ETFs, pass-through GSEs, U.S. treasuries, equities and fixed income. ETFs, U.S. treasuries and equities are generally traded in active, quoted and highly liquid markets and are therefore classified as Level 1 in the fair value hierarchy. Pricing of pass-through GSEs and fixed income includes consideration given to collateral characteristics and market assumptions related to yields, credit risk and timing of prepayments and are therefore generally classified as Level 2. Pass-through GSE positions invested in through a fund structure with a quoted market price on an exchange are generally classified as Level 1. Fair Value Measurements classified as Level 3 – The following table presents a reconciliation of beginning and ending balances of recurring fair value measurements classified as Level 3:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Investments in Convertible Notes (Note 7) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 30,602 |  |  | $ | 11,712 |  |  | $ | 21,421 |  |  | $ | — |
Purchases |  |  | — |  |  |  | — |  |  |  | 10,000 |  |  |  | 11,863 |
Net unrealized gains(1) |  |  | 5,966 |  |  |  | 327 |  |  |  | 5,147 |  |  |  | 176 |
Ending balance |  | $ | 36,568 |  |  | $ | 12,039 |  |  | $ | 36,568 |  |  | $ | 12,039 |
Deferred Consideration (Note 9) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | — |  |  | $ | 242,767 |  |  | $ | 200,290 |  |  | $ | 228,062 |
Net realized losses(2) |  |  | — |  |  |  | 4,105 |  |  |  | 6,069 |  |  |  | 13,001 |
Net unrealized gains(3) |  |  | — |  |  |  | (77,895 | ) |  |  | (61,953 | ) |  |  | (63,188 | )
Settlements |  |  | — |  |  |  | (4,220 | ) |  |  | (144,406 | ) |  |  | (13,118 | )
Ending balance |  | $ | — |  |  | $ | 164,757 |  |  | $ | — |  |  | $ | 164,757 |
_____________________________ (1) Recorded in impairments and other losses, net in the Consolidated Statements of Operations. (2) Recorded as contractual gold payments expense in the Consolidated Statements of Operations. (3) Recorded as gain on revaluation/termination of deferred consideration—gold payments in the Consolidated Statements of Operations.

X
- 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
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_FairValueMeasurementsNonrecurringValueMeasurementAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration