Net comprehensive income1 increased
345% to $1.7 billion versus
prior year
Partners' Capital increased 226% to
$2.6 billion versus prior
year
Assets Under Management ("AUM")2
increased 256% since Q4 2020
Galaxy remains committed to
listing in the U.S. and closing the BitGo acquisition
NEW YORK,
March 31, 2022 /CNW/ -
Galaxy Digital Holdings Ltd. (TSX: GLXY) ("Galaxy Digital" the
"Company" or "GDH Ltd.") today released financial results for the
year ended December 31, 2021 for both
itself and Galaxy Digital Holdings LP (the "Partnership" or "GDH
LP").
"2021 was a transformational year for both Galaxy Digital and
our industry. While providing shareholders a net comprehensive
income of $1.7 billion for the
full year 2021, we also grew headcount over 200% to support
continued growth across all our businesses," said Michael Novogratz, Founder and CEO of Galaxy
Digital.
"We remain committed to scaling our platform services, and
building the pre-eminent technology-driven financial services and
investment management firm, a strategy I firmly believe will
continue enhancing long-term shareholder value."
Select Financial Highlights for the Fiscal Year 2021 compared
to Fiscal Year 2020
- Net comprehensive income1 increased 345% to
$1.7 billion, from $385.5 million in the prior year.
-
- The increase was primarily a result of strong contributions
from our Trading and Principal Investment businesses driving
realized and unrealized gains on digital assets and on investments,
partially offset by higher operating expenses.
- Income from our trading business increased 302% to $985.3 million, from $245.0 million in the prior year.
- Partners' Capital increased 226% to $2.6 billion, from $798.2
million at the end of the prior year period.
-
- During the quarter, Partners' Capital increased 28% to
$2.6 billion, from $2.0 billion, due to gains on our core long
digital asset positions as well as gains in our investment
portfolio, which grew to $1.1 billion
from $779.9 million in the prior
quarter.
- As of December 31, 2021, the
Partnership had a material net holding in Bitcoin of approximately
$463.8 million (December 31, 2020 - $443.6
million), Ether of approximately $391.3 million (December
31, 2020: $65.8 million), and
Terra of approximately $407.6 million
(no holdings as of December 31,
2020), excluding non-controlling interests. The increase in
the value of holdings was primarily driven by the increase in
prices from the prior year end. As a reminder, we actively manage
our core digital asset holdings, including our material net
holdings, to participate in the upside from favorable asset price
changes, and mitigate the impacts of adverse movements.
- Investments stood at $1.1 billion
as of December 31, 2021, an increase
of $809.4 million from December 31, 2020. The change was primarily due
to the increase in unrealized gains and $340.5 million of new capital deployed by the
Principal Investments team during the year.
Corporate Updates
- BitGo Acquisition: Galaxy and BitGo intend to complete
the proposed transaction, and have renegotiated the acquisition
agreement from May 5, 2021 with the
following terms:
-
- The consideration to BitGo shareholders will consist of 44.8
million newly issued shares of Galaxy Digital common stock and
$265 million in cash, subject to
certain adjustments and deferred purchase considerations, implying
an aggregate transaction value of approximately $1,158 million based on Galaxy Digital's closing
price on March 30, 2022.
- BitGo shareholders will own approximately 12% of the pro forma
company.
- The acquisition is expected to close immediately following the
domestication of Galaxy Digital as a Delaware corporation, subject to approval by
the Company's shareholders as well as certain other
acquisition-related closing conditions and regulatory approvals.
The company anticipates the domestication will become effective
between Q2 and Q4 of 2022, subject to the ongoing SEC review
process.
- A reverse termination fee of $100
million will be payable by Galaxy Digital to BitGo in
certain circumstances if the transaction has not been completed by
December 31, 2022, subject to
specific provisions.
- U.S. Listing: As previously announced, the Company
intends to complete its proposed reorganization and domestication
to become a Delaware-based
company, and subsequently list on the Nasdaq, upon completion of
ongoing SEC review and subject to stock exchange approval of such
listing.
Quarter-to-date Company and Market Updates for First Quarter
2022, through Monday, March 28th,
2022
- Net comprehensive income1 is expected to be a loss
of $110 million to $130 million, quarter-to-date, bringing Partners'
Capital to approximately $2.45
billion. The Company's operating business lines are expected
to remain profitable.3
- Since the end of the fourth quarter 2021, total cryptocurrency
market capitalization has decreased approximately
4%.4
- Total value locked in decentralized finance (or "DeFi") for the
sector has decreased approximately 16% quarter-to-date to
$82 billion during the first quarter
2022.5
- Institutional adoption trends remained positive with over
$9 billion of private market deals
announced year-to-date in 2022 alone according to Pitchbook,
leading asset managers BlackRock, Fidelity, and others adding
crypto investment products directly and through partnerships, and
major traditional financial institutions such as JPMorgan Chase
& Co and HSBC announcing a presence within the metaverse.
- As a continuation of our partnership with Goldman Sachs, in
March 2022 we announced our trading
desk executed the first OTC cryptocurrency non-deliverable option
transaction.
- The Company continues to drive growth through ongoing product
launches across the platform, including the launch of the CI Galaxy
Multi-Crypto ETF in February 2022, in
a continuation of our partnership with CI.
- Also in February 2022, our
Investment Banking business ("GDIB") team worked on two fundraising
rounds, Qredo's $85 million Series A
financing, where we were the exclusive financial advisor and sole
placement agent, and Compute North's $80
million Series C financing, where we advised the Compute
North team on the equity financing.
- As a continuation of GDIB's relationship with Blockdaemon, a
leading blockchain infrastructure company for node management and
staking, our team acted as exclusive financial advisor on
Blockdaemon's announced acquisition of Gem in March 2022.
- GDIB also served as financial advisor and capital markets
advisor to the Thunder Bridge IV, a special purpose acquisition
vehicle company, on its merger agreement with Coincheck, a
multi-cryptocurrency marketplace and digital asset exchange.
Select Financial Highlights for the Fourth Quarter
2021
- Net comprehensive income1 increased 55% to
$521.3 million, from net
comprehensive income of $335.6
million in the prior year period.
-
- The increase was primarily a result of strong contributions
from our Trading and Principal Investment businesses driving
realized and unrealized gains on digital assets and on investments,
partially offset by higher operating expenses.
- Income from our trading business increased 33% to $390.4, from $294.4
million in the prior year period, primarily due to realized
and unrealized gains on digital assets.
Operating Highlights for the Fourth Quarter 2021
- Galaxy Digital Trading ("GDT") results reflected a
strong quarter, with continued growth in client count, and revenue
from counterparty trading and our loan and yield portfolio.
-
- For the year ended December 31,
2021, cumulative client-facing trading and lending, which
consists of electronic and derivatives liquidity provisioning, our
quantitative execution strategies, and our counterparty lending,
accounted for an approximately 10% contribution to total GDT net
revenues (consisting of net realized gains, net unrealized gains,
and net interest income).
- In the quarter ended December 31,
2021, GDT counterparty volumes were up 60%+ sequentially
quarter over quarter.
- In the quarter ended December 31,
2021, GDT's counterparty loan and yield portfolio grew 15%+
sequentially quarter over quarter and 550%+ year over year to
approximately $735 million, and the
Company grew cumulative gross counterparty loan originations year
over year to approximately $5
billion.
- GDT onboarded 61 new counterparties to our trading platform,
bringing our total trading counterparties to over 750, and
continues to provide liquidity in over 100 cryptocurrencies.
- Galaxy Digital Asset Management ("GDAM") reported
preliminary AUM of $2.9 billion as of
December 31, 2021, a 29% increase
from the quarter ended September 30,
2021, and a 256% increase year-to-date. AUM consisted of
$2.2 billion in GDAM's Galaxy Fund
Management products, and $658 million
in the Galaxy Interactive venture franchise6.
-
- In October 2021, Galaxy
Interactive, already the largest franchise dedicated to the
interactive sector, finalized an incremental raise of $325 million of committed capital for its second
fund, with participation from over 70 new LPs, including
institutional investors, endowments, strategic investors, and
family offices.
- New product launches within the quarter included the Galaxy
Solana Funds, passively managed funds that seek to track the
performance of the newly-launched Bloomberg Galaxy Solana Index
(Ticker: SOL); the launch of two passively managed ETFs focused on
digital assets and blockchain (Tickers: SATO and BLKC) through a
partnership with Invesco; and the launch of the GVH Market Neutral
Fund of Funds, the third fund in the suite of Galaxy Vision Hill
("GVH") products.
- Galaxy Digital Investment Banking ("GDIB") served as
advisor on five fundraising and M&A transactions during the
quarter, and is actively executing on several active mandates for
leading companies in the blockchain and cryptocurrency ecosystem.
For the full year 2021, GDIB completed eight deals. Within the
fourth quarter 2021, GDIB completed the following
transactions:
-
- Served as digital assets advisor for Iris Energy, a leading
Bitcoin mining company, for its November
2021 Nasdaq IPO.
- Acted as the exclusive advisor and sole placement agent on a
$50 million capital raise for
CoreWeave, a specialized cloud provider for both proprietary and
client use cases across the digital asset, machine learning, and
VFX rendering spaces in October
2021.
- Served as sell-side advisor to BRD, a leading crypto wallet
that had nearly 10 million global customers at the time of
acquisition, on its announced sale to Coinbase in November 2021.
- Served as exclusive Financial Advisor to Blockdaemon, a leading
blockchain infrastructure company for node management and staking
on its acquisition of Anyblock Analytics, which closed in
November 2021.
- Served as a placement agent on a bridge financing convertible
debt transaction for a payments infrastructure provider in
December 2021.
- Galaxy Digital Mining ("GDM") continued to expand both
its proprietary bitcoin mining operation and mining finance
("MiFi") offerings to support the full breadth of the bitcoin
mining ecosystem, while maintaining an over 80% sustainable energy
mix for all mining operations.
-
- Proprietary mining operations continued to mine bitcoin at a
marginal cost that is 80%+ lower than fair market value.
- GDM increased forward purchase commitments withing the quarter
and now expects to achieve over 2,500 Petahash per second (PH/s) of
mining capacity for both proprietary and miner-finance operations,
from monthly deliveries by the end of 2022.
- As a continuation of GDM's public dedication to managing its
carbon footprint and increasing the use of clean energy, as of
December 31, 2021, over 80% of GDM's
energy use continues to come from sustainable sources.
- Principal Investments ("GDPI"): The Company now holds
122 investments across 86 portfolio companies as of December 31, 2021. Within the fourth quarter
2021, GDPI made investments in a number of companies including
Chaos Labs, Sealance, and Skolem.
Additional Corporate Updates
- Hiring: The Company has hired a number of senior
executives for key leadership roles including:
-
- Sebastian Benkert, Chief
Marketing Officer. Mr. Benkert has significant marketing and
communications experience, and joined the Company from ARK Invest
where he most recently served as Chief Marketing Officer.
- Felix Cua, Chief Risk
Officer. Mr. Cua joined the Company from Capstone Investment
Advisors where he served as Chief Risk Officer, overseeing market
risk strategies and previously served as the Head of Risk for
Citadel Investment Group's Global Fixed Income business for seven
years.
- Alex Field, VP
Engineering. Mr. Field joined the Company from Goldman Sachs
where he spent 15 years developing financial markets software, with
significant experience developing financial market software,
managing large global engineering teams and in portfolio
optimization and alternative data research.
- Tom Harrop, Head of
Treasury. Mr. Harrop joined the Company from Credit Suisse
where he served as Americas Treasurer and Co-Head of the Global
Liquidity Group. Prior to Credit Suisse, he held a number of
treasury and liquidity roles as a Managing Director at Goldman
Sachs.
- Chris Rhine, Portfolio
Manager, Long-Only Active Strategies. Mr. Rhine joined the
Company from Cohen & Steers where he served as a Senior Vice
President and Head of Strategic Equities, Head of Global Natural
Resources, and Portfolio Manager for Global Listed
Infrastructure.
- Eddie Schwartz, Chief
Security Officer. Mr. Schwartz joined the Company from
Block.one where he served as CSO and led numerous security, IT, and
cloud infrastructure programs within the blockchain and crypto
space.
- Andrew Taubman, Head of
Operations Technology. Mr. Taubman joined the Company from
Bridgewater Associates where he served as Head of Middle/Back
Office Transformation, Change Management, and Strategic
Relationship Management. Prior to Bridgewater Associates, he held
senior operations and technology roles at BNY Mellon and Fidelity
Investments.
- Board of Directors: in March
2022, the Company appointed Jane
Dietze to its Board of Directors. Ms. Dietze is the Chief
Investment Officer and Vice President of Brown
University.
- Sustainability Program: the Company publicly launched a
Sustainability Program and Strategy in February 2022, underscoring the Company's
commitment to responsible environmental practices, a robust
corporate governance strategy and an equitable, inclusive
environment for employees. The Program is overseen by the Company's
Board of Directors, supported by an ESG Steering Committee
comprised of senior executives across the Company's business lines
and corporate functions.
________________________________
|
1 Excluding non-controlling interests
("NCI"). Non-controlling interests have been reclassified within
Galaxy Digital Holdings LP's financial statements. Please refer to
the disclosure on page 4 of this Press Release entitled "Changes in
Financial Statements Presentation" for important information
regarding the reclassification of non-controlling
interests.
2 AUM is an internal estimate inclusive of a
sub-advised fund, committed capital in a closed-end vehicle, and
seed investments by affiliates. Changes in AUM are generally the
result of performance, contributions, and withdrawals.
|
3
Note: This preliminary, unaudited quarter-to-date financial data is
as of March 28, 2022 and excludes impacts from the quarterly
valuation process of our investment portfolio. This data is
subject to change as management completes its quarterly close
procedures; excluding non-controlling interests.
4 Represents coinmarketcap.com total
cryptocurrency market capitalization quoted price.
5 Represents total value locked in DeFi according
to defipulse.com.
6 Represents $650 million committed capital in
Galaxy Interactive funds, and $8 million in an investment
SPV.
|
Important U.S. Tax Information – Action Required by U.S.
Shareholders
Galaxy Digital shareholders who are U.S. taxpayers should be
aware that there may be significant and adverse U.S. federal income
tax consequences relating to Galaxy Digital's PFIC status for 2021
and prior years and in connection with Galaxy Digital's
domestication from Cayman to Delaware unless they make certain elections on
their originally filed U.S. federal income tax returns for 2021,
which are generally due on April 18,
2022 (subject to allowable extensions). These consequences
and, therefore, the need to take action apply to both direct and
indirect holdings of Galaxy Digital shares. These elections are
described in the notice posted by Galaxy Digital in March 2022 on its website at
https://investor.galaxydigital.io/financials/annual-reports/default.aspx.
Before filing their U.S. federal income tax returns for 2021,
direct and indirect Galaxy Digital shareholders who are, or who
have investors who are, U.S. taxpayers are urged to review the
notice and to consult their tax advisors regarding the advisability
of making these elections on their U.S. federal income tax returns
for 2021.
Change in Financial Statements Presentation
Please note that Non-controlling interests were reclassified
from "Equity" to "Liabilities" within Galaxy Digital Holdings LP's
Consolidated statements of financial position. Similarly,
Gains and losses attributed to the non-controlling interests were
reclassified from "Net Income attribution" to "Expenses" within
Galaxy Digital Holdings LP's Consolidated statements of
comprehensive income. Because Non-controlling interests
comprise assets from third-party investors in funds that we
consolidate (based on an accounting control determination), the
corresponding gains and losses attributed to these non-controlling
interests are not attributable to the Partnership. As such,
we historically excluded these amounts from the select financial
data presented in the MD&A since these gains and losses were
not part of our results of operations. Following the
reclassification, we will continue to exclude these amounts from
the select financial data presented in the MD&A as their nature
did not change, and these gains and losses continue to not be a
part of our operational results. As background, IFRS requires
limited partner capital to be recognized as a liability if the
Partnership does not have the unconditional right to suspend
distributions indefinitely. Although the Partnership has the
unilateral right to suspend distributions and the computation of
the Net Asset Value for these funds, it does not have an
unconditional right. For additional information regarding these
changes in presentation, please refer to the "Change in Financial
Statements Presentation" section within "Annual Highlights &
Results" of the Partnership's MD&A.
Earnings Conference Call
An investor conference call will be held today, March 31, 2022 at 8:30 AM
Eastern Time. A live webcast will be available at
https://investor.galaxydigital.io/. The conference call can also be
accessed by investors in the United
States or Canada by dialing
1-877-407-0789, or 1-201-689-8562 (outside the U.S. and
Canada). A replay of the webcast
will be available and can be accessed in the same manner as the
live webcast on the Company's Investor Relations website. Through
April 21, 2022, the recording will
also be available by dialing +1-844-512-2921, or 1-412-317-6671
(outside the U.S. and Canada)
passcode: 13727641.
About Galaxy Digital Holdings Ltd. (TSX: GLXY) ("GDH
Ltd.") and Galaxy Digital Holdings LP ("GDH
LP")
GDH Ltd.'s only significant asset is a minority investment in
GDH LP. GDH LP is a diversified, financial services and investment
management company in the digital asset, cryptocurrency and
blockchain technology sector. GDH LP's multi-disciplinary team has
extensive experience spanning investing, portfolio management,
capital markets, operations, and blockchain technology. Galaxy
Digital operates in the following businesses: Trading, Asset
Management, Investment Banking, Mining and Principal Investments.
Galaxy Digital's CEO and Founder is Mike
Novogratz. The Company is headquartered in New York City, with offices in Chicago, London, Amsterdam, Tokyo, Hong
Kong, the Cayman Islands
(registered office), and New
Jersey.
Additional information about GDH LP's businesses and products is
available on www.galaxydigital.io.
This press release should be read in conjunction with (i) GDH
LP's Management Discussion and Analysis and Consolidated Financial
Statements for year ended December 31,
2021 and (ii) GDH Ltd.'s Management Discussion and Analysis
and Consolidated Financial Statements for the year ended
December 31, 2021 (together, the
"Consolidated Financial Statements" and "MD&As"), which have
been filed on SEDAR at www.sedar.com.
Disclaimers and Additional Information
The TSX has not approved or disapproved of the information
contained herein. The Ontario Securities Commission has not passed
upon the merits of the disclosure record of Galaxy Digital.
The performance of the Funds will vary from the performance of
their respective indices.
BLOOMBERG is a trademark or service mark of Bloomberg Finance
L.P. GALAXY is a trademark of Galaxy Digital Capital Management LP
(GDCM). Bloomberg Finance L.P. and its affiliates (collectively,
Bloomberg) are not affiliated with GDCM, the Galaxy Funds and their
respective affiliates (collectively, Galaxy). Bloomberg's
association with Galaxy is to act as the administrator and
calculation agent of the Indices (collectively, the "Index"), which
is the property of Bloomberg. Neither Bloomberg nor Galaxy
guarantee the timeliness, accurateness, or completeness of any data
or information relating to the Index or results to be obtained.
Neither Bloomberg nor Galaxy make any warranty, express or implied,
as to the Index, any data or values relating thereto or any
financial product or instrument linked to, using as a component
thereof or based on the Index (Products) or results to be obtained
therefrom, and expressly disclaims all warranties of
merchantability and fitness for a particular purpose with respect
thereto. To the maximum extent allowed by law, Bloomberg, its
licensees, Galaxy, and their respective employees, contractors,
agents, suppliers, and vendors shall have no liability or
responsibility whatsoever for any injury or damages—whether direct,
indirect, consequential, incidental, punitive, or otherwise—arising
in connection with the Index, any data or values relating thereto
or any Products—whether arising from their negligence or
otherwise.
This press release contains certain pre-released first quarter
2022 financial information (the "pre-released financial
information"). The pre-released financial information contained in
this press release is preliminary and represents the most current
information available to the Company's management. The Company's
actual consolidated financial statements for such period may result
in material changes to the pre-released financial information
summarized in this press release (including by any one financial
metric, or all of the financial metrics) as a result of the
completion of normal quarter and year end accounting procedures
and adjustments and annual independent audit. Although the Company
believes the expectations reflected in this press release are
based upon reasonable assumptions, the Company can give no
assurance that actual results will not differ materially from these
expectations.
No Offer or Solicitation
In connection with the proposed reorganization and combination
with BitGo, the Company has filed a registration statement,
including a management information circular/prospectus and a
consent solicitation statement/prospectus, with the SEC, which has
not yet become effective. GALAXY AND BITGO SHAREHOLDERS ARE ADVISED
TO READ THE FINAL VERSIONS OF SUCH DOCUMENTS, WHEN AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may
obtain a free copy of the registration statement (including the
management information circular/prospectus and the consent
solicitation statement/prospectus) and any other relevant documents
from the SEC's website at http://www.sec.gov. Copies of the final
versions of such documents can also be obtained, when available,
without charge, via Galaxy Digital's investor relations website:
https://investor.galaxydigital.io.
The proposed reorganization and domestication is subject to
approval by shareholders of the Company and applicable regulatory
authorities, including the Toronto Stock Exchange. The Company
anticipates holding a shareholder meeting to seek approval
following the effectiveness of the registration statement, and
further details will be included in the management information
circular to be mailed to shareholders and posted on the Company's
SEDAR profile at www.sedar.com.
This release shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in
respect of any of the proposed transactions. This release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote of approval, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
The
information in this release may contain "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended (the "Securities Act"), Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and "forward-looking information" under Canadian securities laws
(collectively, "forward-looking statements"). Our forward-looking
statements include, but are not limited to, statements regarding
our or our management team's expectations, hopes, beliefs,
intentions or strategies regarding the future, including with
respect to mining capacity. Statements that are not historical
facts, including statements about the pending acquisition,
domestication and the related transactions (the "transactions"),
and the parties, perspectives and expectations, are forward-looking
statements. In addition, any statements that refer to estimates,
projections, forecasts or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking statements. The words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "forecast," "intend,"
"may," "might," "plan," "possible," "potential," "predict,"
"project," "should," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking
statements in this release may include, for example, statements
about: our ability to complete the transactions within a particular
timeframe. The forward-looking statements contained in this report
are based on our current expectations and beliefs concerning future
developments and their potential effects on us taking into account
information currently available to us. There can be no assurance
that future developments affecting us will be those that we have
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond our control) or
other assumptions that may cause actual results or performance to
be materially different from those expressed or implied by these
forward-looking statements. These risks include, but are not
limited to: (1) the inability to complete the proposed
reorganization transactions or combination with BitGo, due to the
failure to obtain shareholder and stock exchange approvals, the
failure to satisfy any other conditions to closing, or otherwise;
(2) changes to the proposed structure of the transactions that may
be required or appropriate as a result of applicable laws or
regulations or as a condition to obtaining shareholder or stock
exchange approval of the transactions or satisfying any other
conditions to closing; (3) the outcome of any legal proceedings
that may be instituted following the transactions and any
definitive agreements with respect thereto; (4) the ability to meet
and maintain listing standards following the consummation of the
transactions; (5) the risk that the transactions disrupt current
plans and operations; (6) costs related to the transactions; (7)
changes in applicable laws or regulations; (8) the possibility that
the Company may be adversely affected by other economic, business,
and/or competitive factors; (9) changes or events that impact the
cryptocurrency industry, including potential regulation, that are
out of our control; (10) the risk that our business will not grow
in line with our expectations or continue on its current
trajectory; (11) the possibility that our addressable market is
smaller than we have anticipated and/or that we may not gain share
of it; (12) those other risks contained in the Annual Information
Form for the year ended December 31,
2021 available on the Company's profile at www.sedar.com and
(13) other risks and uncertainties to be indicated from time to
time in filings made with the SEC. Should one or more of these
risks or uncertainties materialize, they could cause our actual
results to differ materially from the forward-looking statements.
We are not undertaking any obligation to update or revise any
forward looking statements whether as a result of new information,
future events or otherwise. You should not take any statement
regarding past trends or activities as a representation that the
trends or activities will continue in the future. Accordingly, you
should not put undue reliance on these statements.
Galaxy Digital Holdings LP's Consolidated Statements of
Financial Condition (unaudited)
(in
thousands)
|
December 31,
2021
|
December 31,
2020
|
Assets
|
|
|
Current
assets
|
|
|
Cash
|
$
811,129
|
137,951
|
Digital
assets
|
2,420,777
|
931,480
|
Receivable for digital
asset trades
|
8,332
|
13,204
|
Digital asset loans
receivable
|
192,684
|
96,724
|
Digital assets
receivables
|
52,998
|
12,813
|
Assets posted as
collateral
|
71,400
|
15,768
|
Receivables
|
26,665
|
2,710
|
Due from
broker
|
29,647
|
4,452
|
Derivative
assets
|
45,669
|
39,025
|
Prepaid expenses and
other assets
|
66,793
|
6,494
|
Loans
receivable
|
190,087
|
8,510
|
Due from related
party
|
25,023
|
—
|
Total current
assets
|
3,941,204
|
1,269,131
|
|
|
|
Digital assets
receivables
|
18,659
|
6,911
|
Investments
|
1,069,776
|
260,383
|
Right of use
asset
|
11,746
|
4,573
|
Property and
equipment
|
17,162
|
3,693
|
Deferred tax
asset
|
10,259
|
—
|
Intangible
assets
|
3,087
|
2,406
|
Goodwill
|
24,645
|
15,515
|
Total non-current
assets
|
1,155,334
|
293,481
|
Total
assets
|
$
5,096,538
|
$
1,562,612
|
|
|
|
Liabilities and
Equity
|
|
|
Current
liabilities
|
|
|
Digital assets sold
short
|
$
—
|
$
5,278
|
Investments sold
short
|
11,630
|
4,384
|
Derivative
liabilities
|
25,567
|
23,103
|
Warrant
liability
|
20,488
|
20,781
|
Accounts payable and
accrued liabilities
|
146,243
|
34,154
|
Payables to
customers
|
142,441
|
—
|
Taxes
payable
|
42,341
|
—
|
Payable for digital
asset trades
|
13,216
|
33,329
|
Digital asset loans
payable
|
905,013
|
307,499
|
Loans
payable
|
33,289
|
—
|
Collateral
payable
|
480,088
|
44,660
|
Lease
liability
|
2,164
|
742
|
Non-controlling
interests liability
|
161,536
|
285,956
|
Total current
liabilities
|
1,984,016
|
759,886
|
|
|
|
Notes
payable
|
475,330
|
—
|
Deferred tax
liability
|
25,608
|
—
|
Lease
liability
|
13,233
|
4,515
|
Total non-current
liabilities
|
514,171
|
4,515
|
Total
liabilities
|
2,498,187
|
764,401
|
|
|
|
Equity
|
|
|
Partners'
capital
|
2,598,351
|
798,211
|
Total
equity
|
2,598,351
|
798,211
|
|
|
|
Total liabilities
and equity
|
$
5,096,538
|
$
1,562,612
|
Galaxy Digital Holdings LP's Consolidated Statements of
Comprehensive Income (unaudited)
(in
thousands)
|
Three months
ended
December 31, 2021
|
Three months
ended
December 31, 2020
|
Year ended
December 31, 2021
|
Year ended
December 31, 2020
|
Income
|
|
|
|
|
Advisory and management
fees
|
$
7,855
|
$
5,013
|
$
15,736
|
$
9,615
|
Net realized gain
(loss) on digital assets
|
315,628
|
250,270
|
1,014,260
|
271,108
|
Net realized gain
(loss) on investments
|
6,330
|
(605)
|
231,388
|
10,796
|
Interest
income
|
33,656
|
1,720
|
73,051
|
6,132
|
Net derivative gain
(loss)
|
(94,595)
|
(251)
|
10,761
|
5,699
|
Net income from digital
asset mining
|
6,996
|
—
|
10,922
|
—
|
Leasing income from
mining equipment
|
1,387
|
—
|
3,781
|
—
|
Other income
|
519
|
679
|
5,682
|
810
|
|
277,776
|
256,826
|
1,365,581
|
304,160
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Compensation and
compensation related
|
(22,353)
|
14,794
|
114,426
|
34,164
|
Equity based
compensation
|
26,052
|
3,600
|
70,891
|
11,851
|
General and
administrative
|
(9,475)
|
6,060
|
35,214
|
15,127
|
Professional
fees
|
16,182
|
2,684
|
53,329
|
7,664
|
Profit share
arrangement expense
|
2,534
|
—
|
16,568
|
—
|
Interest
|
18,510
|
5,590
|
70,155
|
9,729
|
Notes interest
expense
|
1,769
|
—
|
1,769
|
—
|
Insurance
|
434
|
235
|
1,517
|
1,090
|
Director
fees
|
198
|
119
|
699
|
249
|
|
33,851
|
(33,082)
|
(364,568)
|
(79,874)
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
228,925
|
212,842
|
451,465
|
239,720
|
Net unrealized gain
(loss) on investments
|
145,768
|
61,911
|
546,997
|
90,587
|
Net gain (loss) on
notes payable - derivative
|
12,132
|
—
|
12,132
|
—
|
Net unrealized gain
(loss) on warrant liability
|
(20,842)
|
(14,318)
|
(45,644)
|
(14,318)
|
Foreign currency gain
(loss)
|
948
|
(600)
|
2,590
|
(1,388)
|
(Gain) loss
attributable to non-controlling interests liability
|
(32,646)
|
(147,857)
|
(197,376)
|
(153,385)
|
|
334,285
|
111,978
|
770,164
|
161,216
|
|
|
|
|
|
Income before income
taxes
|
578,210
|
335,722
|
1,771,177
|
385,502
|
Income taxes
|
56,900
|
—
|
56,900
|
—
|
Net income for the
period
|
$
521,310
|
$
475,200
|
$
1,714,277
|
$
385,502
|
Other comprehensive
income
|
|
|
|
|
Foreign currency
translation adjustment
|
$
26
|
$
(78)
|
$
367
|
$
17
|
|
|
|
|
|
Net comprehensive
income for the period
|
$
521,336
|
$
335,644
|
$
1,714,644
|
$
385,519
|
Reportable segments (unaudited)
Income and expenses by each reportable segment of GDH LP for the
three months ended December 31, 2021
are as follows:
|
Trading
|
Principal
Investments
|
Asset
Management
|
Investment
Banking
|
Mining
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
|
|
Advisory and management
fees
|
$
1
|
$
—
|
$
3,762
|
$
4,092
|
$
—
|
$
—
|
$
7,855
|
Net realized gain
(loss) on digital assets
|
305,021
|
3,223
|
7,384
|
—
|
—
|
—
|
315,628
|
Net realized gain
(loss) on investments
|
—
|
6,391
|
(61)
|
—
|
—
|
—
|
6,330
|
Interest
Income
|
33,279
|
377
|
—
|
—
|
—
|
—
|
33,656
|
Net derivative gain
(loss)
|
(94,595)
|
—
|
—
|
—
|
—
|
—
|
(94,595)
|
Net income from digital
asset mining
|
—
|
—
|
—
|
—
|
6,996
|
—
|
6,996
|
Leasing income from
mining equipment
|
—
|
—
|
—
|
—
|
1,387
|
—
|
1,387
|
Other Income
|
443
|
—
|
3
|
58
|
15
|
—
|
519
|
|
244,149
|
9,991
|
11,088
|
4,150
|
8,398
|
—
|
277,776
|
|
|
|
|
|
|
|
|
Operating
expenses
|
14,143
|
677
|
9,676
|
611
|
3,458
|
5,286
|
33,851
|
|
|
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
157,441
|
45,578
|
26,578
|
—
|
(672)
|
—
|
228,925
|
Net unrealized gain
(loss) on investments
|
2,050
|
129,919
|
13,799
|
—
|
—
|
—
|
145,768
|
Net unrealized gain
(loss) on notes payable - derivative
|
—
|
—
|
—
|
—
|
—
|
12,132
|
12,132
|
Net unrealized gain
(loss) on warrants
|
—
|
—
|
—
|
—
|
—
|
(20,842)
|
(20,842)
|
Foreign currency gain
(loss)
|
950
|
—
|
—
|
—
|
—
|
(2)
|
948
|
(Gain) loss
attributable to non-controlling interests
|
—
|
—
|
(32,646)
|
—
|
—
|
—
|
(32,646)
|
|
160,441
|
175,497
|
7,731
|
—
|
(672)
|
(8,712)
|
334,285
|
|
|
|
|
|
|
|
|
Income (loss) for
the period before taxes
|
$
390,447
|
$
184,811
|
$
9,143
|
$
3,539
|
$
4,268
|
$
(13,998)
|
$
578,210
|
Income tax
expense
|
—
|
—
|
—
|
—
|
—
|
(56,900)
|
(56,900)
|
Net income (loss)
for the period
|
$
390,447
|
$
184,811
|
$
9,143
|
$
3,539
|
$
4,268
|
$
(70,898)
|
$
521,310
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
—
|
—
|
26
|
26
|
Net comprehensive
income (loss) for the period
|
$
390,447
|
$
184,811
|
$
9,143
|
$
3,539
|
$
4,268
|
$
(70,872)
|
$
521,336
|
Income and expenses by each reportable segment of GDH LP for the
three months ended December 31, 2020
are as follows:
|
Trading
|
Principal
Investments
|
Asset
Management
|
Investment
Banking
|
Mining
|
Corporate
and
Other
|
Totals
|
Income
(loss)
|
|
|
|
|
|
|
|
Advisory and management
fees
|
$
26
|
$
—
|
$
1,519
|
$
3,468
|
$
—
|
$
—
|
$
5,013
|
Net realized gain
(loss) on digital assets
|
236,158
|
2,494
|
11,618
|
—
|
—
|
—
|
250,270
|
Net realized gain
(loss) on investments
|
—
|
(605)
|
—
|
—
|
—
|
—
|
(605)
|
Interest
Income
|
2,068
|
(380)
|
—
|
32
|
—
|
—
|
1,720
|
Net derivative gain
(loss)
|
(251)
|
—
|
—
|
—
|
—
|
—
|
(251)
|
Other Income
|
733
|
22
|
(45)
|
(31)
|
—
|
—
|
679
|
|
238,734
|
1,531
|
13,092
|
3,469
|
—
|
—
|
256,826
|
|
|
|
|
|
|
|
|
Operating
expenses
|
14,033
|
270
|
5,918
|
1,124
|
492
|
11,245
|
33,082
|
|
|
|
|
|
|
|
|
Net unrealized gain
(loss) on digital assets
|
70,315
|
8,280
|
134,247
|
—
|
|
—
|
212,842
|
Net unrealized gain
(loss) on investments
|
—
|
61,911
|
—
|
—
|
|
—
|
61,911
|
Net unrealized gain
(loss) on warrants
|
—
|
—
|
—
|
—
|
—
|
(14,318)
|
(14,318)
|
Foreign currency gain
(loss)
|
(600)
|
—
|
—
|
—
|
|
—
|
(600)
|
(Gain) loss
attributable to non-controlling interests
|
—
|
—
|
(147,857)
|
—
|
—
|
—
|
(147,857)
|
|
69,715
|
70,191
|
(13,610)
|
—
|
|
(14,318)
|
111,978
|
|
|
|
|
|
|
|
|
Net income (loss)
for the period
|
$
294,416
|
$
71,452
|
$
(6,436)
|
$
2,345
|
|
$
(25,563)
|
$
335,722
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
—
|
—
|
(78)
|
(78)
|
Net comprehensive
income (loss) for the period
|
$
294,416
|
$
71,452
|
$
(6,436)
|
$
2,345
|
$
—
|
$
(25,641)
|
$
335,644
|
Assets and liabilities by reportable segment of GDH LP as of
December 31, 2021 are as follows:
(in
thousands)
|
Trading
|
Principal
Investments
|
Asset
Management
|
Investment
Banking
|
Mining
|
Corporate and
Other
|
Totals
|
Total
assets
|
$
2,971,090
|
$
1,277,707
|
$
193,436
|
$
10,727
|
$
292,942
|
$
350,636
|
$
5,096,538
|
|
|
|
|
|
|
|
|
Total
liabilities
|
$
1,666,488
|
$
174
|
$
171,784
|
$
122
|
$
3,202
|
$
656,417
|
$
2,498,187
|
Assets and liabilities by reportable segment of GDH LP as of
December 31, 2020 are as follows:
(in
thousands)
|
Trading
|
Principal
Investments
|
Asset
Management
|
Investment
Banking
|
Corporate and
Other
|
Totals
|
Total
assets
|
$
896,730
|
$
319,980
|
$
306,065
|
$
6,190
|
$
30,014
|
$
1,562,612
|
|
|
|
|
|
|
|
Total
liabilities
|
$
439,709
|
$
101
|
$
304,126
|
$
22
|
$
20,443
|
$
764,401
|
Select statement of financial position information
The fair value of each asset class by reporting segment of GDH
LP as of December 31, 2021 is as
follows:
(in
thousands)
|
Trading
|
Principal
Investments
|
Asset
Management
|
Investment
Banking
|
Mining
|
Corporate and
Other
|
Totals
|
Digital
assets
|
$
2,121,772
|
$
123,210
|
$
165,300
|
$
—
|
$
10,495
|
$
—
|
$
2,420,777
|
Digital assets
receivable
|
—
|
71,657
|
—
|
—
|
—
|
—
|
71,657
|
Digital assets posted
as collateral
|
71,400
|
—
|
—
|
—
|
—
|
—
|
71,400
|
Investments:
|
|
|
|
|
|
|
|
Pre-Launch
Network
|
—
|
6,393
|
—
|
—
|
—
|
—
|
6,393
|
Convertible
Notes
|
—
|
9,768
|
—
|
—
|
—
|
—
|
9,768
|
Preferred
Stock
|
—
|
382,182
|
—
|
—
|
—
|
—
|
382,182
|
Common Stock
|
34,991
|
236,303
|
—
|
—
|
—
|
—
|
271,294
|
LP/LLC
Interests
|
—
|
383,279
|
—
|
—
|
—
|
—
|
383,279
|
Warrants/Trust
Units/Trust Shares
|
7,963
|
8,897
|
—
|
—
|
—
|
—
|
16,860
|
|
$
2,236,126
|
$
1,221,689
|
$
165,300
|
$
—
|
$
10,495
|
$
—
|
$
3,633,610
|
The fair value of each asset class by reporting segment of GDH
LP as of December 31, 2020 is as
follows:
(in
thousands)
|
Trading
|
Principal
Investments
|
Asset
Management
|
Investment
Banking
|
Corporate and
Other
|
Totals
|
Digital
assets
|
$
544,796
|
$
100,730
|
$
285,954
|
$
—
|
$
—
|
$
931,480
|
Digital assets posted
as collateral
|
15,625
|
—
|
—
|
—
|
—
|
15,625
|
Investments:
|
|
|
|
|
|
|
Pre-Launch
Network
|
—
|
500
|
—
|
—
|
—
|
500
|
Convertible
Notes
|
—
|
4,501
|
—
|
—
|
—
|
4,501
|
Preferred
Stock
|
—
|
86,258
|
—
|
—
|
—
|
86,258
|
Common Stock
|
—
|
29,970
|
—
|
—
|
—
|
29,970
|
LP/LLC
Interests
|
—
|
84,311
|
—
|
—
|
—
|
84,311
|
Warrants/Trust
Units
|
30,654
|
24,189
|
—
|
—
|
—
|
54,843
|
|
$
600,407
|
$
340,851
|
$
285,954
|
$
—
|
$
—
|
$
1,227,212
|
All figures are in U.S. Dollars unless
otherwise noted.
SOURCE Galaxy Digital Holdings Ltd.