Galaxy Digital Inc. 10-Q

glxy-20250331 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q _________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from January 1, 2025 to March 31, 2025 Commission file number 333-262378 _________________________ Galaxy Digital Inc. (Exact name of registrant as specified in its charter) _________________________ Delaware 87-0836313 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 300 Vesey Street New York , NY 10282 (Address of Principal Executive Offices) (Zip Code) ( 212 ) 390-9216 Registrant’s telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company o Emerging growth company o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ☒ As of May 9, 2025, the number of shares of the registrant's Class A common stock outstanding was 130,902,852 and the number of shares of the registrant's Class B common stock outstanding was 215,862,343 . 1 Table of Contents EXPLANATORY NOTE On May 13, 2025, subsequent to the fiscal quarter ended March 31, 2025 to which this Quarterly Report on Form 10-Q relates, Galaxy Digital Holdings Ltd. (“GDHL”), Galaxy Digital Holdings LP (“GDH LP”) and Galaxy Digital Inc. (“GDI”) entered into a series of transactions to implement an internal reorganization, which we collectively refer to as the “Reorganization Transactions.” Following the consummation of the Reorganization Transactions, GDI succeeded GDHL as the publicly traded company in which existing holders of GDHL ordinary shares own their equity interests and GDH LP became the predecessor of GDI for financial reporting purposes in what is commonly referred to as an umbrella partnership corporation structure. Except as otherwise expressly provided herein, the information in this Quarterly Report on Form 10-Q does not reflect the consummation of the Reorganization Transactions, which, as mentioned above, occurred subsequent to the period covered herein. References to “Galaxy,” “we,” “us,” or “our” refer to the Company, Galaxy Digital Holdings LP (“GDH LP”), the Corporation, Galaxy Digital Inc. (“GDI”), and their subsidiaries and affiliates, or any one of them, as the context suggests. 2 Table of Contents TABLE OF CONTENTS Part I - Financial Information Page Item 1. Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 56 Item 3. Quantitative and Qualitative Disclosures About Market Risk 71 Item 4. Controls and Procedures 73 Part II - Other Information Item 1. Legal Proceedings 75 Item 1A. Risk Factors 75 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 162 Item 3. Defaults Upon Senior Securities 162 Item 4. Mine Safety Disclosures 162 Item 5. Other Information 162 Item 6. Exhibits 163 Signatures 164 3 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: • our future financial performance, including our expectations regarding and our ability to achieve and maintain future profitability; • our limited operating history, lack of experience implementing our business plan and our ability to effectively manage our growth; • anticipated trends, growth rates and challenges in our business and the industries and markets in which we operate; • the highly volatile nature of cryptocurrencies; • our ability to execute on our strategy to expand into the Artificial Intelligence and High Performance Computing (“AI/HPC”) data center business; • our ability to obtain financing on acceptable terms or at all, including for the conversion of our existing bitcoin mining infrastructure to AI/HPC data center infrastructure; • our failure to adhere to complex and evolving governmental laws and regulations; • the continuing development and market acceptance of digital assets and distributed ledger technology; • the new and rapidly evolving Artificial Intelligence (“AI”) industry, and related legislation and regulations; • a determination that a digital asset that we interact with is a “security,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws; • the price of digital assets globally and the volume of transactions; • our dependence upon Michael Novogratz, our Chief Executive Officer (“CEO”) and founder (our “Founder”) and the fact that we are controlled by our Founder; • our ability to develop, maintain and enhance our brand and reputation; • increased expenses associated with being subject to the Securities Exchange Act of 1934, and as amended (the “Exchange Act”) and other U.S. regulations, and with being a listed company on the Nasdaq Global Select Market (“Nasdaq”); • our failure to maintain and grow our customer base; • our failure to continue to innovate and provide services that are useful to customers and achieve and maintain market acceptance; • our and our third-party service providers’ ability to safeguard and manage our and our customers’ funds and digital assets; • our reliance on technology provided by third parties which are out of our direct control; • the impact of acquisitions of or investments in complementary companies, products, services or technologies and our ability to successfully integrate such companies or assets; • the effects of increased competition in our markets and our failure to compete effectively; 4 Table of Contents • our revenue not growing at the rates it historically has, or at all; • our failure to successfully execute on our growth initiatives, business strategies, or operating plans; • additional risks of short sales, borrowings and lending of digital assets; • the presentation of our financial statements in accordance with U.S. GAAP, and any future changes in U.S. GAAP or other accounting principles applicable to us; • incorrect estimates or judgments relating to our critical accounting policies; • our failure to comply with current and future federal and state privacy, security and data protection laws, regulations or standards; • inadequate investment in or maintenance of our operating platform and other information technology and business systems; • our activity being deemed dealing in security-based swaps and the possible regulatory and registration requirements of such dealing; • our decentralized finance (“DeFi”) activities and the evolving risks and uncertainties related thereto; • security breaches or incidents, loss or misuse of data, a failure in or breach of our operational or security systems or other disruptions; • disruptions in our disaster recovery systems or management continuity planning; • our ability to obtain, maintain, protect and enforce our intellectual property; • volatility of our market price and trading volume of our Class A common stock; • applicable restrictions that could make it impractical for us to continue our business as contemplated if we are deemed to be an investment company under the Investment Company Act of 1940, as amended; • our dependence on distributions from GDH LP to pay our taxes and expenses, including payments under our amended and restated tax receivables agreement between GDI, Galaxy Digital Holdings Inc. (“GDH Delaware”), and certain parties thereto dated May 13, 2025 (the “Tax Receivable Agreement”) and to fund dividend payments, if any; and • other statements regarding our future operations, financial condition, and prospects and business strategies. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or to changes in our expectations, except as required by law. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and 5 Table of Contents while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. You should read this Quarterly Report on Form 10-Q and the documents that we reference herein, that we have filed with the Securities and Exchange Commission (the “SEC”) as exhibits, with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect. 6 Table of Contents PART I - FINANCIAL INFORMATION Item 1. Financial Statements INDEX TO FINANCIAL STATEMENTS Page Galaxy Digital Inc. Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statements of Operations for the Three Months Ended March 31, 2025 and 2024 8 Condensed Consolidated Interim Statements of Financial Position as of March 31, 2025 and December 31, 2024 9 Condensed Consolidated Interim Statements of Changes in Equity for the Three Months Ended March 31, 2025 and 2024 10 Condensed Consolidated Interim Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 11 Notes to Condense d Consolidated Interim Financial Statements 12 Galaxy Digital Holdings LP Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statements of Operations for the Three Months Ended March 31, 2025 and 2024 14 Condensed Consolidated Interim Statements of Financial Position as of March 31, 2025 and December 31, 2024 15 C ondensed C onsolidated Interim Statements of Changes in Equity for the Three Months Ended March 31, 2025 and 2024 16 Condensed Consolidated Interim Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 17 Notes to Condense d Consolidated Interim Financial Statements 19 7 Table of Contents Galaxy Digital Inc. Condensed Consolidated Interim Statements of Operations For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 Revenue $ — $ — Operating expenses: Bank charges — 1 Total operating expenses — 1 Net loss before taxes — ( 1 ) Income tax expense / (benefit) — $ — Net loss $ — $ ( 1 ) The accompanying notes are an integral part of these condensed consolidated interim financial statements. 8 Table of Contents Galaxy Digital Inc. Condensed Consolidated Interim Statements of Financial Position As of March 31, 2025 and December 31, 2024 (Expressed in thousands of U.S. Dollars, Except Share and Per Share Data) (Unaudited) March 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 1 $ 1 Total current assets 1 1 Total assets $ 1 $ 1 Liabilities and stockholder’s equity Stockholder’s equity Common stock, par value $ 0.01 per share, 1,000 shares authorized, 100 shares issued and outstanding — — Additional paid in capital 5 5 Retained deficit ( 4 ) ( 4 ) Total stockholder’s equity 1 1 Total liabilities and stockholder’s equity $ 1 $ 1 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 9 Table of Contents Galaxy Digital Inc. Condensed Consolidated Interim Statements of Changes in Equity For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars, Except Share Data) (Unaudited) Common stock Additional paid in capital Retained earnings / (deficit) Total Number Amount Balance at December 31, 2023 1,000 $ — $ 5 $ ( 2 ) $ 3 Loss for the period — — — $ ( 1 ) $ ( 1 ) Balance at March 31, 2024 1,000 $ — $ 5 $ ( 3 ) $ 2 Balance at December 31, 2024 1,000 $ — $ 5 $ ( 4 ) $ 1 Loss for the period — — — — — Balance at March 31, 2025 1,000 $ — $ 5 $ ( 4 ) $ 1 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 10 Table of Contents Galaxy Digital Inc. Condensed Consolidated Interim Statements of Cash Flows For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 Operating activities Loss for the period $ — $ ( 1 ) Net cash provided by / (used in) operating activities — ( 1 ) Net increase / (decrease) in cash and cash equivalents — ( 1 ) Cash and cash equivalents, beginning of period 1 3 Cash and cash equivalents, end of period $ 1 $ 2 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 11 Table of Contents Galaxy Digital Inc. Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) 1.  ORGANIZATION Galaxy Digital Inc. (“GDI” or the “Corporation”) is currently a wholly owned subsidiary of Galaxy Digital Holdings Ltd. (“GDHL” or “GDH Ltd.”). The Corporation was formed in Delaware on April 23, 2021, under the name Galaxy Digital Pubco Inc. The Corporation changed its name from Galaxy Digital Pubco Inc. to Galaxy Digital Inc. on September 24, 2021. The Corporation was formed primarily for the purposes of redomiciling GDHL and Galaxy Digital Holdings LP (“GDH LP”), collectively the “existing Galaxy businesses,” to Delaware. The Corporation’s costs and obligations, including those related to the Corporation’s formation and the redomiciling transactions, have been and will be paid by GDHL except certain banking fees. 2.  SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated interim statements of financial position have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”). As of March 31, 2025 and December 31, 2024, the Corporation did not have any subsidiaries and as such the numbers presented as of the three months ended March 31, 2025 and the year ended December 31, 2024 are on a stand-alone basis. Cash and Cash Equivalents Cash and cash equivalents includes cash on hand and deposits in financial institutions. Expenses The Corporation was charged certain banking fees. These fees are recognized as incurred and presented in the Corporation’s consolidated statements of operations as operating expenses. 3.  COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Corporation and its affiliates may be threatened with, named as defendants in, or made parties to pending and potential legal actions, including class actions, arbitrations or other disputes. The Corporation’s affiliates are subject to oversight by numerous regulatory and other governmental agencies and may receive inspection requests, investigative subpoenas and requests from regulators for documents and information, which could lead to enforcement investigations and actions. The Corporation reviews any lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with its accounting policies. On March 27, 2025, the Corporation, GDHL and certain of its affiliates reached an agreement with the New York State Attorney General to resolve civil claims relating to certain investments, trading, and public statements made in connection with the LUNA digital asset from late 2020 to 2022. As of March 31, 2025 and December 31, 2024, GDH LP accrued a legal provision of $ 186 million and $ 182 million, respectively. The accrued amounts include the impact of discounting the estimated cash flows. The undiscounted amount of the settlement is $ 200 million and payable between 2025 and 2028. Under the terms of the settlement, GDH LP also agreed to, among other things, compliance enhancements related to public statements about cryptocurrency and purchases and sales of cryptocurrency. 4.  STOCKHOLDER’S EQUITY The Corporation is authorized to issue 1,000 shares of Common Stock, par value $ 0.01 per share. On April 23, 2021, the Corporation issued 100 shares of Common Stock to GDHL in exchange for a nominal amount of cash. In September 2023, the Corporation was capitalized with additional funds for the Corporation to cover banking fees. 5.  INCOME TAXES Galaxy Digital Inc. is a US Corporation treated as a corporation for U.S. Federal tax purposes. 12 Table of Contents Galaxy Digital Inc. Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Provision for income taxes is provided for using the asset and liability method, whereby deferred income tax assets and liabilities are recognized for the expected future tax consequences of the differences between the U.S. GAAP and tax bases of assets and liabilities, measured at the balance sheet date using the tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded when, based on the weight of all available evidence, management determines it is more likely than not that some portion or all of the deferred tax assets will not be realized. Significant judgment is required in determining whether a valuation allowance should be established, as well as the amount of such allowance. The Corporation recognizes the income tax accounting effects of changes in tax law or rates (including retroactive changes) in the period of enactment. The Corporation analyzes its tax filing positions in all tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions, which include all periods starting from 2020. If the Corporation determines that uncertainties in tax positions exist, the Corporation recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the greatest benefit that is more likely than not to be realized. Due to the complexity of tax laws and the required interpretations by both the taxpayer and respective taxing authorities, significant judgment is required in determining tax expense / (benefit) and in evaluating tax positions and related uncertainties under U.S. GAAP. The Corporation reviews its tax positions quarterly and adjusts its tax balances, as necessary, when new legislation is passed or new information becomes available. Interest and penalties, when applicable, related to income taxes are recorded within Income taxes expense / (benefit) in the Corporation’s consolidated statements of operations. 6.  SUBSEQUENT EVENTS Effective May 13, 2025, GDI, GDHL and GDH LP consummated a series of transactions resulting in the reorganization of Galaxy’s corporate structure (the “Reorganization Transactions”). Under the terms of the Reorganization Transactions, GDHL and GDH LP changed their jurisdiction of incorporation from the Cayman Islands to the state of Delaware, and GDI became the successor public company of GDHL, with all outstanding GDHL ordinary shares becoming Class A common stock of GDI. 13 Galaxy Digital Holdings LP Condensed Consolidated Interim Statements of Operations For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars) (Unaudited) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024 Revenues 12,976,206 9,335,372 Net gain / (loss) on digital assets ( 18,223 ) 346,393 Net gain / (loss) on investments ( 133,167 ) 63,018 Net gain / (loss) on derivatives trading 31,059 83,640 Revenues and gains / (losses) from operations 12,855,875 9,828,423 Operating expenses: Transaction expenses 13,059,439 9,313,616 Compensation and benefits 56,953 61,071 General and administrative 86,575 19,685 Technology 9,887 6,492 Professional fees 20,772 13,629 Notes interest expense 14,071 6,976 Total operating expenses 13,247,697 9,421,469 Other income / (expense): Unrealized gain / (loss) on notes payable - derivative 89,606 ( 9,713 ) Other income / (expense), net 672 213 Total other income / (expense) 90,278 ( 9,500 ) Net income / (loss) before taxes $ ( 301,544 ) $ 397,454 Income taxes expense / (benefit) ( 6,112 ) 9,327 Net income / (loss) $ ( 295,432 ) $ 388,127 14 Galaxy Digital Holdings LP Condensed Consolidated Interim Statements of Financial Position As of March 31, 2025 and December 31, 2024 (Expressed in thousands of U.S. Dollars) (Unaudited) March 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 509,438 $ 462,103 Digital intangible assets (includes $ 1,671.3 and $ 1,997.4 million measured at fair value) 2,123,860 2,547,581 Digital financial assets 514,479 359,665 Digital assets loan receivable, net of allowance 280,095 579,530 Investments 545,754 834,812 Assets posted as collateral 506,634 277,147 Derivative assets 128,353 207,653 Accounts receivable (includes $ 4.5 and $ 4.2 million due from related parties) 28,864 55,279 Digital assets receivable 17,674 53,608 Loans receivable 407,966 476,620 Prepaid expenses and other assets 29,884 26,892 Total current assets 5,093,001 5,880,890 Non-current assets Digital assets receivable 1,996 7,112 Investments (includes $ 669.6 and $ 745.5 million measured at fair value) 736,060 808,694 Digital intangible assets 15,030 20,979 Loans receivable, non-current 56,800 — Property and equipment, net 262,216 237,038 Other non-current assets 113,052 107,105 Goodwill 58,037 58,037 Total non-current assets 1,243,191 1,238,965 Total assets $ 6,336,192 $ 7,119,855 Liabilities and Equity Current liabilities Derivative liabilities 89,702 165,858 Accounts payable and accrued liabilities (includes $ 111.0 and $ 96.9 million due to related parties) 270,468 281,531 Digital assets borrowed 1,760,455 1,497,609 Payable to customers 19,288 19,520 Loans payable 345,249 510,718 Collateral payable 943,513 1,399,655 Other current liabilities 73,358 13,034 Total current liabilities 3,502,033 3,887,925 Non-current liabilities Notes payable 763,798 845,186 Digital assets borrowed, non-current 6,603 — Other non-current liabilities 162,114 192,392 Total non-current liabilities 932,515 1,037,578 Total liabilities 4,434,548 4,925,503 Commitments and contingencies (Note 17) Equity Unit holders’ capital 1,901,644 2,194,352 Total equity 1,901,644 2,194,352 Total liabilities and equity $ 6,336,192 $ 7,119,855 The accompanying notes are an integral part of these consolidated financial statements. 15 Galaxy Digital Holdings LP Condensed Consolidated Interim Statements of Changes in Equity For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars except share data) (Unaudited) Class A Unit Capital Class B Unit Capital Total Number Amount Number Amount Balance at December 31, 2023 109,299,332 708,481 215,928,474 1,002,690 1,711,171 Equity based compensation — 6,271 — 12,411 18,682 Distributions — ( 12,696 ) — ( 24,002 ) ( 36,698 ) Vesting of Class B Units — — — — — Exchange of Class B Units — — — Cancellation of Class A Units ( 8,234 ) ( 774 ) — — ( 774 ) Issuance of Class A Units, net of issuance cost 254,387 153 — — 153 Other — ( 206 ) — ( 406 ) ( 612 ) Income for the period — 130,339 — 257,788 388,127 Balance at March 31, 2024 109,545,485 $ 831,568 215,928,474 $ 1,248,481 $ 2,080,049 Balance at December 31, 2024 127,577,780 $ 949,730 215,862,343 $ 1,244,622 $ 2,194,352 Equity based compensation — 5,110 — 8,628 13,738 Distributions — ( 3,571 ) — ( 5,865 ) ( 9,436 ) Exchange of Class B Units — — — — — Cancellation of Class A Units ( 61,040 ) ( 3,288 ) — — ( 3,288 ) Issuance of Class A Units, net of issuance cost 485,977 2,247 — — 2,247 Other — ( 259 ) — ( 278 ) ( 537 ) Income for the period — ( 109,942 ) — ( 185,490 ) ( 295,432 ) Balance at March 31, 2025 128,002,717 $ 840,027 215,862,343 $ 1,061,617 $ 1,901,644 The accompanying notes are an integral part of these consolidated financial statements. 16 Galaxy Digital Holdings LP Condensed Consolidated Interim Statements of Cash Flows For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars) (Unaudited) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024 Operating activities Income / (loss) for the period $ ( 295,432 ) $ 388,127 Adjustments for: Digital assets sales revenue ( 5,535,721 ) ( 1,242,643 ) Digital assets sales cost 5,552,501 1,179,478 Impairment of digital assets 49,070 3,253 Depreciation and amortization 13,591 9,500 Other impairment 49,222 — Equity based compensation 13,738 18,652 Noncash expense from borrowing 25,327 16,064 Noncash lending and net staking income ( 34,839 ) ( 20,436 ) Net (gain) / loss on digital assets 18,223 ( 346,393 ) Net (gain) / loss on investments 133,167 ( 63,018 ) Net (gain) /loss on derivatives trading ( 31,059 ) ( 83,640 ) Net unrealized gain / (loss) on notes payable – derivative ( 89,606 ) 9,713 Noncash notes interest expense 14,071 6,976 Net deferred tax expense / (benefit) ( 7,152 ) 3,514 Other noncash adjustments ( 1,208 ) ( 1,329 ) Changes in operating assets and liabilities: Digital assets 198,148 244,945 Digital assets receivable 41,528 197 Derivative assets / liabilities 34,203 151,095 Accounts receivable 24,753 ( 1,353 ) Prepaid expenses and other assets ( 3,562 ) 2,199 Assets posted as collateral — ( 12,409 ) Collateral payable ( 25,577 ) 11,717 Accounts payable and accrued liabilities ( 15,069 ) ( 3,852 ) Other current liabilities 65,911 ( 194,013 ) Other non-current liabilities ( 34,815 ) ( 1,285 ) Net cash provided by / (used in) operating activities 159,413 75,059 Investing activities Proceeds from paydowns and maturities of loans receivable 64,072 33,109 Disbursements for loans receivable ( 52,593 ) ( 45,502 ) Purchase of property, equipment and intangible assets ( 91,642 ) ( 25,166 ) Disposal of property and equipment 7,954 1,560 Purchase of investments ( 645,333 ) ( 2,261,582 ) Proceeds and distributions from investments 781,642 1,930,839 Net cash provided by / (used in) investing activities 64,100 ( 366,742 ) Financing activities Payable to customers ( 232 ) 77,298 Proceeds from loans payable 61,921 202,826 17 Galaxy Digital Holdings LP Condensed Consolidated Interim Statements of Cash Flows For the Three Months Ended March 31, 2025 and 2024 (Expressed in thousands of U.S. Dollars) (Unaudited) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024 Repayments of loans payable ( 32,470 ) ( 20,500 ) Margin loans payable, net ( 194,920 ) — Share issuance, net of costs 2,247 153 Distributions ( 9,436 ) ( 36,698 ) Cancellation of Class A Units withheld ( 3,288 ) ( 774 ) Net cash provided by / (used in) financing activities ( 176,178 ) 222,305 Net increase / (decrease) in cash and cash equivalents 47,335 ( 69,378 ) Cash and cash equivalents, beginning of period 462,103 316,610 Cash and cash equivalents, end of period $ 509,438 $ 247,232 Supplemental disclosure of cash flow information and noncash investing and financing activities: Cash paid during the year for: Interest $ 10,931 $ 1,915 Taxes 2,314 378 Significant noncash investing and financing activities: Digital assets loan receivable, net of allowance 299,709 9,286 Assets posted as collateral 231,217 157,213 Digital assets borrowed 269,449 577,305 Collateral payable 430,565 91,759 Purchase of investments with noncash contributions 9,352 9,934 Proceeds from investments included in receivables 70 — Proceeds from investments received as digital assets 96,461 6,714 Additions to property, plant and equipment and intangible assets 753 2,101 Disposals of property, plant and equipment and intangible assets 1,370 — Reclassification between derivatives and investments — 389 Origination of loans receivable with noncash consideration — 2,966 The accompanying notes are an integral part of these consolidated financial statements. 18 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) 1.  BASIS OF PRESENTATION The Company Galaxy Digital Holdings LP (“GDH LP” and, together with its consolidated subsidiaries, the “Company,” “Galaxy,” “we,” “us,” or “our”) is a Cayman Islands exempted limited partnership formed on May 11, 2018. The Company’s principal address is 300 Vesey Street, New York, New York 10282. GDH LP, an operating partnership, is managed by the board of managers and officers of its general partner, Galaxy Digital Holdings GP LLC (“GDH GP” or the “General Partner”). Galaxy is a Cayman exempted limited partnership which is treated as a partnership for U.S. federal tax purposes. Galaxy Digital Holdings Ltd. (“GDH Ltd.”) holds a minority investment in the Company and has an active public listing on the Toronto Stock Exchange (“TSX”) under the ticker “GLXY.” Galaxy is a technology-driven diversified financial services and investment management firm that provides institutions with a full suite of scaled financial solutions spanning the digital assets ecosystem. Galaxy’s mission is engineering a new economic paradigm. Today, the Company is primarily focused on digital assets and blockchain technology, and how these technological innovations will alter the way we store and transfer value. The Company manages and reports its activities in the following three operating segments: Digital Assets, Data Centers, and Treasury and Corporate. General Partner GDH GP is a limited liability company incorporated under the laws of the Cayman Islands on July 26, 2018 and serves as the general partner of GDH LP. The sole member of the General Partner is Galaxy Group Investments LLC (“GGI”). The General Partner has a board of managers and officers (the “Board of Managers”). On November 24, 2022, GDH LP, GDH GP, GDH Ltd. and GDH Intermediate LLC (a wholly-owned subsidiary of GDH Ltd.) entered into a fifth amended and restated limited partnership agreement (as amended from time to time, the “LPA”). Basis of Presentation The accompanying condensed consolidated interim financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated interim financial statements include the accounts of GDH LP, its wholly-owned subsidiaries and all entities in which it holds a controlling financial interest. All intercompany balances and transactions have been eliminated. We have prepared the accompanying unaudited condensed consolidated interim financial statements in accordance with the accounting policies described in the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2024 and the interim reporting requirements of Regulation S-X for the three months ended March 31, 2025. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024. The Company’s interim results are not necessarily indicative of its results for a full year. 2.  SIGNIFICANT ACCOUNTING POLICIES Except for the items described below, the Company has applied its accounting policies consistently from the previously disclosed annual financial statements. Recent Accounting Developments In January 2025, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) No. 122 (“SAB 122”), which rescinds the interpretive guidance previously provided in SAB No. 121 (“SAB 121”). SAB 121 had required entities to recognize a liability and corresponding asset for their obligation to safeguard crypto-assets 19 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) held for platform users. With the issuance of SAB 122, entities are no longer mandated to recognize such liabilities and assets solely based on safeguarding responsibilities. Instead, entities should assess whether to recognize a liability related to the risk of loss under such obligations by applying the recognition and measurement requirements for contingencies as outlined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 450-20, Loss Contingencies . In March 2025, the FASB issued ASU 2025-02, Liabilities (Topic 405) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122, which incorporates SEC Staff Accounting Bulletin No. 122 into the Codification. The Company adopted SAB 122 and ASU 2025-02 during the year ended December 31, 2024 on a fully retrospective basis. 3.  BUSINESS COMBINATIONS Fierce On December 9, 2024, a subsidiary controlled by the Company acquired all shares of Fierce Technology, Inc. ("Fierce"), which provides financial application software, for approximately $ 12.5 million ($ 3.0 million in cash and $ 9.5 million in equity). The Company determined that the acquisition of Fierce constituted a business combination under ASC Topic 805, Business Combinations (“ASC 805”). The consideration transferred was measured at the fair value of the cash and equity paid, and the estimated contingent consideration of approximately $ 1.2 million, in the form of GDH Ltd. shares, that is payable by the Company upon determination of the final working capital amounts. The Company recognized the following assets and liabilities in relation to the acquisition of Fierce: (in thousands) Cash $ 315 Intangible assets 411 Goodwill 8,588 Other non-current assets 3,296 Total assets $ 12,610 Deferred tax liability $ 110 Total liabilities $ 110 The Company recorded $ 8.6 million of goodwill which was attributed to the Digital Assets segment. Goodwill represents the future economic benefit arising from assets acquired which could not be individually identified and separately recognized. Goodwill was attributed to the expected synergies from combining operations with GDH LP and the expected future cash flows of the combined business. The Company also recognized a deferred tax asset of $ 3.3 million related to the net operating losses of Fierce that the Company expects to utilize. The goodwill from this acquisition is not deductible for tax purposes. Acquired intangible assets included trade names, trademarks, and technology platforms valued at $ 0.4 million. The intangible assets were measured at acquisition date fair value using an income approach in accordance with the Company's accounting policies. The Company incurred acquisition related transaction costs of $ 0.2 million, of which the majority represented legal fees. The revenue and net income included in the Company's consolidated statements of operations contributed by Fierce for the year ended December 31, 2024, from the date of the acquisition, were not material to the Company. The pro forma impact of the acquisition on the Company’s revenue and net income for the years ended December 31, 2024 and 2023 would not have been material to the Company. CryptoManufaktur On July 18, 2024, a subsidiary controlled by the Company acquired the assets of CryptoManufaktur LLC (“CMF”) for approximately $ 12.4 million. The Company determined that the acquisition of CMF constituted a 20 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) business combination under ASC 805. CMF provides staking infrastructure, primarily on the Ethereum blockchain, as well as data oracle services. The consideration transferred was measured at the fair value of the cash and equity paid, and the estimated contingent consideration of approximately $ 5.5 million, which is payable by the Company if CMF achieves certain financial and operating targets through the end of 2026. On February 28, 2025, an additional 76,573 shares were issued for milestone consideration. The Company recognized the following assets and liabilities in relation to the acquisition of CMF on July 18, 2024: (in thousands) Intangible assets $ 7,213 Goodwill 5,193 Counterparty digital assets 943,445 Total assets $ 955,851 Counterparty digital asset obligations 943,445 Accounts payable and accrued liabilities 21 Total liabilities $ 943,465 The Company recorded $ 5.2 million of goodwill which was attributed to the Digital Infrastructure Solutions segment. Goodwill represents the future economic benefit arising from assets acquired which could not be individually identified and separately recognized. Goodwill was attributed to the expected synergies from combining operations with GDH LP and the expected future cash flows of the combined business. The Company expects all of the goodwill from this acquisition to be deductible for tax purposes. Acquired intangible assets included customer relationships valued at $ 7.2 million, which will be amortized over an estimated useful life of 5 years. The intangible assets were measured at acquisition date fair value using an income approach in accordance with the Company's accounting policies. The Company incurred acquisition related transaction costs of $ 0.5 million of which the majority represented professional fees. The revenue and net income included in the Company's condensed consolidated interim statements of operations contributed by CMF from the date of the acquisition were not material to the Company. The pro forma impact of the acquisition on the Company’s revenue and net income for the year ended December 31, 2024 would have been an increase of approximately $ 22 million and $ 2 million, respectively. The pro forma impact of the acquisition on the Company’s revenue and net income for the year ended December 31, 2023 would have been $ 21 million and $ 1 million, respectively. 4.  REVENUES The following tables provide additional details related to the Company’s Revenues for the three months ended March 31, 2025 and 2024. (in thousands) Digital Assets Data Centers Treasury and Corporate March 31, 2025 Digital assets sales $ 12,849,568 $ — $ — $ 12,849,568 Fees 14,580 — ( 3,063 ) 11,517 Blockchain rewards 80,700 — ( 9,588 ) 71,112 Proprietary mining — — 11,236 11,236 Revenues from contracts with customers $ 12,944,848 $ — $ ( 1,415 ) $ 12,943,433 Blockchain rewards from non-customers 1,055 — 4,309 5,364 Lending 25,626 — 1,783 27,409 Total revenues $ 12,971,529 $ — $ 4,677 $ 12,976,206 21 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) (in thousands) Digital Assets Data Centers Treasury and Corporate March 31, 2024 Digital assets sales $ 9,257,178 $ — $ — $ 9,257,178 Fees 18,854 — 9,274 28,128 Blockchain rewards 8,251 — 2,023 10,274 Proprietary mining — — 20,128 20,128 Revenues from contracts with customers $ 9,284,283 $ — $ 31,425 $ 9,315,708 Blockchain rewards from non-customers 2,910 — — 2,910 Lending 15,376 — 1,378 16,754 Total revenues $ 9,302,569 $ — $ 32,803 $ 9,335,372 5.  TRANSACTION EXPENSES The Company incurred the following Transaction expenses for the three months ended March 31, 2025 and 2024. (in thousands) Digital Assets Data Centers Treasury and Corporate March 31, 2025 Digital assets sales costs $ 12,839,085 $ — $ — $ 12,839,085 Impairment of digital assets 78,308 — 34,121 112,429 Blockchain reward distributions 67,766 — ( 11,320 ) 56,446 Borrowing costs 5,789 — 28,049 33,838 Mining and hosting costs — — 5,534 5,534 Other transaction expenses (1) 8,220 — 3,887 12,107 Transaction expenses $ 12,999,168 $ — $ 60,271 $ 13,059,439 (in thousands) Digital Assets Data Centers Treasury and Corporate March 31, 2024 Digital assets sales costs $ 9,247,968 $ — $ — $ 9,247,968 Impairment of digital assets 8,934 — 16,591 25,525 Blockchain reward distributions 5,594 — ( 5,215 ) 379 Borrowing costs 4,009 — 13,874 17,883 Mining and hosting costs — — 15,255 15,255 Other transaction expenses (1) 5,620 — 986 6,606 Transaction expenses $ 9,272,125 $ — $ 41,491 $ 9,313,616 _______________ (1) Other transaction expenses include trading commissions, custody, and exchange fees. 22 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) 6.  DIGITAL ASSETS The following tables provide additional detail related to the digital assets as of March 31, 2025 and December 31, 2024: (in thousands) Digital intangible assets, current Digital financial assets Digital intangible assets, non-current March 31, 2025 Digital intangible assets (includes $ 1,020.2 million measured at fair value) 1,054,836 — 4,957 1,059,793 Digital financial assets — 126,950 — 126,950 Total self-custodied (1) 1,054,836 126,950 4,957 1,186,743 Digital intangible assets (includes $ 471.0 million measured at fair value) 589,898 — 10,073 599,971 Digital financial assets — 350,949 — 350,949 Total held with third parties, including centralized trading platforms 589,898 350,949 10,073 950,920 Collateral posted with counterparties (2) (measured at fair value) 195,059 — — 195,059 Receipt tokens from decentralized finance protocols (3) 112,155 20,095 — 132,250 Other digital assets associated with decentralized finance protocols (3) (4) 171,912 16,485 — 188,397 Total digital assets associated with decentralized finance protocols 284,067 36,580 — 320,647 Total digital assets $ 2,123,860 $ 514,479 $ 15,030 $ 2,653,369 23 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) (in thousands) Digital intangible assets, current Digital financial assets Digital intangible assets, non-current December 31, 2024 Digital intangible assets (includes $ 1,480.9 million measured at fair value) $ 1,544,377 $ — $ 75 $ 1,544,452 Digital financial assets — 353,459 — 353,459 Total self-custodied (1) 1,544,377 353,459 75 1,897,911 Digital intangible assets (includes $ 451.4 million measured at fair value) 523,002 — 20,904 543,906 Digital financial assets — 1,392 — 1,392 Total held with third parties, including centralized trading platforms 523,002 1,392 20,904 545,298 Collateral posted with counterparties (2) (measured at fair value) 85,874 — — 85,874 Receipt tokens from decentralized finance protocols (3) 298,263 — — 298,263 Other digital assets associated with decentralized finance protocols (3) (4) 96,065 4,814 — 100,879 Total digital assets associated with decentralized finance protocols 394,328 4,814 — 399,142 Total digital assets $ 2,547,581 $ 359,665 $ 20,979 $ 2,928,225 _______________ (1) Includes digital assets subject to sale restrictions, as well as certain digital assets bonded to validator nodes. Excludes digital assets issued by decentralized finance protocols which are self-custodied. (2) Digital intangible assets posted as collateral under master loan agreements to third parties, for which control has not transferred, supports digital asset and fiat borrowings of $ 117.6 million and $ 53.7 million as of March 31, 2025 and December 31, 2024, respectively. (3) Digital assets associated with decentralized finance protocols collectively support borrowings on these platforms of $ 23.2 million and $ 124.9 million as of March 31, 2025 and December 31, 2024, respectively . Decentralized finance protocols typically require borrowers to maintain a loan to value ratio of no greater than 70% and 100%. (4) Includes self-custodied wrapped digital assets and digital assets held in smart contracts where the Company retains control. Digital Assets Associated with Decentralized Finance Protocols Receipt Tokens from Decentralized Finance Protocols Receipt tokens from decentralized finance protocols are digital assets issued by decentralized protocols which derive their value from other digital assets. These tokens allow the holder to redeem the underlying digital assets from the decentralized protocols. Although these receipt tokens are generally stored in the Company's self-custodied wallets, their economic values are derived from the operations of the protocols that issued the tokens and other digital assets that are held in such protocols via smart contracts. These receipt tokens are used in trading, borrowing and staking on decentralized finance protocols. Other Digital Assets Associated with Decentralized Finance Protocols In order to transact on decentralized finance protocols, the Company converts some of its digital assets into wrapped tokens (e.g., “wBTC” and “wETH”). Wrapped tokens are digital assets that can interact with smart contracts or operate on another blockchain. The Company typically wraps digital assets in expectation of deploying them on decentralized finance protocols. 24 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Some decentralized finance protocols may hold the Company's digital assets in a smart contract from which only the Company can redeem the digital assets. These decentralized finance protocols do not issue receipt tokens and do not obtain control of the Company's digital assets. Therefore the tokens continue to be recognized by the Company. Digital Assets Subject to Lock-up Schedules Certain digital assets are subject to sale restrictions through lock-up schedules typically associated with purchases from foundations. Digital assets restricted by lock-up schedules which have not yet been received by the Company are recognized as Digital assets receivable. The Company held $ 41.4 million and $ 59.9 million of digital assets restricted by lock-up schedules as of March 31, 2025 and December 31, 2024. The fair value of digital assets subject to sale restrictions by lock-up schedule acquired prior to January 1, 2024 includes a discount for lack of marketability. Sale restrictions associated with these digital assets range from approximately one week to approximately 3 years. Staked Digital Assets The Company had staked $ 266.8 million and $ 371.7 million of digital assets, including digital assets staked on decentralized finance protocols (i.e., liquid staked tokens), as of March 31, 2025 and December 31, 2024, respectively. The Company’s ability to sell or transfer staked digital assets is subject to restrictions related to unbonding periods, which are based on network traffic on the respective blockchains. As of March 31, 2025 and December 31, 2024, the majority of staked digital assets on various blockchains including Ethereum could be unbonded within 7 and 11 days , respectively. The majority of the Company’s staked digital assets are bonded to nodes operated by the Company. The blockchain rewards generated from proprietary staking activities for the three months ended March 31, 2025 and 2024 were $ 6.2 million and $ 12.3 million, respectively. Digital Assets Rollforward The following tables summarize the activity within our significant digital asset classes for the three months ended March 31, 2025 and the year ended December 31, 2024: Assets (in thousands) Carrying value as of December 31, 2024 Purchases and receipts (1) Sales or disbursements (2) Net transferred (borrow / loaned) (3) Impairment Gains (4) Losses (4) Carrying value as of March 31, 2025 Digital intangible assets $ 550,203 $ 2,906,707 $ ( 3,122,560 ) $ 153,760 $ ( 112,429 ) $ 76,888 $ ( 55 ) $ 452,514 Digital intangible assets at fair value 2,018,357 11,118,886 ( 11,141,072 ) 265,154 — 347,812 ( 922,761 ) 1,686,376 Digital financial assets 359,665 4,092,639 ( 3,940,321 ) 4,707 — 973 ( 3,184 ) 514,479 Total digital assets $ 2,928,225 $ 18,118,232 $ ( 18,203,953 ) $ 423,621 $ ( 112,429 ) $ 425,673 $ ( 926,000 ) $ 2,653,369 Assets (in thousands) Carrying value as of December 31, 2023 Purchases and receipts (1) Sales or disbursements (2) Net transferred (borrow / loaned) (3) Impairment Gains (4) Losses (4) Carrying value as of December 31, 2024 Digital intangible assets $ 277,634 $ 13,951,687 $ ( 13,788,542 ) $ ( 54,557 ) $ ( 331,920 ) $ 522,732 $ ( 26,831 ) $ 550,203 Digital intangible assets at fair value 736,151 36,373,625 ( 36,833,231 ) 717,704 — 2,772,182 ( 1,748,074 ) 2,018,357 Digital financial assets 74,386 12,231,270 ( 11,756,032 ) ( 190,266 ) — 2,507 ( 2,200 ) 359,665 Total digital assets $ 1,088,171 $ 62,556,582 $ ( 62,377,805 ) $ 472,881 $ ( 331,920 ) $ 3,297,421 $ ( 1,777,105 ) $ 2,928,225 __________________ (1) Includes receipts of digital intangible assets and digital financial assets resulting from non-revenue transactions (e.g., cross-chain swaps of similar assets), receipt of loan interest, and pre-launch investments and other investment distributions. (2) Digital intangible assets consists of digital assets sales costs, excluding impairment, included within Transaction expense in the condensed consolidated interim statement of operations and disbursements of digital assets to satisfy certain liabilities. Digital financial assets includes disbursements to satisfy certain liabilities. 25 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) (3) Includes all movements impacting the Digital intangible assets and Digital financial assets line items in the condensed consolidated interim statement of financial position associated with digital asset lending and borrowing activities including collateral and fair value revaluations, as applicable. (4) Includes realized gains of $ 365.2 million and $ 3.2 billion and realized losses of $ 820.7 million and $ 1.6 billion for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively. Significant Digital Asset Holdings The Company's digital asset balance includes digital assets borrowed from counterparties, deposited by counterparties as collateral for which Galaxy has control, and any digital assets which Galaxy has pledged as collateral and retains control. The following tables show our most significant gross digital asset holdings as of March 31, 2025 and December 31, 2024: March 31, 2025 (in thousands except for quantity) Quantity Historical cost Carrying value Bitcoin 12,830 $ 1,089,965 $ 1,058,936 USDC 426,423,591 426,867 426,338 Ether 155,026 301,742 282,468 SOL 995,072 124,293 123,918 XRP 16,931,695 38,010 35,380 USDG 30,558,143 30,566 30,558 SUI 12,037,421 30,124 27,283 Other not meaningful 274,143 215,974 Digital assets measured at fair value 2,315,710 2,200,855 Digital assets not measured at fair value not meaningful 511,991 452,514 Total digital assets $ 2,827,701 $ 2,653,369 December 31, 2024 (in thousands except for quantity) Quantity Historical cost Carrying value Bitcoin 13,704 $ 1,335,194 $ 1,277,816 Ether 112,248 378,907 373,871 USDC 333,713,029 334,224 333,652 SOL 498,767 73,567 94,288 UNI 5,216,565 71,911 68,922 TIA 9,626,784 17,995 34,116 Other not meaningful 231,228 195,357 Digital assets measured at fair value 2,443,026 2,378,022 Digital assets not measured at fair value not meaningful 598,295 550,203 Total digital assets $ 3,041,321 $ 2,928,225 As of March 31, 2025 approximate ly 40 % and 15 % of the Company’s digital assets associated with decentralized finance protocols relate to digital assets issued by Coinbase wrapped bitcoin and Aave, respectively. 7.  DIGITAL ASSETS LOAN RECEIVABLE AND DIGITAL ASSETS BORROWED In the ordinary course of business, the Company enters into agreements to borrow digital assets to finance the Company’s trading operations. The Company may lend digital assets borrowed from counterparties or acquired through other operations. As of March 31, 2025 and December 31, 2024, no Digital asset loans receivable were past due. 26 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Digital Assets Loan Receivable, Net of Allowance (in thousands) March 31, 2025 December 31, 2024 Digital asset loans receivable $ 280,245 $ 579,954 Less: Allowance for credit losses ( 150 ) ( 424 ) Digital asset loans receivable, net $ 280,095 $ 579,530 Collateral Payable Associated with Digital Assets Loan Receivable (in thousands) March 31, 2025 December 31, 2024 Collateral payable - Digital assets $ 286,781 $ 673,427 Collateral payable - Cash 41,966 44,535 Collateral payable associated with digital assets loan receivable $ 328,747 $ 717,962 Digital Assets Borrowed (in thousands) March 31, 2025 December 31, 2024 Digital assets borrowed - current $ 1,760,455 $ 1,497,609 Digital assets borrowed - non-current $ 6,603 $ — Digital assets borrowed $ 1,767,058 $ 1,497,609 The Company borrows digital assets from both over-the-counter and decentralized finance sources. The most significant digital assets borrowings as of March 31, 2025 were bitcoin and tether, including associated wrapped tokens, which represented approximately 78 % of total Digital assets borrowed. The most significant digital assets borrowings as of December 31, 2024 were bitcoin, ether, DAI, and SOL, including associated wrapped tokens, which represented approximately 87 % of total Digital assets borrowed. Assets Posted as Collateral Associated with Digital Assets Borrowed (in thousands) March 31, 2025 December 31, 2024 Assets posted as collateral - Digital intangible assets $ 309,065 $ 84,221 Assets posted as collateral - Digital financial assets — — Less: Allowance for credit loss ( 2,477 ) ( 826 ) Assets posted as collateral associated with digital assets borrowed $ 306,588 $ 83,395 Collateral deposited in decentralized finance protocols associated with digital asset loans payable to the decentralized protocols are recognized in Digital intangible assets. Collateral posted with counterparties for which the Company retains control are also recognized in Digital intangible assets. Refer to Note 6 for additional information regarding Digital intangible assets. 8.  DERIVATIVES The Company enters into derivative contracts primarily for the purpose of trading, risk management, and hedging of operating costs. For the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 31.1 million and $ 83.6 million, respectively, of net derivative gain related to free-standing derivatives. 27 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The breakdown of the Company’s derivatives portfolio, as of March 31, 2025 and December 31, 2024 was as follows (in thousands): March 31, 2025 (in thousands) Notional Amounts (1) Gross Fair Value-Derivative Assets Gross Fair Value-Derivative Liabilities Digital assets 3,041,477 95,127 ( 67,313 ) Foreign currencies 730,533 19,349 ( 14,026 ) Equity securities 597,258 13,720 ( 6,993 ) Interest rates 297,729 157 ( 708 ) Commodities 11,563 — ( 662 ) 4,678,561 128,353 ( 89,702 ) Digital assets receivable 4,036 19,670 — Embedded derivatives — Digital assets borrowed 1,949,500 223,469 ( 41,027 ) Embedded derivatives — Collateral payable 978,134 143,027 ( 58,988 ) Embedded derivatives — Notes payable 847,500 — ( 46,586 ) December 31, 2024 Notional Amounts (1) (in thousands) Gross Fair Value-Derivative Assets Gross Fair Value-Derivative Liabilities Digital assets 4,685,112 185,208 ( 145,493 ) Foreign currencies 19,259 12,064 ( 10,483 ) Equity securities 1,049,846 10,343 ( 9,683 ) Interest rates 5,002 19 ( 13 ) Commodities 10,583 19 ( 186 ) 5,769,802 207,653 ( 165,858 ) Digital assets receivable 3,911 60,720 — Embedded derivatives — Digital assets borrowed 1,269,013 24,039 ( 252,635 ) Embedded derivatives — Collateral payable 1,219,247 55,848 ( 161,261 ) Embedded derivatives — Notes payable 847,500 — ( 136,192 ) (1) Notional amounts represent the U.S. Dollar denominated size of the underlying assets for the derivative instruments. They do not accurately reflect the Company's economic exposure as they do not reflect the Company's long and short derivative positions. The below table represents the breakdown of collateral payable associated with derivative positions as of March 31, 2025 and December 31, 2024: (in thousands) March 31, 2025 December 31, 2024 Collateral payable — Digital assets $ 28,569 $ 30,600 Collateral payable — Cash 7,452 30,460 Collateral payable associated with derivatives $ 36,021 $ 61,060 28 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The Company did not post any collateral in association with its derivative positions as of March 31, 2025 and December 31, 2024. 9.  INVESTMENTS Net gain / (loss) on investments in the Company’s condensed consolidated interim statements of operations consists of the following: • Net realized gains / (losses) related to sales of investments were $ 153.0 million and $( 172.8 ) million for the three months ended March 31, 2025 and March 31, 2024, respectively. • Net change in unrealized gains / (losses) related to investments were $( 286.1 ) million and $ 235.9 million for the three months ended March 31, 2025 and March 31, 2024, respectively. • Accumulated net unrealized gains / (losses) related to investments held in the Company’s condensed consolidated interim statements of financial position were $ 337.1 million and $ 627.1 million as of March 31, 2025 and December 31, 2024, respectively. Investments at Measurement Alternative The following table presents investments for which the measurement alternative has been elected. These investments have been valued at cost less impairment and where applicable at observable transaction prices based on orderly transactions for the identical or similar investments of the same issuer. Impairment Upward Adjustments (in thousands) Carrying Value Period to date Cumulative Period to date Cumulative March 31, 2025 $ 66,412 $ ( 1,282 ) $ ( 60,591 ) $ 1,642 $ 64,834 December 31, 2024 $ 63,227 $ ( 6,990 ) $ ( 59,608 ) $ 2,214 $ 63,652 For the three months ended March 31, 2025 and the year ended December 31, 2024, one investment with a fair value of $ 1.0 million and eight investments with a combined fair value of $ 21.2 million were reclassified out of measurement alternative due to changes to investee capital structure and valuation methodology. These investments are now held at fair value. Refer to Note 11 for additional information regarding investments held at fair value. 10.  FAIR VALUE OPTION The Company elected the fair value option for certain eligible assets. The following table summarizes the financial instruments for which the fair value option has been elected: (in thousands) March 31, 2025 December 31, 2024 Assets Digital financial assets $ 514,479 $ 359,664 Investments 527,398 558,093 Total $ 1,041,877 $ 917,757 The fair value option was only elected for investments, within the Investments line item, where the Company was deemed to have significant influence and otherwise would have applied the equity method of accounting. Realized and unrealized gains / (losses) on financial instruments for which the fair value option has been elected are recorded as Net gain / (loss) on investments and Net gain / (loss) on digital assets in the Company’s condensed 29 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) consolidated interim statements of operations. The following table presents the realized and net change in unrealized gains / (losses) on the financial instruments on which the fair value option was elected: Three months ended March 31, 2025 Three months ended March 31, 2024 (in thousands) Realized Gains / (Losses) Net Change in Unrealized Gains / (Losses) Realized Gains / (Losses) Net Change in Unrealized Gains / (Losses) Investments $ 36,913 $ ( 94,894 ) $ 1,075 $ 160,098 Realized and unrealized losses for digital assets classified as financial assets were $ 2.2 million for the three months ended March 31, 2025 and not significant for the three months ended March 31, 2024. 11.  FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements Items measured on a recurring basis at fair value: As of March 31, 2025 (in thousands) Level 1 Level 2 Level 3 Total Assets Digital financial assets $ 477,899 $ 36,580 $ — $ 514,479 Digital intangible assets at fair value 1,611,833 63,581 10,963 1,686,377 Digital assets loan receivable, net of allowance - Financial assets — 173,452 — 173,452 Digital assets receivable 18 10 19,642 19,670 Assets posted as collateral — Digital assets 506,634 — 506,634 Derivative assets 120,130 8,223 — 128,353 Embedded derivative – Collateral payable — 143,027 — 143,027 Embedded derivative – Digital assets borrowed — 223,469 — 223,469 Investments (1) 503,356 5,568 391,441 900,365 $ 2,713,236 $ 1,160,544 $ 422,046 $ 4,295,826 Liabilities Investments sold short (2) $ 69,358 $ — $ — $ 69,358 Derivative liabilities 81,237 8,465 — 89,702 Embedded derivative – Digital assets borrowed — 41,027 — 41,027 Embedded derivative –Collateral payable — 58,988 — 58,988 Embedded derivative – Notes payable — — 46,586 46,586 $ 150,595 $ 108,480 $ 46,586 $ 305,661 __________________ (1) Excludes equity securities measured utilizing net asset value as a practical expedient ($ 315.0 million) and equity securities utilizing the measurement alternative as they are without readily determinable fair values ($ 66.4 million). (2) Investments sold short are included in Other current liabilities in the Company’s condensed consolidated interim statements of financial position. 30 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) As of December 31, 2024 (in thousands) Level 1 Level 2 Level 3 Total Assets Digital financial assets $ 354,851 $ 4,814 $ — $ 359,665 Digital intangible assets at fair value 1,929,661 68,239 20,457 2,018,357 Digital assets loan receivable, net of allowance Financial assets — 393,734 — 393,734 Digital assets receivable 204 24 60,492 60,720 Assets posted as collateral – Digital assets — 278,527 — 278,527 Derivative assets 188,836 18,817 207,653 Embedded derivative – Collateral payable — 55,848 — 55,848 Embedded derivative – Digital assets borrowed — 24,039 — 24,039 Investments (1) 751,220 — 524,573 1,275,793 $ 3,224,772 $ 844,042 $ 605,522 $ 4,674,336 Liabilities Investments sold short $ 6,524 — — $ 6,524 Derivative liabilities 58,155 107,703 165,858 Embedded derivative – Digital assets borrowed 252,635 252,635 Embedded derivative – Collateral payable 161,261 161,261 Embedded derivative – Notes payable — — 136,192 136,192 $ 64,679 $ 521,599 $ 136,192 $ 722,470 __________________ (1) Excludes equity securities measured utilizing net asset value as a practical expedient of $ 304.5 million and equity securities utilizing the measurement alternative of $ 63.2 million as they are without readily determinable fair values. Nonrecurring Fair Value Measurements Impairment losses are recognized for Digital intangible assets carried at the lower of cost or impaired value and Property and equipment, net when their carrying amounts exceed fair value. See Note 13 for additional information on impairment of Property and equipment. The carrying values for Digital intangible assets carried at the lower of cost or impaired value were $ 452.5 million and $ 550.2 million as of March 31, 2025 and December 31, 2024, respectively. The Company categorized the fair value measurements for Property and equipment, net as Level 3. 31 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The following tables summarize changes in assets and liabilities measured and reported at fair value for which Level 3 inputs have been used to determine fair value for the periods ended March 31, 2025 and December 31, 2024, respectively. (in thousands) Assets Fair value, Beginning Balance Purchases Sales/ Distributions Net Realized Gain / (Loss) Net Unrealized Gain / (Loss) Transfers in /(out) of Level 3 Fair value, Ending Balance Digital intangible assets March 31, 2025 $ 20,457 $ — $ — $ — $ ( 3,438 ) $ ( 6,056 ) $ 10,963 December 31, 2024 $ 68,004 $ — $ — $ — $ ( 17,043 ) $ ( 30,504 ) $ 20,457 Digital assets receivable March 31, 2025 $ 60,492 $ 500 $ — $ — $ ( 34,646 ) $ ( 6,884 ) $ 19,462 December 31, 2024 $ 20,569 $ — $ ( 4,727 ) $ 4,724.00 $ 52,477 $ ( 12,551 ) $ 60,492 Investments March 31, 2025 $ 524,573 $ 3,852 $ ( 104,257 ) $ 69,624 $ ( 103,351 ) $ 1,000 $ 391,441 December 31, 2024 $ 364,576 $ 129,188 $ ( 221,564 ) $ 117,036 $ 119,803 $ 15,534 $ 524,573 Embedded derivative - Notes payable March 31, 2025 $ 136,192 $ — $ — $ — $ ( 89,606 ) $ — $ 46,586 December 31, 2024 $ 10,472 $ 93,993 $ — $ — $ 31,727 $ — $ 136,192 Transfers in and out of Level 3 are considered to have occurred at the beginning of the period the transfer occurred. For the period ended March 31, 2025, gross transfers into Level 3 were $ 1.0 million, gross transfers out of Level 3 were $ 12.9 million. The transfers into Level 3 for Investments were due to fair value adjustments determined by unobservable market inputs. Transfers out of Level 3 for Digital asset receivables and Digital assets were due to removal of restrictions. For the year ended December 31, 2024, gross transfers into Level 3 were $ 21.2 million and gross transfers out of Level 3 were $ 48.7 million. The transfers into Level 3 for Investments were due to fair value adjustments determined by unobservable market inputs. The transfers into Level 3 for Digital asset receivables were due to underlying token launches of contracts held. Transfers out of Level 3 for Investments related to a conversion of a convertible note upon emergence from a bankruptcy during the year. Transfers out of Level 3 for Digital asset receivables and Digital assets were due to removal of restrictions. 32 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The following table presents additional information about valuation methodologies and significant unobservable inputs used for assets and liabilities that are measured and reported at fair value and categorized within Level 3 as of March 31, 2025 and December 31, 2024, respectively: Financial Instrument Fair Value at March 31, 2025 (in thousands) Significant Unobservable Inputs Range Weighted Average Digital intangible assets 10,963 Marketability discount 15.7 % - 39.1 % 28.4 % Digital assets receivable 19,642 Marketability discount 2.8 % - 61.8 % 21.1 % Investments 391,441 Time to liquidity event (years) 0.8 - 5.0 4.1 Annualized equity volatility 70.0 % - 90.0 % 88.8 % Risk free rate 3.4 % - 4.4 % 3.9 % Market adjustment discount 30.0 % - 90.0 % 39.7 % Market adjustment premium 25.0 % - 150.0 % 100.5 % Marketability discount 25.0 % - 40.0 % 27.6 % Expected dividend payout ratio — % — % Enterprise value to LTM revenue multiple 2.5 x - 16.8 x 9.5 x Enterprise value to projected revenue 2.0 x - 10.5 x 6.2 x Enterprise value to annualized revenue 2.5 x - 9.0 x 5.8 x Enterprise value to LTM volume 2.8 x 2.8 x Enterprise value to ARR 8.0 x 8.0 x Price to tangible book value 1.3 x 1.3 x Enterprise value to gross profit 6.0 x 6.0 x Scenario probability 35.0 % 35.0 % Recovery percentage 44.0 % 44.0 % Embedded derivative - Notes payable 46,586 Volatility 47.0 % - 77.0 % 56.2 % Risk free rate 3.8 % - 4.0 % 3.9 % Time-step (years) 0.004 0.004 33 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Financial Instrument Fair Value at December 31, 2024 (in thousands) Significant Unobservable Inputs Range Weighted Average Digital intangible assets $ 20,457 Marketability discount 15.9 % - 45.2 % 32.1 % Digital assets receivable $ 60,492 Marketability discount 5.5 % - 72.8 % 35.8 % Investments $ 524,573 Time to liquidity event (years) 1.0 - 5.0 4.1 Annualized equity volatility 70.0 % - 90.0 % 88.8 % Risk free rate 3.4 % - 4.4 % 4.2 % Market adjustment discount 30.0 % - 90.0 % 41.0 % Market adjustment premium 25.0 % - 130.0 % 79.6 % Marketability discount 3.5 % - 51.8 % 26.0 % Expected dividend payout ratio — % — % Enterprise value to LTM revenue multiple 2.5 x - 16.8 x 10.8 x Enterprise value to projected revenue multiple 2.0 x - 10.5 x 7.0 x Enterprise value to annualized revenue 3.5 x - 9.0 x 6.7 x Enterprise value to LTM volume 3.0 x 3.0 x Enterprise Value to ARR 8.5 x - 15.8 x 10.9 x Price to tangible book value 1.5 x 1.5 x Enterprise value to projected EBITDA 9.0 x - 14.0 x 11.5 x Scenario probability 35.0 % 35.0 % Recovery percentage 35.0 % - 61.6 % 51.5 % Embedded derivative - Notes payable $ 136,192 Volatility 45.6 % - 75.0 % 55.4 % Risk free rate 4.2 % - 4.4 % 4.3 % Time-step (years) 0.004 0.004 Increases and/or decreases in the various unobservable inputs used to determine the Level 3 valuations could result in significantly higher or lower fair value measurements. Financial Instruments Not Measured at Fair Value The following table presents the fair value of financial instruments not measured at fair value in the Company’s condensed consolidated interim statements of financial position. This table excludes non-financial assets and liabilities. As of March 31, 2025 (in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 509,438 $ 509,438 $ 509,438 $ — $ — Assets posted as collateral - Cash — — — — — Accounts receivable 28,864 28,864 28,864 — — Loans receivable 464,766 464,766 — 464,766 — Total Assets $ 1,003,068 $ 1,003,068 $ 538,302 $ 464,766 $ — Accounts payable and accrued liabilities 270,468 270,468 270,468 — — Notes payable 763,798 724,856 — 724,856 — Collateral payable — Cash 49,418 49,418 49,418 — Payable to customers — Cash 19,288 19,288 19,288 — Loans payable 345,249 345,249 — 345,249 — Total Liabilities $ 1,448,221 $ 1,409,279 $ 270,468 $ 1,138,811 $ — 34 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) As of December 31, 2024 (in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 462,103 $ 462,103 $ 462,103 $ — $ — Assets posted as collateral - Cash — — — — — Accounts receivable 55,279 55,279 55,279 — — Loans receivable 476,620 476,620 476,620 — Total Assets $ 994,002 $ 994,002 $ 517,382 $ 476,620 $ — Accounts payable and accrued liabilities 281,531 281,531 281,531 — — Notes payable 845,186 836,402 — 836,402 — Collateral payable — Cash 74,995 74,995 — 74,995 — Payable to customers — Cash 19,520 19,520 19,520 — Loans payable 510,718 510,718 — 510,718 — Total Liabilities $ 1,731,950 $ 1,723,166 $ 281,531 $ 1,441,635 $ — 12.  LOANS RECEIVABLE In the general course of business, the Company offers fiat-denominated loans to counterparties in the digital asset industry against digital assets or other collateral. No loans receivable were on nonaccrual status as of March 31, 2025 or December 31, 2024. Loans Receivable, Current and Non-current (in thousands) March 31, 2025 December 31, 2024 Loans receivable $ 408,341 $ 476,620 Loans receivable, non-current 56,800 — Less: allowance for credit loss ( 375 ) — Loans receivable, current and non-current $ 464,766 $ 476,620 The outstanding loans receivable are scheduled to be repaid during the following periods: (in thousands) Amounts 2025 407,966 2026 51,286 2027 1,088 2028 2,938 2029 1,188 2030 300 Loans receivable, current and non-current $ 464,766 Outstanding balances represent loan principal and exclude accrued interest receivable on loans. 35 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Collateral Payable Associated with Loans Receivable, Current and Non-current (in thousands) March 31, 2025 December 31, 2024 Collateral payable - Digital assets $ 578,745 $ 620,633 Collateral payable — Cash $ — $ — Collateral payable associated with loans receivable, current and non-current $ 578,745 $ 620,633 For the three months ended March 31, 2025 and 2024, interest income related to the Company’s Loans receivable was $ 12.6 million and $ 12.6 million, respectively. 13.  PROPERTY AND EQUIPMENT The following table represents property and equipment balances and accumulated depreciation as of the period ended March 31, 2025 and year ended December 31, 2024: (in thousands) March 31, 2025 December 31, 2024 Corporate assets (1) $ 12,150 $ 11,093 Mining equipment 165,942 172,572 Data center infrastructure (2) 105,324 113,710 Land 16,487 12,809 WIP / Construction in progress (3) 125,776 35,777 Property and equipment, gross 425,679 345,961 Less: Accumulated depreciation ( 63,252 ) ( 57,934 ) Less: Impairment / Loss on disposal (4) ( 100,211 ) ( 50,989 ) Property and equipment, net $ 262,216 $ 237,038 __________________ (1) Corporate assets balances primarily relate to computer equipment, leasehold improvements, and furniture and fixtures. (2) Data center infrastructure comprises land and improvements associated with our mining and AI/HPC leasing businesses. (3) As of March 31, 2025 and December 31, 2024, WIP/Construction in progress related to data center infrastructure under construction. (4) Recognized in General and administrative expenses in the Company’s condensed consolidated interim statements of operations. Depreciation expense of $ 8.7 million and $ 6.7 million related to property and equipment for the three months ended March 31, 2025 and March 31, 2024, respectively, is included in General and administrative expenses in the Company’s condensed consolidated interim statements of operations. Impairment of Mining Equipment The Company assesses mining equipment for impairment when a triggering event is identified. As a result of a change of anticipated use of the mining equipment in fiscal year 2025 during the three months ended March 31, 2025, the Company recognized an impairment of $ 49.2 million in relation to its mining equipment, including assets in WIP/Construction in progress, which was applicable to the Treasury and Corporate segment. Impairment testing of assets held for use requires determination of recoverability using unobservable inputs such as estimated future cash flows and involves significant judgment. The Company estimated the future cash flows related to mining equipment using the bitcoin price and network difficulty, as well as expected hosting cost as key inputs. 14.  LEASES Lessee The Company enters into leases primarily for real estate, substantially all of which are used in connection with its operations. 36 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Operating lease costs were $ 1.5 million and $ 1.5 million for the three months ended March 31, 2025 and March 31, 2024, respectively. Variable lease costs, which are included in operating lease costs, were not material for the three months ended March 31, 2025 and March 31, 2024, respectively. Supplemental disclosures for the Company’s condensed consolidated interim statements of cash flows: (in thousands) March 31, 2025 March 31, 2024 Net cash provided by / (used in) operating activities Cash paid in the measurement of operating lease liabilities $ 1,483 $ 1,466 Supplemental statement of financial position and other disclosures related to operating lease right-of-use assets: (in thousands, except lease term and discount rate) March 31, 2025 December 31, 2024 Operating lease right-of-use assets $ 7,283 $ 8,223 Operating lease liabilities 9,221 10,229 Weighted average remaining lease term 3.5 years 3.6 years Weighted average discount rate (1) 10 % 10 % __________________ (1) The weighted average discount rate represents the Company’s incremental borrowing rate. The following table represents future minimum lease payments of the Company’s operating lease liabilities as of March 31, 2025: (in thousands) Lease liability Year ending December 31, 2025 $ 3,530 2026 2,818 2027 2,572 2028 2,572 2029 429 Total future minimum lease payments 11,921 Less: Interest 2,700 Total lease liability $ 9,221 15.  GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table reflects the changes in carrying amount of goodwill: (in thousands) March 31, 2025 December 31, 2024 Balance, beginning of period $ 58,037 $ 44,257 Additions due to acquisitions (Note 3) — 13,780 Balance, end of period $ 58,037 $ 58,037 The Company recognized no impairment of Goodwill for the periods ended March 31, 2025 and March 31, 2024. All goodwill is allocated to the Digital Assets segment. 37 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Other Intangible Assets The following table represents intangible assets and accumulated amortization as March 31, 2025 and December 31, 2024: (in thousands) March 31, 2025 December 31, 2024 Software technology (1) $ 40,508 $ 40,508 Other purchased defined-life intangible assets 13,701 13,701 Indefinite-lived intangible asset 1,761 1,761 Intangible assets, gross 55,970 55,970 Less: Accumulated amortization ( 22,600 ) ( 18,619 ) Intangible assets, net $ 33,370 $ 37,351 _________________ (1) Includes capitalized equity based compensation of $ 3.1 million as of March 31, 2025 and December 31, 2024. The Company estimates that there is no significant residual value related to its finite-life intangible assets. The expected future amortization expense for finite-life intangible assets for the next five years is as follows: (in thousands) Amounts 2025 12,570 2026 8,602 2027 5,676 2028 4,358 2029 and beyond 403 Total future amortization expense $ 31,609 16.  OTHER ASSETS AND ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Prepaid expenses and other assets consist of the following: (in thousands) March 31, 2025 December 31, 2024 Prepaid expenses $ 13,600 $ 11,112 Asset purchase deposits 4,845 4,845 Current tax asset and tax receivable 5,228 5,364 Other (1) 6,211 5,571 $ 29,884 $ 26,892 __________________ (1) Includes receivables related to non-consolidated funds management, advisory activities and tax payments made on behalf of certain related parties. Refer to Note 22 for further information on related party transactions. Accounts payable and accrued liabilities consist of the following: 38 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) (in thousands) March 31, 2025 December 31, 2024 Compensation and compensation related $ 20,490 $ 71,553 Professional fees 7,871 5,684 Promissory note (1) 109,004 96,933 Legal settlement 78,165 40,000 Mining payables and accrued liabilities 1,269 9,385 Payable for digital asset trades 15,028 20,970 Interest 27,169 15,530 Payable for investments and acquisitions 4,447 11,054 Accounts payable 3,713 6,910 Other 3,312 3,512 $ 270,468 $ 281,531 __________________ (1) Promissory note with GDHI LLC. Refer to Note 22 for further information on related party transactions. Other non-current liabilities consist of the following: (in thousands) March 31, 2025 December 31, 2024 Tax liabilities $ 47,463 $ 42,994 Legal settlement 108,151 142,462 Lease liability 6,500 6,936 $ 162,114 $ 192,392 17.  COMMITMENTS AND CONTINGENCIES Leases As of March 31, 2025 and December 31, 2024, the Company had commitments primarily under three subleases. Refer to Note 14 for further information on lease commitments. Investment and Loan Commitments As of March 31, 2025 and December 31, 2024, the Company was obligated to seven portfolio companies, all of which are non-consolidated variable interest entities (VIEs), to fund up to $ 66.5 million and $ 69.0 million, respectively. Subsequent to period ended March 31, 2025, $ 1.1 million of this amount has been funded. Refer to Note 18 for further information on VIEs. As of March 31, 2025 and December 31, 2024 Company had outstanding credit facilities to counterparties and arrangements to finance delayed trading settlement up to three days totaling $ 80.0 million and $ 60.0 million, respectively, and had funded $ 60.0 million and $ 39.9 million in relation to these facilities as of March 31, 2025 and December 31, 2024, respectively. Credit facilities are supported by counterparties’ assets. There were no additional fundings of these facilities subsequent to period end. Contractual Commitments As of March 31, 2025, the Company had an outstanding commitment for the construction of improvements at its Helios facility totaling $ 713.1 million. Indemnifications The Company has provided standard representations for agreements and customary indemnification for claims and legal proceedings. Insurance has been purchased to mitigate certain of these risks. Generally, there are no stated or notional amounts included in these indemnifications and the contingencies triggering the obligation for 39 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) indemnification are not expected to occur. Furthermore, counterparties to these transactions often provide comparable indemnifications. The Company is unable to develop an estimate of the maximum payout under these indemnifications for several reasons. In addition to the lack of a stated or notional amount in a majority of such indemnifications, it is not possible to predict the nature of events that would trigger indemnification or the level of indemnification for a certain event. The Company believes, however, that the possibility of making any material payments for these indemnifications is remote. As of March 31, 2025 and December 31, 2024, there was no liability accrued under these arrangements. Legal and Regulatory Matters In the ordinary course of business, the Company and its subsidiaries and affiliates may be threatened with, named as defendants in, or made parties to pending and potential legal actions, including class actions, arbitrations and other disputes. The Company and its subsidiaries and affiliates are also subject to oversight by numerous regulatory and other governmental agencies and may receive inspection requests, investigative subpoenas and requests from regulators for documents and information, which could lead to enforcement investigations and actions. The Company reviews any lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with its accounting policies. Except as discussed below, the Company does not believe that the ultimate resolution of existing legal and regulatory outstanding matters will have a material effect on our financial condition or liquidity. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results of operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results of operations, potentially materially. SEC Matters: As previously disclosed, in prior years, members of the staff of the SEC’s Division of Enforcement raised whether certain of the digital assets that we trade are securities and therefore such trading activities should be conducted through a registered entity. In addition, the staff of the SEC’s Division of Enforcement also raised whether off-channel communications were appropriately captured. In February 2025, we received termination letters concluding these investigations without charges. Luna Matters: On March 27, 2025, Galaxy reached an agreement with the New York State Attorney General to resolve civil claims relating to certain investments, trading, and public statements made in connection with the LUNA digital asset from late 2020 to 2022. As of March 31, 2025 and December 31, 2024, the Company accrued a legal provision of $ 186 million and $ 182 million, respectively. The accrued amounts include the impact of discounting the estimated cash flows at a rate of approximately 4.3 %. The undiscounted amount of the settlement is $ 200 million and payable between 2025 and 2028, with a payment of $ 40 million in each of 2025 and 2026, and a payment of $ 60 million in each of 2027 and 2028. Under the terms of the settlement, Galaxy also agreed to, among other things, compliance enhancements related to public statements about cryptocurrency and purchases and sales of cryptocurrency. In December 2022, a proposed class action was filed in the Ontario Superior Court of Justice against GDH Ltd., our Chief Executive Officer and our former Chief Financial Officer asserting various claims including alleged misrepresentations relating to our public disclosure regarding investments and trading in the LUNA digital asset. The class action purports to be brought on behalf of a proposed class of persons and entities who acquired our securities on the secondary market from May 17, 2021 to and including May 6, 2022. The class action seeks unspecified damages and various declaratory relief, including leave to proceed with the right of action for misrepresentation under statutory securities provisions. These proceedings are still in early stages and have not been certified to proceed as a class action. Based on the stage of the case, the outcome remains uncertain, and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. Financial Support of GDH Ltd. In accordance with the LPA, the Company will reimburse or pay for all reasonably incurred expenses, excluding taxes, in the conduct of GDH Ltd.'s business. 40 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Tax Distributions The LPA also allows the Company to make distributions, as and when determined by the General Partner, in its sole discretion so as to enable unit holders to pay anticipated taxes with respect to allocated Company taxable income and / or gains. Amounts distributed pursuant to the tax distribution provision are treated as an advance against, and reduce (on a dollar for dollar basis), future amounts that would otherwise be distributable to such limited partners. The LPA provides that the value of any tax distribution made shall not exceed 25 % of the Company’s market capitalization determined at the time the General Partner determines to make such distribution. Tax-related distributions of $ 9.4 million and $ 36.7 million were paid during the three months ended March 31, 2025 and March 31, 2024, respectively. In December 2021, July 2024, and March 2025, the Company contributed approximately $ 523.0 million, $ 20.0 million, and $ 75.0 million, respectively, into wholly-owned subsidiaries through which the Company is operating bitcoin mining and AI / HPC leasing activities and exploring ways to operate other qualified digital assets and blockchain related activities in qualified opportunity zones. Subsequent to March 31, 2025, the Company contributed an additional $ 90.0 million into these same subsidiaries. The qualified opportunity zone program was established by Congress under the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide, and through which taxpayers may defer eligible capital gains provided they meet the program’s requirements. In December 2026, the Company will be required to recognize capital gains on 90 % of the contributed amount for U.S. federal tax purposes, which will be allocated to its unit holders in accordance with their ownership interests at that time. As such depending on facts and circumstances at that time, the Company may be required to make additional tax distributions to its unit holders, including GDH Ltd. 18.  VARIABLE INTEREST ENTITIES The Company holds investments in VIEs that are not consolidated due to either a lack of variable interests or where the Company is not the primary beneficiary. This includes funds which were once controlled but were subsequently deconsolidated due to reduced ownership percentage or other changes. The fair value option was elected for investments in non-consolidated VIEs for which the Company was deemed to have significant influence; therefore, changes in the fair value of these investments are recorded through net income in Net gain / (loss) on investments in the Company’s condensed consolidated interim statements of operations. NAV was utilized as the practical expedient to fair value. See Note 10 for further information. The Company’s involvement in financing operations of the VIEs is limited to its investment in the entity. The Company does not provide performance guarantees and has no other financial obligation to provide funding to VIEs, other than its own capital commitments. The following table illustrates the Company’s maximum exposure to unconsolidated VIEs which is limited to the fair value of its investments and unfunded commitment as of period end. March 31, 2025 December 31, 2024 (in thousands) Fair Value of Investment Unfunded Commitments Maximum Exposure Fair Value of Investment Unfunded Commitments Maximum Exposure Sponsored Investment Funds $ 330,954 $ 54,225 $ 385,179 $ 398,386 $ 56,725 $ 455,111 Other VIE’s 144,577 12,294 156,871 143,145 12,294 155,439 Total $ 475,531 $ 66,519 $ 542,050 $ 541,531 $ 69,019 $ 610,550 19.  LOANS AND NOTES PAYABLE Loans Payable In the ordinary course of business the Company may borrow fiat currency, such as US dollars, to facilitate digital asset trading and lending activity. For the majority of these loans, there is no set repayment term and the 41 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Company can prepay without penalty. (in thousands) March 31, 2025 December 31, 2024 Loans payable $ 345,249 $ 510,718 For the three months ended March 31, 2025 and 2024, interest expense related to the Company’s Loans payable were $ 3.6 million and $ 2.5 million , respectively. Assets Posted as Collateral Associated with Loans Payable (in thousands) March 31, 2025 December 31, 2024 Assets posted as collateral - Digital intangible assets $ 200,679 $ 194,306 Less: Allowance for credit losses ( 633 ) ( 554 ) Assets posted as collateral associated with digital asset loans payable $ 200,046 $ 193,752 Notes Payable GDH LP issued $ 500 million, aggregate principal amount, of 3.00 % exchangeable senior notes (the “2026 Exchangeable Notes”) on December 9, 2021 and $ 402.5 million, aggregate principal amount, of 2.500 % exchangeable senior notes on November 25, 2024 (the “2029 Exchangeable Notes” and, together with the 2026 Exchangeable Notes, the “Exchangeable Notes”). Outstanding 2026 Exchangeable Notes and 2029 Exchangeable Notes will mature and the aggregate principal amount is due in 2026 and 2029, respectively, unless earlier exchanged, redeemed or repurchased. Interest on the Exchangeable Notes is payable semi-annually. There were no origination discounts or premiums associated with the notes. The 2026 Exchangeable Notes had an initial exchange rate of 7,498.2210 ordinary shares per US$ 250,000 principal amount and the 2029 Exchangeable Notes had an initial exchange rate of 10,497.5856 ordinary shares per US$ 250,000 principal amount. All Exchangeable Notes issued are subject to certain selling and transfer restrictions set forth in each investor’s note purchase agreement and as set forth in the indenture that governs the Exchangeable Notes. The Company determined that the conversion features represent derivative financial instruments embedded in the Exchangeable Notes. The conversion feature was recorded at fair value as a discount to the value of the Exchangeable Notes as of inception date. Accordingly, the Company recorded an aggregate discount of $ 71.0 million and $ 94.0 million for the fair value of the derivative liability at inception of the 2026 Exchangeable Notes and the 2029 Exchangeable Notes, respectively. The difference between the proceeds allocated to the convertible instrument at issuance and the fair value of the conversion feature was allocated to the host contract. The Exchangeable Notes and the associated derivative liability are shown as Notes payable in the Company’s condensed consolidated interim statements of financial position. The unamortized debt issuance cost as of March 31, 2025 and December 31, 2024 was $ 17.4 million and $ 18.5 million, respectively. As of March 31, 2025 and December 31, 2024, there was $ 847.5 million in principal outstanding of the Exchangeable Notes. On initial recognition of the 2026 Exchangeable Notes and the 2029 Exchangeable Notes, debt issuance costs of $ 13.4 million and $ 13.6 million, respectively, were recognized as a reduction of Notes payable and are being expensed over the term of the debt. The interest expense from the Exchangeable Notes for the three months ended March 31, 2025 and 2024 was $ 14.1 million and $ 7.0 million, respectively, including coupon interest expense of $ 5.9 million and $ 3.3 million , respectively. The effective interest rates on the 2026 and 2029 Exchangeable Notes are 7.0 % and 9.2 %, respectively. As of March 31, 2025, the Partnership's notes payable repayment obligation is as follows: (in thousands) Amount Due 2025 $ — 2026 445,000 2027 — 42 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) 2028 — 2029 402,500 Total $ 847,500 20.  EQUITY Issued Unit Holders’ Capital GDH LP has two classes of ownership interests, representing limited partner interests: (1) GDH LP Class A Units, which are subdivided into GDH LP A-1 Units, all of which are held by GDH Ltd., and GDH LP A-2 Units, all of which are held indirectly by GDH Ltd., through GDH Ltd.’s wholly owned U.S. subsidiary, GDH Intermediate LLC; and (2) GDH LP Class B Units, all of which are held by GGI, employees of GDH LP as part of the GDH LP employee compensation plan and certain former shareholders. The GDH LP Class A Units and GDH LP Class B Units rank pari passu to all distributions from GDH LP. Under the terms of the LPA, GDH LP Class B Units are exchangeable for GDH Ltd. shares on a one-for-one basis subject to certain limitations and customary adjustments for stock splits, stock dividends and other similar transactions. On receipt of a request to exchange, the Company or the General Partner cancels the Class B Units and causes GDH Ltd. to issue ordinary shares. In addition, GDH LP issues Class A Units to GDH Ltd. for the same amount of ordinary shares issued by GDH Ltd. Alternatively at the election of the General Partner, GDH LP may deliver an amount of cash in lieu of GDH Ltd. shares to an exchanging GDH LP Class B Unit holder. The business of GDH LP is conducted by its General Partner who will be liable for all debts and obligations of the exempted limited partnership to the extent the Company has insufficient assets. As a general matter, a limited partner of GDH LP will not be liable for the debts and obligations of the exempted limited partnership except in narrow circumstances including (i) if such limited partner becomes involved in the conduct of GDH LP’s business and holds himself out as a general partner to third parties or (ii) if such limited partner is obliged pursuant to the Cayman Exempted Limited Partnerships Act to return a distribution made to it where the exempted limited partnership is insolvent and the limited partner has actual knowledge of such insolvency at that time. Issued Capital Class A Units During the three months ended March 31, 2025 and March 31, 2024, the Company issued 485,977 and 254,387 Class A Units, respectively, to GDH Ltd. on exercise of stock options and restricted share units vesting. Ordinary Share Repurchase and Cancellations The Company cancelled 61,040 and 8,234 Class A units during the three months ended March 31, 2025 and March 31, 2024, respectively, primarily in association with withholding obligations on exercised stock options and vested restricted share units. Class B Units For the three months ended March 31, 2025 and March 31, 2024, there were no Class B Units exchanged for ordinary shares of GDH Ltd, respectively. No Class B units were redeemed during the three months ended March 31, 2025 and March 31, 2024. As of March 31, 2025 and December 31, 2024, there were 128,002,717 and 127,577,780 Class A Units outstanding, respectively, and 215,862,343 Class B Units outstanding. 43 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Distributions During the three months ended March 31, 2025 and March 31, 2024 there were tax-related distributions of $ 9.4 million and $ 36.7 million, respectively, made for the purpose of covering unit holders’ tax expense due to 2025 and 2024 taxable income. The majority of the recipients of the tax distributions are related parties. See Note 22 for further information on related party transactions. 21.  EQUITY BASED COMPENSATION Equity Based Compensation For the three months ended March 31, 2025 and March 31, 2024, the total compensation and benefits include cash based payments and equity based payments as follows: Three Months Ended (in thousands) March 31, 2025 March 31, 2024 Compensation and benefits excluding equity based compensation 43,434 42,551 Equity based compensation (1) 13,519 18,520 Total compensation and benefits (2) $ 56,953 $ 61,071 __________________ (1) Excludes Deferred Share Units related to directors which is included in General and administrative expense. (2) Net of capitalized compensation costs related to internally generated intangible assets. The Company has awarded compensatory Class B Units, stock options and restricted stock to eligible officers and employees. For the three months ended March 31, 2025 and March 31, 2024, equity based compensation included the following: Three Months Ended (in thousands) March 31, 2025 March 31, 2024 Stock options $ 4,575 $ 3,597 Restricted Stock (Restricted Stock, Restricted Stock Units and Deferred Share Units) (1) 9,163 14,909 Compensatory Class B Unit Awards Profit Interest Units — 14 $ 13,738 $ 18,520 __________________ (1) Includes expense associated with restricted stock issued in connection with the Company’s acquisition of Vision Hill . Equity Plans The Company has granted stock options to employees, officers, directors and consultants of the Company under the GDH Ltd. stock option plan (the “Plan”), subject to the approval of the board of directors of GDH Ltd. The exercise price of each option was not less than the market price of GDH Ltd.’s shares at the date of grant. Options granted under the Plan had a term not to exceed 5 years and are subject to vesting provisions as determined by the board of directors of GDH Ltd., who administer the Plan. On exercise of an option, the holder will receive one common share in GDH Ltd. and GDH LP will issue one Class A Unit to GDH Ltd. The maximum number of shares reserved for issuance under the Plan was fixed at 45,565,739 shares of GDH Ltd. Following the approval of the Long Term Incentive Plan, the Company no longer makes grants under the Plan and future grants will be made from the Long Term Incentive Plan. The Plan reserve has been rolled over into the Long Term Incentive Plan. Long Term Incentive Plan In May 2021 (subsequently amended and restated in May 2024), the Board of Directors of GDH Ltd. approved the GDH Ltd. Long Term Incentive Plan (“LTIP”) to grant stock options, stock appreciation rights, restricted stock, and share units in the form of restricted share units and/or performance share units to employees, officers, and 44 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) consultants of GDH Ltd. and its affiliates, and deferred share units to non-employee directors of GDH Ltd. and non-employee managers of the Board of Managers of the General Partner. Under the LTIP Plan, the exercise price of each option may not be less than the market price of GDH Ltd.’s shares at the date of grant. Options granted under the LTIP typically have a term not to exceed five years and are subject to vesting provisions as determined by the board of directors of GDH Ltd., who administer the LTIP. On exercise of an option, the holder will receive one common share in GDH Ltd. and GDH LP will issue one Class A Unit to GDH Ltd. The maximum number of shares reserved for issuance under the LTIP is fixed at 48,290,478 shares of GDH Ltd. Non-Treasury Plan In May 2021, the Board of Directors of the Company approved the GDH Ltd. Non-Treasury Share Unit Plan (“Non-Treasury Plan”) as a supplement to the LTIP under which grants are settled solely in cash. Share units are restricted share units or performance share units. Stock Options A summary of the Company’s stock option activity under the plans, including stock options with performance based conditions, is set forth in the following table: Description Number of Options Weighted Average Exercise Price (C$) Weighted-Average Remaining Terms (Years) Aggregate Intrinsic Value (in thousands) Balance, December 31, 2023 22,263,973 $ 6.56 2.98 $ 76,893 Granted 2,913,051 16.66 Exercised ( 3,546,327 ) 3.16 Forfeited ( 1,521,299 ) 6.63 Canceled ( 244,390 ) 11.55 Balance, December 31, 2024 19,865,008 $ 8.58 3.44 $ 230,641 Granted 4,172,899 17.30 Exercised ( 652,549 ) 3.09 Forfeited — — Canceled ( 9,957 ) 6.75 Balance, March 31, 2025 23,375,401 $ 10.28 3.58 $ 233,384 Vested and expected to vest as of March 31, 2025 23,375,401 $ 10.28 3.58 $ 233,384 Options exercisable as of March 31, 2025 12,729,406 $ 7.81 1.82 $ 72,307 Vested and expected to vest as of December 31, 2024 19,865,008 8.58 3.44 $ 230,641 Options exercisable as of December 31, 2024 10,691,460 7.37 1.66 $ 132,653 The weighted average grant date fair value of options granted to employees was $ 7.27 and $ 6.99 per share for the periods ended March 31, 2025 and December 31, 2024, respectively. The total intrinsic value of the 652,549 and 3,546,327 options exercised during the period ended March 31, 2025 and December 31, 2024 was $ 7.9 million and $ 39.9 million, respectively. The intrinsic value is the difference between the estimated fair value of the Company’s units at the time of exercise and the exercise price of the stock option. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of GDH Ltd.’s ordinary shares on March 31, 2025 and the exercise price for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on March 31, 2025. 45 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The fair value of options vested during the periods ended March 31, 2025 and December 31, 2024 was $ 12.1 million and $ 20.3 million, respectively. Modification of Stock Options Previously Granted Effective March 29, 2023, certain outstanding stock option awards were modified reducing the number of options and exercise price. 1,875,000 previously granted options were reduced to 1,500,000 options, and the exercise price of the modified awards was reduced to C$ 6.75 . The incremental fair value of the replacement awards is being recognized over the modified vesting period. The impact to the years ended December 31, 2024 and 2023 was not material. As of March 31, 2025, the total unamortized stock-based compensation expense related to the stock options was $ 58.2 million, which will be recognized over a weighted-average period of approximately 4.2 years. Stock Option Valuation Assumptions The fair value of the options granted was measured using the Black-Scholes option pricing model with the following weighted average inputs: Inputs to the Black-Scholes Model March 31, 2025 December 31, 2024 Share price C$ 15.17 C$ 12.41 - C$ 27.45 Exercise price C$ 16.45 - C$ 22.45 C$ 10.00 - C$ 37.38 Expected term (in years) 5 5 Expected volatility 90 % 85 % - 90 % Risk-free interest rate 2.60 % 2.8 % - 3.8 % Dividend yield 0 % 0 % The assumptions used in the Black-Scholes option pricing model were determined as follows: Share price. The closing price of GDH Ltd. shares on the respective grant dates was used. Expected Term . Full term of the options was used as the expected term. Expected Volatility. In estimating the expected volatility of the underlying stock price, the Company considered historical volatility of GDH Ltd.’s shares, implied volatility from traded options, volatility of comparable companies, and industry indices. Risk-free Interest Rate . The risk-free interest rate was calculated by interpolating government bond yields over the expected terms of the respective option grants. Dividend Yield . GDH Ltd. has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero. The Company has made a policy election to recognize forfeitures of awards as they occur. Compensatory Class B Unit Awards The Company has awarded Class B Unit awards to eligible officers and employees. The Class B Units granted are typically comprised of subtype R units (“Standard Units”) and subtype P units (“Profit Interest Units”). Class B Units typically vest over periods ranging from two to four years and are expensed using the straight-line method over the requisite service period. 46 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The following table summarizes the activity related to the compensatory Class B Units during the respective periods: Description Class B Units Weighted-Average Grant Date Fair Value (C$) Balance, December 31, 2023 10,792,944 1.49 Granted / Transferred — — Exchanged ( 81,357 ) 1.65 Forfeited — — Balance, December 31, 2024 10,711,587 1.49 Granted / Transferred — — Exchanged — — Forfeited — — Balance March 31, 2025 10,711,587 1.49 Class B Units exercisable, March 31, 2025 10,711,587 1.49 Class B Units exercisable, December 31, 2024 10,711,587 $ 1.49 All Class B Units were vested as of December 31, 2024. The fair values of units vested during the period ended December 31, 2024 was $ 0.3 million. Standard Units Valuation Assumptions The fair value of the Standard Units has been determined to be the closing stock price of GDH Ltd. shares on the date of grant. Profits Interest Units Valuation Assumptions The Profit Interest Units receive “catch up” allocations with respect to book income which enable such units to accumulate capital accounts equal to those of Standard Units. Initially, the Profit Interest Units will have a capital account balance of $ 0 , which will be adjusted upon a liquidation or capital event, or when the capital accounts of the GDH LP unit holders are marked to market to reflect the fair value of GDH LP’s assets. Such “catch up” allocations will terminate once the Profit Interest Units have accumulated capital accounts equal to those of other Standard Units. Once a Profit Interest Unit has vested and has been fully “caught up,” such Profit Interest Unit may be exchanged for one share of GDH Ltd. for no additional consideration. The fair value of the Profit Interest Units was estimated using the probability-weighted expected return method. In applying this method, a payoff was determined for a Profit Interest Unit under three potential scenarios, each payoff was weighted by an estimated probability of the corresponding scenario and then the probability-weighted payoffs were discounted to the date of grant and summed. The scenarios, probabilities and other inputs into the model were selected using professional judgment, considering, among other things, the results of a one-period trinomial model, the results of a standard Black-Scholes option pricing model under different assumptions and the estimated fair value of a common share of GDH Ltd. There were no Class B units granted during the period ended March 31, 2025 and December 31, 2024. Restricted Stock On May 19, 2021, the Company granted 845,428 restricted shares as part of the business combination with Vision Hill. The restricted shares vested over approximately 3 years and were expensed using the straight-line method over the requisite service period. All granted restricted shares were fully vested as of June 30, 2024. 47 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) The following table summarizes the activity related to Restricted Stock during the respective periods: Description Number of Units (1) Weighted Average Grant Price (C$) Balance, December 31, 2023 281,808 $ 19.11 Vested ( 281,808 ) 19.11 Forfeited — — Balance, December 31, 2024 — — Vested — — Forfeited — — Balance, March 31, 2025 — — As of March 31, 2025 and December 31, 2024, there was no unamortized stock-based compensation expense related to unvested restricted stock. Restricted Share Units Restricted share units vest over approximately 3 - 4 years and are expensed using the straight-line method over the requisite service period. The Company accounts for forfeitures as they occur. The following table summarizes the activity related to Restricted Share Units during the respective periods: Description Number of Units (1) Weighted Average Grant Price (C$) Balance, December 31, 2023 11,203,624 14.36 Granted (1) 3,439,035 14.85 Exercised ( 3,668,309 ) 15.44 Forfeited / Cancelled ( 964,777 ) 14.17 Balance, December 31, 2024 10,009,573 14.15 Granted 1,898,442 15.17 Exercised ( 158,114 ) 15.46 Forfeited / Cancelled ( 165,986 ) 17.35 Balance, March 31, 2025 11,583,915 14.25 Units vested as of March 31, 2025 4,541,399 16.46 Units vested as of December 31, 2024 4,066,372 15.07 __________________ (1) Includes deferred share units granted to the directors as part of annual compensation. As of March 31, 2025, there was $ 54.4 million of unamortized stock-based compensation expense related to unvested restricted share units, which is expected to be recognized over a weighted average period of 2.29 years. During the three months ended March 31, 2025 and March 31, 2024, the Company granted 125,691 and 124,835 restricted share units, respectively, under the Non-Treasury Share Unit Plan which will be settled in cash. The restricted share units vest over three to four years with varying vesting schedules and had a fair value of $ 1.4 million and $ 1.2 million at grant date, respectively. The outstanding liability related to cash settled units as of March 31, 2025 and December 31, 2024 was $ 6.9 million and $ 10.2 million, respectively. 48 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) During the three months ended March 31, 2025, and March 31, 2024, the Company granted 92,089 and 215,498 Stock Appreciation Rights ("SARs"), respectively, under the LTIP which will be settled in cash. The SARs vest over three years and had a weighted average grant date fair value of $ 0.7 million and $ 1.4 million, respectively. The outstanding liability as of March 31, 2025 and December 31, 2024 related to the SARs was $ 1.1 million and $ 1.7 million, respectively. 22.  RELATED PARTY TRANSACTIONS The Company’s related parties include entities over which it exercises significant influence and its key management personnel. Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Distributions During the three months ended March 31, 2025 and March 31, 2024, there were tax-related distributions paid of $ 9.4 million and $ 36.7 million, respectively. A majority of the recipients of the distributions were related parties. Investments in Galaxy Funds Our directors and executive officers are generally permitted to invest their own capital (or capital of estate planning vehicles controlled by them or their immediate family members) directly in our funds and affiliated entities. In general, such investments are not subject to management fees, and in certain instances may not be subject to performance fees. The fair value of such investments aggregated to $ 13.1 million and $ 12.9 million as of March 31, 2025 and December 31, 2024, respectively. Transactions with GDH Ltd. In accordance with the LPA, the Company will reimburse or pay for all reimbursable expenses of GDH Ltd. For the three months ended March 31, 2025 and March 31, 2024, the Company paid or accrued $ 0.9 million and $ 0.5 million, respectively, on behalf of GDH Ltd., which has been included in General and administrative expenses on the Company’s condensed consolidated statements of operations. The Company has also provided a financial guarantee to a subsidiary of GDH Ltd. sufficient to cover its costs and obligations as they come due through December 31, 2025. The Company has not paid or accrued any amount under this financial guarantee for the periods ended March 31, 2025 or March 31, 2024. On April 14, 2022 the Company entered into a Promissory Note (amended and restated in November 2023 and December 2024, the “Promissory Note”) with GDH Intermediate LLC (“GDHI LLC”), a subsidiary of GDH Ltd. Under the terms of the Promissory Note, the Company can request that GDHI LLC make advances to the Company from time to time, fulfillment of which is in GDHI LLC’s sole and absolute discretion. As of March 31, 2025 and December 31, 2024, GDHI LLC had advanced $ 109.0 million and $ 96.9 million, to the Company, respectively. Under the terms of the Promissory Note, interest accrues on any outstanding advances at a market rate. Interest is payable semi-annually in arrears on June 30 and December 31 of each year, commencing on December 31, 2022, subject to the right of GDHI LLC to elect that the amount of any such interest payment be capitalized and increase the principal amount of the Promissory Note in lieu of being paid in cash. As of March 31, 2025 and December 31, 2024, the interest payable on the Promissory Note was $ 2.2 million and $ 0 , respectively. The Promissory Note may be recalled in whole or in part by GDHI LLC at any time during the term of the note. Otherwise it will mature, and the principal amount of all outstanding advances, plus any accrued and unpaid interest, will be due and payable on December 31, 2025, unless extended by GDHI LLC. As at March 31, 2025 and December 31, 2024, the Company had $ 107.8 million and $ 95.8 million, respectively, in net payables to GDH Ltd. primarily for the aforementioned Promissory Note partially offset by receivables for stock option exercises and withholding tax associated with restricted share units vesting. The Company’s CEO served as co-chairman of the board for Candy Digital Inc. in which the Company made an investment during 2021 resulting in the two entities becoming related parties. Candy Digital Inc. was acquired by Futureverse in April 2025. The Company’s CEO no longer holds a seat on the board following the acquisition. A 49 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) family member of the CEO also holds a position with this company. As at March 31, 2025 and December 31, 2024 the Company’s investment in Candy Digital Inc. was valued at $ 8.8 million and $ 9.1 million, respectively. Galaxy Interactive Fund I, LP, a non-consolidated sponsored investment fund, also held an investment in the company valued at $ 1.0 million as at March 31, 2025 and December 31, 2024. The Company has sub-advisory arrangements with a beneficial owner of GDH Ltd.. Such sub-advisory arrangements have been entered into with, or advised by, Galaxy Digital Capital Management LP, a consolidated subsidiary of the Company, in its capacity as an investment advisor registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). For the three months ended March 31, 2025 and March 31, 2024, the associated advisory fees were $ 0.6 million and $ 0.5 million, respectively. The CEO of the Company, through an entity which he controls, owns a private aircraft that the Company uses for business purposes in the ordinary course of operations, on terms that are advantageous to the Company. The CEO paid for the purchase of this aircraft with his personal funds and has borne all operating, personnel and maintenance costs associated with its operation and use. During the three months ended March 31, 2025 and March 31, 2024, the Company incurred $ 0.1 million and $ 0.1 million, respectively, for such use negotiated on an arms-length basis in compliance with our aviation matters policy adopted in August 2022. In addition, we have from time to time made use of the CEO’s private boat to host corporate meetings and for other business purposes in the ordinary course of the Company’s operations, on terms that are advantageous to us. The CEO paid for the purchase of this boat with his personal funds and has borne most of the operating, personnel and maintenance costs associated with its operation and use; while the Company paid for the cost of any food and beverage consumption and a portion of operating fees. The expense incurred in relation to this boat was immaterial during the three months ended March 31, 2025 and March 31, 2024. In connection with the receipt of surety bonds for the purpose of a state money transmission licenses on behalf of a subsidiary of the Company, GGI agreed to act as indemnitor, along with the Company, at the request of the insurers. The Company was liable to GGI for fees of $ 0.4 million for the indemnity through March 31, 2025, which was calculated as 1% of the aggregate notional amount of the surety bonds held on behalf of the subsidiary. The Company will continue to incur fees due to GGI of 1% for the duration of these outstanding surety bonds which are renewed annually. Prior to joining GDH Ltd.’s board in September 2021, the chairman of GDH Ltd.’s board entered into a consulting agreement with the Company in April 2021. Under the terms of the consulting agreement, the chairman was engaged to provide professional services to the Company for a period of three years beginning on September 1, 2021. In 2021, the chairman received 1,500,000 RSUs and 500,000 options under the LTIP in connection with the consulting agreement. The equity based compensation expense related to this grant for the three months ended March 31, 2025 and March 31, 2024 was $ 0 and $ 3.0 million, respectively. This consulting agreement has expired as of September 1, 2024. In February 2023, the Company entered into a consulting agreement with a board member of GDH Ltd. The Company paid $ 0 and $ 0.2 million under this agreement during the three months ended March 31, 2025 and March 31, 2024, respectively. This consulting agreement expired as of December 31, 2024. As of March 31, 2025 and December 31, 2024, the Company had recorded $ 4.8 million of tax payments made on behalf of certain related parties. 23.  REPORTABLE SEGMENTS The Company manages and reports its activities in the following operating businesses: Digital Assets and Data Centers. In the first quarter of 2025, the Company began managing and reporting activities in these two operating segments consistent with changes in our operations and management reporting. In determining the Company’s segment structure, the Company considered the basis on which the chief operating decision maker (“CODM”), as well as other members of senior management, review the financial and operational performance of the Company. The Company’s CODM is its chief executive officer. The CODM primarily relies on segment operating income and net income after taxes to evaluate the performance of each reportable segment. In accordance with ASC 280, 50 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Segment Reporting , the Company has recast its historical segment information to conform to the current segment structure. Digital Assets The Digital Assets segment is comprised of the Company's counterparty trading activities, lending, advisory and capital market activities, validator staking services, the Company’s asset management business which manages investments in the digital asset ecosystem both on behalf of the Company and external limited partners, and the GK8 self-custody technology business. The Digital Assets segment generates revenue from digital assets sales, fee income, blockchain rewards and lending. It includes realized and unrealized gains and losses on certain digital assets and equity investments. The Digital Assets segment also incurs the portion of the Company’s interest expense used to fund its trading and lending activities and incurs the majority of digital assets sales costs. Management fees generated off the Company's principal investments and fees generated from staking the Company’s proprietary digital assets are eliminated in the Treasury and Corporate segment. Data Centers The Data Centers segment comprises the Helios infrastructure assets. Our Data Centers segment develops, and will in the future operate, HPC infrastructure to meet the growing demand for large-scale, power-ready facilities in the AI/HPC industry. Treasury and Corporate The Treasury and Corporate segment includes the Company’s proprietary trading and mining activities, as well as the Company’s principal investments. It includes realized and unrealized gains and losses on the majority of the Company’s digital assets and equity investments. The Company’s unallocated corporate overhead, other unallocated costs not identifiable to any of the other reportable segments, and eliminations of inter-segment transactions as required for consolidation. Transactions between segments are based on specific criteria or approximate market rates for comparable services. The Company’s chief operating decision maker reviews compensation expenses separately from other segment items, which include transaction expenses, general and administrative expenses, technology and marketing costs, as well as professional fees. Assets and liabilities by each of the reportable segments as of March 31, 2025 are as follows: (in thousands) Digital Assets Data Centers Treasury and Corporate Totals Total assets $ 3,169,254 $ 264,600 $ 2,902,338 $ 6,336,192 Total liabilities $ 2,691,823 $ — $ 1,742,725 $ 4,434,548 Assets and liabilities by each of the reportable segments as of December 31, 2024 were as follows (unaudited): (in thousands) Digital Assets Data Centers Treasury and Corporate Totals Total assets $ 3,723,814 $ 199,694 $ 3,196,347 $ 7,119,855 Total liabilities $ 3,163,499 $ — $ 1,762,004 $ 4,925,503 51 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Income and expenses by each of the reportable segments for the three months ended March 31, 2025 is as follows: (in thousands) Digital Assets Data Centers Treasury and Corporate Totals Revenues $ 12,971,529 $ — $ 4,677 $ 12,976,206 Net gain / (loss) on digital assets 52,204 — ( 70,427 ) ( 18,223 ) Net gain / (loss) on investments ( 20,349 ) — ( 112,818 ) ( 133,167 ) Net gain / (loss) on derivatives trading 60,515 — ( 29,456 ) 31,059 Revenues and gains / (losses) from operations 13,063,899 — ( 208,024 ) 12,855,875 Transaction expenses 12,999,168 — 60,271 13,059,439 Compensation and benefits 38,826 1,263 16,864 56,953 Notes interest expense — — 14,071 14,071 Depreciation and amortization 3,555 1,251 8,785 13,591 Other expenses 18,821 385 84,437 103,643 Operating expenses 13,060,370 2,899 184,428 13,247,697 Operating income 3,529 ( 2,899 ) ( 392,452 ) ( 391,822 ) Unrealized gain / (loss) on notes payable – derivative — — 89,606 89,606 Other income / (expense), net — — 672 672 Total other income / (expense) — — 90,278 90,278 Net income / (loss) for the period, before taxes $ 3,529 $ ( 2,899 ) $ ( 302,174 ) $ ( 301,544 ) Income tax benefit — — ( 6,112 ) ( 6,112 ) Net income / (loss) for the period $ 3,529 $ ( 2,899 ) $ ( 296,062 ) $ ( 295,432 ) 52 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Income and expenses by each of the reportable segments for the three months ended March 31, 2024 is as follows (unaudited): (in thousands) Digital Assets Data Centers Treasury and Corporate Totals Revenues $ 9,302,569 $ — $ 32,803 $ 9,335,372 Net gain/ (loss) on digital assets 82,590 — 263,803 346,393 Net gain / (loss) on investments — — 63,018 63,018 Net gain / (loss) on derivatives trading ( 15,632 ) — 99,272 83,640 Revenues and gains / (losses) from operations 9,369,527 — 458,896 9,828,423 Transaction expenses 9,272,125 — 41,491 9,313,616 Compensation and benefits 42,275 — 18,796 61,071 Notes interest expense — — 6,976 6,976 Depreciation and amortization 1,307 1,674 6,519 9,500 Other expenses 14,050 — 16,256 30,306 Operating expenses 9,329,757 1,674 90,038 9,421,469 Operating income 39,770 ( 1,674 ) 368,858 406,954 Unrealized loss on notes payable - derivative — — ( 9,713 ) ( 9,713 ) Other income / (expense), net — — 213 213 Total other income / (expense) — — ( 9,500 ) ( 9,500 ) Net income / (loss) for the year, before taxes $ 39,770 $ ( 1,674 ) $ 359,358 $ 397,454 Income tax expense (benefit) — — 9,327 9,327 Net income / (loss) for the period $ 39,770 $ ( 1,674 ) $ 350,031 $ 388,127 24.  RISKS AND UNCERTAINTIES The Company’s digital assets activities may expose it to a variety of financial and other risks: credit risk, interest rate risk, liquidity risk, market risk, loss of access risk, irrevocability of transactions, hard fork and airdrop risks and regulatory oversight risk, among others. The Company lends digital assets to third parties. On termination of a loan, the borrower is required to return the digital assets to the Company; any gains or loss in the market price during the loan would inure to the Company. In the event of bankruptcy of the borrower, the Company could experience delays in recovering its digital assets. In addition, to the extent that the value of the digital assets increases during the term of the loan, the value of the digital assets may exceed the value of collateral provided to the Company, exposing the Company to credit risks with respect to the borrower and potentially exposing the Company to a loss of the difference between the value of the digital assets and the value of the collateral. If a borrower defaults under its obligations with respect to a loan of digital assets, including by failing to deliver additional collateral when required or by failing to return the digital assets upon the termination of the loan, the Company may expend significant resources and incur significant expenses in connection with efforts to enforce the loan agreement, which may ultimately be unsuccessful. The Company also participates in decentralized finance protocols, smart contracts that perform specific functions. Decentralized finance protocols allow the Company to provide or access liquidity, as well as exchange digital assets directly, on the blockchain. The Company deposits or transfers its digital assets to the smart contracts of these decentralized finance protocols and typically receives protocol-specific digital assets that represent the 53 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) Company’s claims on the underlying digital assets. The Company’s transactions with such decentralized finance protocols rely on the functions of open source smart contracts, which are not developed by the Company and could be subject to exploits. The Company mitigates this smart contract risk through review of smart contract audits, as well as other risk management strategies that prevent concentration in or over-reliance on any individual decentralized finance protocol. Additionally, as transactions on decentralized protocols may occur without a centralized authority, the Company has implemented processes to monitor and review the digital asset wallets that interact with decentralized protocols in which the Company participates. As of March 31, 2025, five protoco ls, Coinbase wrapped bitcoin, Aave, Pendle, Kamino, and Lombard represented 70 % of the Company’s digital assets associated with decentralized finance protocols. As of December 31, 2024, four protocols, Maker DAO / Sky DAO, Coinbase wrapped bitcoin, Aave, and Pendle, represented 77 % of the Company’s digital assets associated with decentralized finance protocols balance. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, and loans receivable. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. The Company held $ 152.8 million and $ 19.7 million of cash at brokers and $ 16.8 million and $ 64.7 million of cash on trading platforms as of March 31, 2025 and December 31, 2024, respectively. The Company routinely assesses the financial strength of its customers and maintains allowances for anticipated losses. As of March 31, 2025 and December 31, 2024 no individual customer accounted for 10% or more of net accounts receivable. During the three months ended March 31, 2025, two digital asset trading platforms accounted for 43 % of revenue ; and during the three months ended March 31, 2024 one digital asset trading platform accounted for 41 % of revenue. As of March 31, 2025 and December 31, 2024, two counterparties and their related parties accounted for 38 % and 27 %, respectively, of the Company’s Loans receivable and Digital assets loan receivable balance. The Company is also subject to liquidity and concentration risk related to its short-term loans payable. The loans are callable on demand by the counterparties and are collateralized by the Company’s cash, investment securities, and digital assets held in the Company’s trading accounts at counterparties’ trading platforms. As of March 31, 2025, no individual counterparty accounted for greater than 5% of current liabilities. As of December 31, 2024, one individual counterparty accounted for greater than 5% of the Company's total current liabilities at 8.5 %. The proceeds from these loans are utilized for trading activities. The Company conducts digital asset trades using both direct principal to principal transactions with counterparties and through centralized or decentralized digital asset trading platforms. Digital assets held on trading platforms are subject to the operational control of the platform operators, and could potentially be lost or impaired due to fraud or negligence of the platform operators. The Company mitigates this risk by performing regular reviews of each digital asset trading platform it transacts on, distributing its digital assets across multiple different trading platforms to reduce concentration risk, and holding assets in self-custody where appropriate. As of March 31, 2025 and December 31, 2024, approximately 43 % and 22 %, respectively, of the Company’s digital assets were held with third parties, including centralized trading platforms or posted with counterparties. Two centralized digital asset trading platforms held more than 10% o f the Company’s digital assets as of March 31, 2025, holding approximately 28 % including posted collateral over which the Company maintains control. No centralized digital asset trading platform held more than 10% o f the Company’s digital assets as of December 31, 2024. The Company operates a bitcoin mining business. The Company operates its own mining facility and utilizes third party hosting providers. The facilities are subject to operational risks including managing power costs and maintaining uptime, some of which are outside of the Company’s control. The regulatory environment related to digital assets is complex, evolving, and uncertain, requiring the Company to allocate resources in legal, accounting, compliance, technology, and other functions which impact the Company’s consolidated financial statements. Future regulatory rules adopted domestically and internationally may impose obligations and restrictions on how the Company manages to conduct its business activities in the future. The Company seeks to minimize potential adverse effects of these risks on performance by employing experienced personnel; daily monitoring of the Company’s investments, digital assets and market events; and 54 Galaxy Digital Holdings LP Notes to the Condensed Consolidated Interim Financial Statements (Expressed in US Dollars—unaudited) diversifying the Company’s business strategy as well as its investment portfolio within the constraints of the Company’s investment objectives. 25.  INCOME TAXES The Company’s provision for income taxes reflects a benefit of $ 6.1 million and expense of $ 9.3 million for the three months ended March 31, 2025 and 2024, respectively. These amounts reflect effective tax rates of 2.04 % and 2.35 % for the three months ended March 31, 2025 and 2024, respectively. The effective income tax rate of 2.04 % f or the three months ended March 31, 2025 was generally higher than the Cayman Island statutory rate of 0.0% due to the entity level Unincorporated Business Tax (“UBT”) imposed by New York City and higher tax rates in certain jurisdictions where the Company’s foreign corporate subsidiaries operate. The effective income tax rate for the three months ended March 31, 2025 of 2.04 % was generally lower than the effective income tax rate for the three months ended March 31, 2024 of 2.35 % , primarily due to changes in the jurisdictional mix of earnings. The Company recognizes the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. There were no significant changes to the Company’s uncertain tax positions for the three months ended March 31, 2025. Neither the Company, nor any of its foreign corporate subsidiaries, are subject to an income tax examination in any jurisdiction in which they operate for any years prior to 2019. 26.  SUBSEQUENT EVENTS On April 1, 2025, a subsidiary of GDH LP and CoreWeave, Inc. entered into a phase II option agreement pursuant to the existing lease agreement between the parties, under which CoreWeave has committed to enter into a lease agreement for the uptake of additional 260 MW of critical IT load at the Helios campus on substantially similar economic terms as the phase I lease agreement executed in March 2025. Effective May 13, 2025, Galaxy Digital Inc. (“GDI”), GDHL and GDH LP consummated a series of transactions resulting in the reorganization of Galaxy’s corporate structure (the “Reorganization Transactions”). Under the terms of the Reorganization Transactions, GDHL and GDH LP changed their jurisdiction of incorporation from the Cayman Islands to the state of Delaware, and GDI has become the successor public company of GDHL, with all outstanding GDHL ordinary shares becoming Class A common stock of GDI. 55 Table of Contents Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated interim financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. The following discussion includes forward-looking statements that reflect our plans, estimates and assumptions and involves numerous risks and uncertainties, including, but not limited to, those described in “Risk Factors.” See “Special Note Regarding Forward-Looking Statements.” Future results could differ significantly from the historical results presented in this section. Overview Galaxy is a global leader in digital assets and data center infrastructure, delivering solutions that accelerate progress in finance and AI. We are strategically positioned to bridge traditional finance and the emerging digital economy, facilitating efficient access and adoption of digital assets by institutional clients through our Global Markets and Asset Management & Infrastructure Solutions businesses within our Digital Assets segment. We also develop, and will in the future operate, HPC data center infrastructure to meet the rising global demand for reliable power and scalable compute capacity driven by accelerated AI growth. Our Digital Assets operating business segment provides new products and capabilities such as staking, margin-based financing and active exchange-traded-funds. Galaxy is a trusted partner to more than 1,300 t rading counterparties and more than 1,200 a sset management clients, with approximately $7.0 billion in assets managed across our platform as of March 31, 2025. As of the same period, we have made more than 300 venture portfolio investments into leading digital asset companies and networks that are innovating at the intersection of capital markets and finance. Our institutional-grade products, strong risk management, and leading position have made us the partner of choice for both crypto-native and incumbent financial leaders. Our Data Centers operating business segment develops, and will in the future operate, HPC infrastructure to meet the growing demand for large-scale, power-ready facilities. Galaxy’s Helios data center campus, located in the panhandle region of West Texas, is developing 133 megawatts (“MW”) of critical IT load, utilizing approximately 200 MW of gross power capacity, for CoreWeave. In April 2025, CoreWeave exercised and entered into its first option with Galaxy pursuant to a Phase II option agreement (the “Phase II Option Agreement”), under which CoreWeave committed to enter into a lease agreement for the uptake of an additional 260 MW of incremental critical IT load, which is expected to increase CoreWeave’s contracted capacity at the Helios data center campus to 393 MW of critical IT load by 2027. The retrofit of Helios will be completed in phases, with the full 133 MW of initial critical IT load expected to be delivered by the end of the first half of 2026. CoreWeave has developed market-leading expertise in designing data centers for AI/HPC use that makes them an ideal partner in executing the upgrades at our Helios campus. Prior to the start of 2025, we had six main power transformers installed at our project substation, enabling us to deliver the full 800 MW of high-voltage capacity for which we are already fully approved from ERCOT. In 2024, we built a freshwater pond with storage capacity of nearly 10 million gallons, to efficiently expand our cooling capabilities. Helios has attracted interest in long-term lease agreements from cloud service providers given its attractive HPC attributes. Financial and Operational Highlights • Galaxy generated Net loss of $295.4 million for the three months ended March 31, 2025, compared to Net income of $388.1 million for the three months ended March 31, 2024. • Equity as of March 31, 2025 was $1.9 billion, a decrease of 13% from $2.2 billion as of December 31, 2024. • In March 2025, Galaxy entered into a 15-year agreement (the “Lease Agreement”) with CoreWeave to host its high-performance computing and artificial intelligence infrastructure and deliver 133 MW of critical IT load, utilizing 200 MW of gross power capacity, at its Helios data center campus in the panhandle region of West Texas. In April 2025, Galaxy and CoreWeave entered into the Phase II Option Agreement under which CoreWeave has committed to enter into a lease agreement for the uptake of an additional 260 MW of critical IT load at the Helios campus starting in 2027. • On May 13, 2025, GDI, GDHL and GDH LP consummated a series of transactions resulting in the reorganization of Galaxy’s corporate structure (the “Reorganization Transactions”). Under the terms of the Reorganization Transactions, GDHL and GDH LP changed their jurisdiction of incorporation from the Cayman Islands to the state of Delaware. GDI became the successor public company of GDHL, pursuant to which all outstanding ordinary shares of GDHL were exchanged into shares of Class A common stock of GDI on a one-to-one basis. In 56 Table of Contents addition, Galaxy’s corporate and capital structure has been reorganized so as to normalize it on the basis of frequently used Up-C structures in the U.S. The purpose and business reasons for the Reorganization Transactions included: • an expectation of enhanced shareholder value through increased access to U.S. capital markets, improved flexibility for future equity and debt capital market needs, and an increased profile for Galaxy in the U.S.; • normalization of Galaxy’s corporate and capital structure; • facilitation of any future acquisitions; and • simplification of the equity structure and alignment of all stakeholders’ interests at the GDI level. HPC Hosting The rise of large language models has been transformative. It has democratized access to powerful machine learning tools, enabling institutions of all sizes to integrate AI into their platforms and operations, without the need for vast and expensive engineering resources. These models are fueling gains in efficiency, decision-making and innovation across sectors, from enhancing customer service to streamlining enterprise workflows. This acceleration in AI is creating unprecedented demand for AI/HPC data centers, which serve as the critical infrastructure behind AI-driven technologies. According to a report published by McKinsey & Company, global demand for data center capacity is expected to rise at a rate between 19% to 22% annually from 2023 to 2030. This is driving substantial investment by cloud service providers for new data centers, with data center capital expenditures projected to grow to approximately $800 billion in 2028. However, many existing data centers are increasingly unable to meet these demands, constrained by limited power capacity and long construction timelines of three to five years for new facilities. Further, there has been a recent surge in connection requests for facilities ranging from 300 MW to 1,000 MW or more, which is straining the capacity of local utility grids to deliver power at this accelerated pace. This is leading to prolonged interconnection and construction timelines––now stretching two to four years––further compounding the challenge of scaling AI infrastructure at the pace required. In March 2025, Galaxy entered into the Lease Agreement. As part of the agreement, Galaxy will deliver 133 MW of critical IT load to host CoreWeave’s AI and HPC infrastructure at our Helios data center campus. In April 2025, CoreWeave exercised its first option with Galaxy, and Galaxy and CoreWeave entered into the Phase II Option Agreement, under which CoreWeave has committed to enter into a lease agreement for the uptake of an additional 260 MW of critical IT load at the Helios campus starting in 2027. Our Businesses As of the first quarter of 2025, GDH LP began managing and reporting its activities in the following segments: Digital Assets, Data Centers, and Treasury and Corporate. Prior periods are presented on a comparable basis. Refer to Note 23 of GDH LP's consolidated financial statements for further information on reportable segments. Digital Assets Galaxy’s Digital Assets operating business segment provides a comprehensive and evolving suite of financial products and services tailored for institutions seeking exposure to the digital asset ecosystem. This segment includes our Global Markets and Asset Management & Infrastructure Solutions businesses. Our Global Markets business provides over-the-counter (“OTC”) spot and derivatives trading, lending, and structured products, as well as transaction advisory and equity and debt capital markets services. Our client base includes more than 1,300 trading counterparties globally as of March 31, 2025, including asset managers, hedge funds, family offices, Qualified Individuals 1 and corporations. • Galaxy’s trading business includes electronic OTC, high-touch OTC, derivatives trading, and lending. The electronic and high-touch OTC businesses operate on a principal basis, providing liquidity in digital assets to institutional clients and Qualified Individuals. In our electronic OTC business, trading is facilitated through API 1 “Qualified Individuals” are Eligible Contract Participants, as defined by the Commodities Exchange Act, knowledgeable employees of Galaxy and accredited investors, who are usually high net worth individuals. 57 Table of Contents connectivity. Our high-touch OTC offering mirrors the electronic desk in strategy and risk management, but operates primarily through chat-based channels. The desk utilizes a blend of interna l a nd third-party platforms to access liquidity and manage risk, with 24/7 coverage to support client engagement and execution. The derivatives trading business offers liquidity in options and forwards to institutional counterparties, with trading activity spanning both OTC and exchange-listed and cleared products. • Our investment banking business provides strategic and transaction advisory services focused on the digital assets sector. The team assists clients with growth strategy, mergers and acquisitions, capital formation, and other financial transactions. Leveraging deep industry knowledge and a strong global network, Galaxy connects innovative companies with institutional investors and delivers customized solutions to support growth, liquidity, and long-term value creation in the digital economy. Our Asset Management & Infrastructure Solutions business encompasses our investment management division and blockchain infrastructure products and services, with approximately $7.0 billion in assets across the platform as of March 31, 2025. • Our asset management business manages a diverse suite of exchange-traded funds (“ETFs”) and alternatives strategies, taking the investing DNA that has been core to Galaxy since our founding and externalizing it for institutional allocators and Qualified Individuals. • Galaxy’s Asset Management ETFs include a suite of passive and active products developed in partnership with leading asset managers in the U.S., Brazil, Canada, and Europe. Galaxy’s Asset Management passive ETFs feature regulated, spot digital asset ETFs, while its active ETFs provide exposure to digital assets and other disruptive technologies. Galaxy’s Asset Management alternative investment strategies encompass actively managed long-biased and long-short funds, and a venture franchise. Galaxy Asset Management offers a Liquid Crypto Fund designed to provide access to both core and next generation digital assets and an Absolute Return Fund, launched in 2025, which employs a multi-asset strategy with long and short positions across the digital asset ecosystem and adjacent disruptive technologies. Galaxy Asset Management’s venture franchise includes Galaxy Interactive, which invests at the intersection of content, technology and social commerce, with a focus on video games and the infrastructure powering immersive virtual worlds. Additionally, our inaugural crypto venture fund targets early-stage investments in protocols, software infrastructure, and financialized applications. The venture franchise also features two global, multi-manager venture funds and manages a subset of Galaxy’s balance sheet venture investments. • Galaxy managed $4.7 billion in assets across more than 15 investment strategies as of March 31, 2025, a 40% decrease year-over-year and 18% decrease quarter-over-quarter. $421.0 million of the $4.7 billion of assets under management (“AUM”) represented engagements managed by Galaxy’s asset management team to unwind portfolios on behalf of the estate of FTX. Excluding these opportunistic assets, Galaxy Asset Management’s AUM decreased by 3% year-over-year to $4.2 billion as of March 31, 2025, driven by $0.1 billion of net market depreciation and $1.3 billion of gross outflows partially offset by $1.3 billion of gross inflows and decreased 18% quarter-over-quarter as of March 31, 2025, driven by $0.4 billion of gross outflows and $0.7 billion of net market depreciation partially offset by $0.3 billion of gross inflows. • Our Infrastructure Solutions business includes blockchain-centric technology and infrastructure including staking, tokenization and custodial technology. • Our staking business operates validator nodes to secure blockchains and enable our institutional clients to earn staking rewards, use staked assets as collateral for loans and participate in an increasingly on-chain and decentralized future. Galaxy provides validator services to nine different blockchain networks, such as Ethereum and Solana. As part of our broader suite of infrastructure solutions, we offer secure, institutional-grade cold and hot wallet technology for institutions seeking to self-custody their assets, along with integrated tokenization capabilities. • Galaxy reported assets under stake (“AUS”) of approximately $2.3 billion as of March 31, 2025 as compared to AUS of approximately $4.2 billion as of December 31, 2024. Data Centers Our Data Centers operating business segment develops, and will in the future operate, HPC infrastructure to meet the growing demand for large-scale, power-ready facilities in the AI/HPC industry. Galaxy’s Helios data center campus, located in the panhandle region of West Texas, is developing 133 MW of critical IT load, utilizing approximately 200 MW 58 Table of Contents of gross power capacity, for CoreWeave. The retrofit of Helios will be completed in phases, with the full 133 MW of critical IT load expected to be delivered by the end of the first half of 2026. We have also received approval from ERCOT for an additional 600 MW of gross power capacity at our Helios campus, which will support the committed incremental 260 MW under the Phase II Option Agreement with CoreWeave, and is expected to be delivered starting in 2027. Treasury and Corporate In addition to our two operating business segments, Galaxy manages a diversified portfolio of digital assets, venture, private equity, and fund investments on its balance sheet, and also conducts bitcoin mining operations, all of which are reported within the Treasury and Corporate segment. Treasury engages in proprietary quantitative, arbitrage and macro trading strategies. Our Material Challenges, Obstacles and Risks We are operating in new industries that are highly innovative, rapidly evolving and characterized by healthy competition, experimentation, changing customer needs, and the frequent introduction of new products and services. We are subject to uncertain and evolving industry and regulatory requirements. Our business model is largely dependent on digital assets, the broader cryptoeconomy, and the AI economy. Our operating results have and will continue to fluctuate due to a variety of factors, including the highly volatile nature of cryptocurrencies. While we believe we are well-positioned to capitalize on market opportunities made possible by the rapid evolution of the digital assets ecosystem and the AI models, due to the relatively nascent stage of our industries and other challenges that we face, our business model also presents certain material risks. For a further discussion of these risks, see “Risk Factors—Risks Related to our Operations” in this Quarterly Report on Form 10-Q. All participants in the cryptoeconomy, including direct investors, consumers and providers of goods and services related to this industry, may be subject to additional costs associated with participating in this industry, as compared with participation in established commerce, due to the rapidly evolving landscape. The potentially higher costs associated with the cryptoeconomy include, but are not limited to, elevated legal and financial advisory fees, use of significant resources to monitor and maintain compliance with applicable laws and regulations, as well as elevated and unpredictable costs of custody, transactions, insurance and theft. Other material risks specific to this industry include a lack of adoption or acceptance of digital assets and blockchain technology, the volatile prices of digital assets, exposure to malicious actors and platform vulnerabilities, and uncertainties in the tax and accounting treatment of digital assets, among others. For a further discussion of these risks, see “Risk Factors—Risks Related to Cryptocurrencies and Digital Assets” in this Quarterly Report on Form 10-Q Our ability to grow our AI/HPC data center business in the future is also dependent on the overall market for AI/HPC data centers. The broader adoption, use, and commercialization of AI technology, and the continued rapid pace of developments in the AI industry, are inherently uncertain. For example, certain AI technology is under public scrutiny for creating inaccurate, incomplete or misleading content, unintended biases and other discriminatory or unexpected results, errors or inadequacies and may be, or be perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed. For a further discussion of these risks, see “Risk Factors—Risks Related to Our Business Lines.” Our Business Model Galaxy’s business generates revenue through a variety of channels, creating a diversified and resilient cash flow base that is not directly correlated to any single asset, token, or business line. Within the Digital Assets operating business segment, the Global Markets business earns revenue from spreads on client trades, net interest income from lending activities, and fees from M&A and capital raising transactions. Galaxy’s Asset Management & Infrastructure Solutions business generates management and performance fees on assets under management, fees on assets staked to our validator nodes and licensing fees from institutions who leverage GK8’s proprietary self-custody technology. Within our Data Centers operating business segment, we expect the majority of revenue to come from long-term lease agreements with cloud service provider clients that Galaxy may obtain from time to time for HPC. Galaxy does not currently earn any revenue from its Data Centers business, but expects this segment to become a significant and diversified source of long-term, predictable revenue for Galaxy, uncorrelated to the prices of digital assets, particularly once we begin to deliver critical IT load for CoreWeave (and potentially other future tenants) starting in 2026. We also earn revenue by managing a diversified portfolio of digital assets, venture, private equity, and fund investments on our balance sheet, as well as through our bitcoin mining operations, all of which are reported within the Treasury and Corporate segment. 59 Table of Contents Key Factors Affecting Our Performance The growth and success of our business as well as our financial condition and operating results have been, and will continue to be affected by a number of factors, including: Price and volatility of digital assets Values of digital assets have been highly volatile. Effects from speculation regarding the future appreciation or depreciation in the value of digital assets, making their market prices more volatile, may materially and adversely affect the value of our cryptocurrency and other digital asset inventory. Changing investor confidence and resultant fluctuations in the price of various cryptocurrencies may cause uncertainty in the market and could negatively impact trading volumes of cryptocurrencies, which would negatively impact our business and operating results. Adoption of digital assets The cryptoeconomy experienced rapid growth in 2021 driven by the simultaneous widespread adoption of digital assets, expanded use of cryptocurrencies and broader blockchain innovations including DeFi and the growth of non-fungible tokens (“NFTs”) as a prominent form of tokenization. After a retreat in 2022, cryptocurrency markets started to rally in 2023, which continued through December 2024. After a brief retreat in the first quarter of 2025, bitcoin is priced over $100,000 again in May 2025. The initially retail-driven adoption of cryptocurrencies has evolved to include institutional holders, utilizing digital assets as both a store of value and for commercial applications. The lead up to the launch of the spot-based bitcoin ETFs in the U.S. in the first quarter of 2024 followed by the U.S. Presidential election in November 2024 provided a boost to bitcoin. According to the Crypto Market Sizing Report released by Crypto.com, the number of worldwide individual cryptocurrency users was 659 million as of December 2024, up from 580 million in December 2023. Moreover, bitcoin’s trailing five-year compounded annual growth rate reached 67% as of March 31, 2025. However, historical trends are not indicative of future adoption, and it is possible that the adoption of digital assets and blockchain technology may slow, take longer to develop, or never be broadly adopted, which would negatively impact our business and operating results. Strategic acquisitions and investments We intend to continue to use our scale, expertise and balance sheet to identify and execute on acquisitions across our business lines. A series of acquisitions has diversified our product offerings and revenue sources. This includes the acquisitions of two leading cryptocurrency trading firms in November 2020 (DrawBridge Lending and Blue Fire Capital, subsequently rebranded to “Quantitative Principal Trading”), which augmented the trading business’s suite of product offerings and added veteran trading and lending talent to its leadership team. We acquired Vision Hill in May 2021, a premier asset manager in the digital asset sector. In December 2022, we acquired the Helios bitcoin mining facility and its operations from Argo Blockchain. In February 2023, we completed the acquisition of GK8, a developer of secure technology solutions for self-custody of digital assets by institutions, from the Chapter 11 bankruptcy estates of Celsius Network, LLC and its affiliated debtors in possession (the “Celsius Estate”). Most recently in July 2024, we acquired the assets of CMF, a blockchain node operator that provides trusted, secure services to decentralized protocols across the digital asset ecosystem. Any such acquisitions of, or investments in, companies with complementary products and technologies may affect our future operating results. Regulation in U.S. and international markets Our financial prospects and continued growth depend in part on our ability to continue to operate in a manner compliant with regulations. Our business is subject to the oversight of numerous regulatory agencies in the U.S. and other jurisdictions, including, but not limited to, FinCEN, the SEC and the Commodities Futures Trading Commission (“CFTC”). Many of these agencies have issued consumer advisories regarding the risks posed by digital assets to investors. Our strategy is to continue to invest significantly in our finance, legal, compliance, and security functions in order to remain at the forefront of digital asset policy initiatives and regulatory trends. We primarily service institutional customers potentially mitigating some of the compliance risks. However, as the industry matures, we may experience fluctuations in our operating results as a result of changes in the laws and regulations that are applicable to our business. Critical Accounting Policies and Estimates Fair Value Measurements Fair value 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. Fair value is a market-based measure 60 Table of Contents considered from the perspective of a market participant. When market assumptions are not readily available, assumptions are made to reflect those that the Company believes market participants would use in pricing the asset or liability at the measurement date. Certain of the Company’s assets and liabilities are held at fair value. In determining fair value, the Company uses various valuation approaches and establishes a hierarchy for inputs used in measuring fair value, requiring 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 sources independent of the Company. Unobservable inputs reflect assumptions the Company believes other market participants would use in pricing the asset or liability; they are developed based on the best information available in the circumstance. The fair value hierarchy is broken down into three levels: Level 1, Level 2 and Level 3 based on the observability of inputs. The level of judgment required in determining the fair value depends on the availability of observable market information. Financial instruments classified within Level 3, which use significant unobservable inputs, require more significant judgments compared to Level 1 and 2 instruments. The Company values Level 1 and Level 2 assets and liabilities using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company utilizes unobservable pricing inputs and assumptions in determining the fair value of its Level 3 assets and liabilities. These unobservable pricing inputs and assumptions may differ by asset/liability and in the application of valuation methodologies. The Company’s reported fair value estimates could vary materially if different unobservable pricing inputs and other assumptions were used; or for applicable assets/liabilities, if the Company only used a single valuation methodology instead of assigning a weighting to different methodologies. Key unobservable inputs that have a significant impact on the Company’s Level 3 valuations are described in Note 11 of the Company's consolidated financial statements. Due to the wide range of investments we hold, no single individual input is the primary driver of the fair value of the investments on a portfolio basis. However, while it is not an input to the determination of the fair value of the Level 3 investments, in general, there is a strong correlation of the fair value of our Level 3 investments with the overall market values of digital assets such as bitcoin and ether, as the majority of our Level 3 investments are in companies within the digital asset industry. Fair values of Level 3 assets and liabilities may be supported by limited or no market activity within the periods presented. Impairment The Company recognizes certain Digital intangible assets at cost less applicable impairment charge. Impairment exists when the carrying amount exceeds its fair value. The fair value for Digital intangible assets is determined using available pricing on the principal market for the respective digital assets. The Company also recognizes impairment on property and equipment when facts and circumstances indicate that the carrying amounts may not be recoverable. Impairment testing of property and equipment held for use requires determining recoverability based on undiscounted estimated future cash flows, and if the undiscounted cash flows are less than the carrying amounts, the fair value of those assets. This process involves significant judgment. The most significant property and equipment the Company holds relate to its bitcoin mining and AI/HPC leasing operations. The Company estimates the future cash flows related to its property and equipment using a number of key inputs, including but not limited to bitcoin price, bitcoin network difficulty, power cost, cash flows from hosting arrangements, and cash flows from leasing contracts. While no individual input is the most significant driver of the fair value of our mining operation, a significant decline in market value of bitcoin and the estimated residual value of our data center infrastructure would likely result in an impairment of our property and equipment. Allowance for credit losses The Company’s calculation of allowance for credit losses involves judgment in applying various assumptions including valuation of collateral, loss in value of collateral, and the Company’s ability to liquidate collateral in an event of default. Most of the Company’s loans are over collateralized, and the Company has the ability to request additional collateral to maintain a required loan to value ratio. The Company uses the practical expedient under ASC 326-20-35-6 to estimate credit losses based on the fair value of the collateral. However, a rapid loss in value of collateral assets could a ffect the Company’s estimate of expected credit losses. For example, a reduction in the price of digital asset collateral by 20% would increase the allowance for credit losses by $2.9 million as of March 31, 2025. Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statements of financial position included in this Quarterly Report on Form 10-Q. 61 Table of Contents Components of Results of Operations Revenue • Digital assets sales: Gross sales proceeds from sales of digital intangible assets. • Fees : Performance and management fees for unconsolidated funds, for which the Company acts as the general partner and / or manager. Additionally, this includes fees received for investment advisory services including mergers and acquisition advisory, as well as fees earned through technology licensing, mining hosting operations, and mining equipment lease income . • Blockchain rewards : Blockchain generated digital assets and transaction fees earned for proof-of-stake validation, also referred to as staking. • Proprietary mining : Bitcoin rewards from proprietary digital asset mining. • Lending : The return that is earned from digital assets and fiat currencies lent to counterparties. Gains / (losses) from operations • Net gain / (loss) on digital assets : Realized and unrealized gains / (losses) from changes in the fair value of digital assets that are measured using fair value in accordance with our accounting policies, including mark-to-market on applicable digital intangible assets for the periods starting on or after January 1, 2023 when we adopted ASU 2023-08. Additionally, this includes net gains resulting from the return of Digital intangible assets borrowed and Collateral payable. Digital assets borrowed and Collateral payable digital asset liabilities each contain an embedded derivative that is valued based on the market prices of the underlying digital assets; prior to the adoption of ASU 2023-08, the corresponding Digital intangible assets were held at the lower of cost or lowest observable fair value. Upon repayment of the digital asset loans, the impaired digital intangible assets had a lower carrying value than the liabilities, resulting in a gain on extinguishment of the Digital asset loans payable. Other digital asset balances such as Digital assets receivable, digital assets posted as collateral, and Digital assets loan receivable, net of allowance are also measured at the fair value of the underlying digital assets and the resulting fluctuations are also included in Net gain / (loss) on digital assets. • Net gain / (loss) on investments : Gains / (losses) from the changes in fair value of investments, as well as the gain / (loss) from sales of investments held by the Company. • Net gain / (loss) on derivatives trading : Change in fair value of derivative assets and liabilities, resulting from contracts held by the Company for trading purposes. Operating expenses Operating expenses consist of transaction expenses, compensation and benefits, general and administrative, technology, professional fees, and exchangeable notes interest expense. Transaction expenses Transaction expenses consist of the following: • Digital assets sales costs : Carrying value of digital assets sold, net of impairment if applicable, allocated on a first-in-first-out basis. • Impairment of digital assets : Impairment loss from digital intangible assets which have been marked to the lower of cost or lowest observable fair value in the current period. • Blockchain reward distributions : As a principal in the provision of staking services, the Company recognizes the amount of staking rewards earned by third-parties utilizing the Company’s validation infrastructure as part of its operating expenses. • Borrowing costs : Costs of borrowing digital assets and fiat from clients and counterparties. Borrowed digital assets and fiat are utilized in our trading and lending operations. 62 Table of Contents • Mining and hosting costs : Mining power costs, including realized and unrealized gains and losses on power purchase agreements, hosting fee expense and costs of mining equipment recognized through sales-type finance leases. Results of Operations Below is a discussion of our results of operations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The results of operations presented below should be reviewed in conjunction with Galaxy’s consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. GDH LP early adopted ASU 2023-08, published in December 2023, requiring the majority of our digital assets to be measured at fair value each period, beginning with the fiscal year starting January 1, 2023. Three Months Ended March 31, 2025 Compared to Three months ended March 31, 2024 The table below presents our results of operations for the three months ended March 31, 2025 and 2024. Three Months Ended March 31, (in thousands) 2025 2024 Change % Change Revenues 12,976,206 9,335,372 $ 3,640,834 39 % Net gain / (loss) on digital assets (18,223) 346,393 (364,616) (105) % Net gain / (loss) on investments (133,167) 63,018 (196,185) (311) % Net gain / (loss) on derivatives trading 31,059 83,640 (52,581) (63) % Revenues and gains / (losses) from operations $ 12,855,875 $ 9,828,423 3,027,452.291 31 % Operating expenses: Transaction expenses 13,059,439 9,313,616 3,745,823 40 % Compensation and benefits 56,953 61,071 (4,118) (7) % General and administrative 86,575 19,685 66,890 340 % Technology 9,887 6,492 3,395 52 % Professional fees 20,772 13,629 7,143 52 % Notes interest expense 14,071 6,976 7,095 102 % Total operating expenses $ 13,247,697 $ 9,421,469 3,826,228 41 % Other income / (expense): Unrealized gain / (loss) on notes payable – derivative 89,606 (9,713) 99,319 (1,023) % Other income / (expense), net 672 213 459 215 % Total other income / (expense) $ 90,278 $ (9,500) 99,778 (1050) % Net income / (loss) before taxes $ (301,544) $ 397,454 $ (698,997.709) (176) % Income taxes expense / (benefit) (6,112) 9,327 (15,439) (166) % Net income / (loss) $ (295,432) $ 388,127 $ (683,558.709) (176) % 63 Table of Contents Revenues and gains from operations Revenue Three Months Ended March 31, (in thousands) 2025 2024 Change % Change Digital assets sales $ 12,849,569 $ 9,257,178 $ 3,592,391 39 % Fees $ 11,516 $ 28,128 (16,612) (59) % Blockchain rewards 71,112 10,274 60,838 592 % Proprietary mining 11,236 20,128 (8,892) (44) % Revenues from contract with customers $ 12,943,433 $ 9,315,708 $ 3,627,725 39 % Blockchain rewards from non-customers (1) 5,364 2,910 2,454 84 % Lending 27,409 16,754 10,655 64 % Total revenues $ 12,976,206 $ 9,335,372 $ 3,640,834 39 % ______________ (1) Includes blockchain rewards earned from decentralized finance protocols and third-party staking infrastructure. Total revenues were $13.0 billion, an increas e of $3.6 billion, or 39%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, driven by a $3.6 billion increase in Di gital assets sales. Galaxy recognizes revenue from transactions with customers, which include centralized trading platforms, and the corresponding Digital asset sales cost on a gross basis because of its role as principal in sales and purchases of digital intangible assets. The significant volume of Galaxy’s digital intangible asset transactions results in significant Digital assets sales revenue with corresponding digital asset sales cost reflected in Transaction expenses. As a result, the magnitude of changes in Revenue on the Company’s statement of operations overshadow other parts of the business, but are predominantly offset by Transaction expenses in Net income. Digital assets sales were $12.8 billion, an increase of $3.6 billion, or 39% for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was primarily driven by the higher price of bitcoin. Digital assets sales associated with external customer facing trades are reflected in the Digital Assets segment. Sales of bitcoin, ether and tether made up 81% and 97% of Digital assets sales for the three months ended March 31, 2025 and 2024, respectively. Approximately 49% of Digital asset sales revenue for the three months ended March 31, 2025 was comprised of the sale of bitcoin, compared to 70% of Digital assets sales revenue for the three months ended March 31, 2024. Approximately 19% of Digital asset sales revenue for the three months ended March 31, 2025 was comprised of the sale of ether, compared to 13% of Digital assets sales revenue for the three months ended March 31, 2024. Fee revenue was $11.5 million, a decrease of $16.6 million, or 59%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This decrease was primarily attributable to the elimination of hosting services at the Helios site during the first quarter of 2025 in anticipation of the data center conversion. No mining hosting revenue was generated during the three months ended March 31, 2025 as compared to mining hosting revenue of $10.1 million during the three months ended March 31, 2024. In addition, fees attributable to the management of assets in the FTX estate have decreased as the assets are liquidated per Galaxy’s mandate. Blockchain rewards from customers were $71.1 million for the three months ended March 31, 2025, an increase of $60.8 million, compared to the three months ended March 31, 2024. The increase was attributable to validator operation revenue. Galaxy launched proof of stake (“PoS”) validation infrastructure services (reflected within the Digital Assets segment) in late 2023 to which third party and proprietary digital assets may be bonded on PoS networks to generate blockchain rewards. The delegation of restricted SOL, acquired from the FTX bankruptcy estate with an initial value in excess of a billion dollars by the non-consolidated sponsored Galaxy Digital Crypto Vol Fund, starting in the second quarter of 2024, and the acquisition of CMF in July 2024 contributed to the increased Blockchain rewards from customers earned in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The net portion of the blockchain rewards retained by Galaxy earned on third party digital assets bonded to Galaxy validator nodes, including the CPO, was between 4% and 10% as of March 31, 2025. Blockchain rewards from customers generated by the Digital Assets segment on Treasury and Corporate digital assets are eliminated on consolidation within the Treasury and Corporate segment. Blockchain rewards earned from non-customers are primarily generated from participation in various 64 Table of Contents decentralized finance protocols. The yield generated from these activities are primarily driven by the value of the underlying digital asset at the time of receipt and the various incentives provided by the protocols to participants. Proprietary mining was $11.2 million , a decrease of $8.9 million , or 44%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease is primarily attributable to lower hash price that resulted from the halving of the bitcoin network in April 2024. Mining activities are reflected within the Treasury and Corporate segment. Lending was $27.4 million , an increase of $10.7 million, or 64%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily attributable to the increased size of the loan book and higher rates on the new loans. The average loan book size for the three months ended March 31, 2025 was $874.0 million c ompared to $493.6 million for the three months ended March 31, 2024. Counterparty loan originations wer e $1.0 billion for the three months ended March 31, 2025 compared to $168.4 million for the three months ended March 31, 2024. External lending revenue is reflected within the Digital Assets segment. Gains / (losses) from operations Net loss on digital assets was $18.2 million for the three months ended March 31, 2025, compared to a Net gain on digital assets of $346.4 million for the three months ended March 31, 2024. The loss on digital assets during the three months ended March 31, 2025 was driven by net losses on ether and bitcoin of approximately $25 million. Galaxy transacts significantly in and holds net long positions predominantly in bitcoin and ether which decreased in value by 12% and 45%, respectively, in the three months ended March 31, 2025. The net gain or loss on digital assets not measured at fair value depends on the difference in value of the underlying digital asset between the time of recognition and derecognition. Net gain on digital financial assets in the three months ended March 31, 2025 was driven by decreased valuations for digital assets from Galaxy’s net borrowed positions in these assets, which include certain tokenized financial instruments. Net gain / (loss) on digital assets is reflected in both the Digital Assets and Treasury and Corporate segments depending on the underlying activity. The primary drivers for the net gains and losses on digital assets were as follows: Three months ended March 31, (in thousands) 2025 2024 Change % Change Net gain/(loss) on digital intangible assets measured at fair value $ (116,564) $ 273,916 $ (390,480) (143) % Net gain/(loss) on digital intangible assets not measured at fair value (1) 80,570 72,118 8,452 12 % Net gain/(loss) on digital financial assets measured at fair value (2) 17,771 359 17,412 4850 % Net gain/(loss) on digital assets $ (18,223) $ 346,393 (364,616) (105) % _______________ (1) Includes gain on derecognition of impaired digital assets. (2) Includes gains and losses on tokenized financial assets such as U.S. Treasuries as well as tokenized variable debt tokens. Net loss on investments was $133.2 million for the three months ended March 31, 2025, compared to a Net gain on investments of $63.0 million for the three months ended March 31, 2024. The net loss for the three months ended March 31, 2025 was primarily attributable to net losses on bitcoin ETFs and the sponsored Galaxy Digital Crypto Vol Fund. The net gain for the three months ended March 31, 2024 was primarily attributable to unrealized gains on the Company’s investments in bitcoin ETFs, Mt. Gox Investment Fund LP, the sponsored Galaxy Digital Crypto Vol Fund LLC and the Company’s seed investment in its actively managed sponsored fund Galaxy Liquid Alpha Fund, LP, as well as realized gains on the sale of investments including the FTX bankruptcy claims, partially offset by realized losses on short positions. Net gains and losses on proprietary investments are reflected in the Treasury and Corporate segment. Net gain on derivatives trading was $31.1 million, a decrease of $52.6 million, or 63%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Derivatives trading gains include proprietary trading and hedging activities. The decrease was primarily attributable to a $58.2 million decrease o f realized and unrealized gains on settled and unsettled digital asset derivatives, partially offset by an increase of $6.8 million in realized and unrealized gains on settled and unsettled interest rate derivatives. Net gain / (loss) on derivatives is reflected in both the Digital Assets and Treasury and Corporate segments dependent on the underlying activity. 65 Table of Contents Net derivative gain represents gains / (losses) from settled derivative trades and gains / (losses) on open derivatives. It was driven by the following free-standing derivatives: Three Months Ended March 31, 2025 (in thousands) Gains / (losses) on open derivatives Gains / (losses) from settled derivative trades Net gain on derivatives trading Digital assets (1) $ 52,711 $ (49,998) $ 2,713 Foreign currencies 3,918 2,780 6,698 Interest rates (495) 2,020 1,525 Equity securities (1,407) 21,290 19,883 Commodities (495) 735 240 Total $ 54,232 $ (23,173) $ 31,059 ________________ (1) Galaxy actively hedged its exposure to restricted digital assets and digital asset receivables, which contribut ed $9.8 million to Net derivative gains in the three months ended March 31, 2025. Three months ended March 31, 2024 (in thousands) Gains / (losses) on open derivatives Gains / (losses) from settled derivative trades Net gain on derivatives trading Digital assets (1) $ (49,537) $ 110,418 $ 60,881 Foreign currencies 5,164 (2,773) 2,391 Interest rates (4,456) (828) (5,284) Equity securities (6,048) 30,185 24,137 Commodities (416) 1,932 1,516 Other $ — $ — $ — Total $ (55,293) $ 138,934 $ 83,641 _______________ (1) Galaxy actively hedged its exposure to restricted digital assets and digital asset receivables, which contributed $13.8 million to Net derivative losses in the three months ended March 31, 2024. Operating expenses Transaction expenses Three Months Ended March 31, (in thousands) 2025 2024 Change % Change Digital assets sales costs $ 12,839,085 $ 9,247,968 3,591,117 39 % Impairment of digital assets 112,429 25,525 86,904 340 % Blockchain reward distributions 56,446 379 56,067 n/m Borrowing costs 33,838 17,883 15,955 89 % Mining costs 5,534 15,255 (9,721) (64) % Other transaction expenses $ 12,107 $ 6,606 5,501 83 % Transaction expenses $ 13,059,439 $ 9,313,616 3,745,823 40 % Digital assets sales cost w as $12.9 billion, an increase of $3.6 billion, or 39%, f or the three months ended March 31, 2025 , compared to the three months ended March 31, 2024 . This was primarily driven by the higher price of bitcoin . Digital assets sales cost must be analyzed in conjunction with Impairment of digital assets. As a percentage of Digital assets sales, Digital assets sales costs and Impairment of digital assets collectively were approximately 100% for the three months ended March 31, 2025 and 2024. Digital assets sales cost associated with external customer facing trades are reflected in the Digital Assets segment. Impairment of digital assets was $112.4 million, an increase of $86.9 million, or 340%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily attributable to the mix of digital intangible assets with which the Company transacted; specifically higher exposure to digital assets which convey enforceable rights to Galaxy over the underlying assets, such as digital assets from many decentralized finance protocols 66 Table of Contents and wrapped tokens, during the three months ended March 31, 2025, as compared to the same period last year, resulted in higher impairment as the associated assets typically do not qualify for fair value treatment under ASU 2023-08 adopted by the Company as of January 1, 2023. The price of many digital assets also decreased during the three months ended March 31, 2025, whereas during the three months ended March 31, 2024, the prices of digital assets generally increased. Impairment of digital assets includes expense associated with digital intangible assets held at lower of cost or market that were sold during the period and those digital intangible assets still held by Galaxy at the end of the period. Impairment of digital assets is reflected in both the Digital Assets and Treasury and Corporate segments depending on the ownership of the underlying assets. Blockchain reward distributions were $56.4 million for the three months ended March 31, 2025 compared to $0.4 million for the three months ended March 31, 2024. Galaxy launched validators in 2023 (reflected within the Digital Assets segment) to which third party and proprietary digital assets may be bonded on PoS networks to generate blockchain rewards. Blockchain reward distributions represent the staking rewards earned on third party assets staked on Galaxy validators which are passed on to the third parties, net of the fees which Galaxy charges. The delegation of restricted SOL, acquired from the FTX bankruptcy estate with an initial value in excess of a billion dollars by the non-consolidated sponsored Galaxy Digital Crypto Vol Fund, starting in the second quarter of 2024, and the acquisition of CMF in July 2024 contributed to the increased Blockchain rewards and associated Blockchain reward distributions earned in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The net portion of the blockchain rewards retained by Galaxy earned on third party digital assets bonded to Galaxy validator nodes, including the CPO, was between 4% and 10% as of March 31, 2025. Blockchain reward distributions generated by the Digital Assets segment on Treasury and Corporate digital assets are eliminated on consolidation within the Treasury and Corporate segment. Borrowing costs were $33.8 million, an increase of $16.0 million, or 89%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to higher average borrowing volumes supporting increased operational activity. Mining costs were $5.5 million, a decrease of $9.7 million, or 64%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease is primarily attributable to the termination of mining hosting contracts in anticipation of the data center conversion. Power costs are a significant part of mining business expense. Power purchase costs, net of credits were $8.6 million lower during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Galaxy had hashrate under management (“HUM”) attributable to its remaining bitcoin mining machines o f 2.0 exahash as of March 31, 2025 compared to HUM of 5.7 exahash as of March 31, 2024. Mining activities are reflected within the Treasury and Corporate segment. Other transaction expenses were $12.1 million, an increase of $5.5 million, or 83%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Other transaction expenses include exchange, custodial and trading fees. Compensation and benefits were $57.0 million, a decrease of $4.1 million, or 7%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024 due to the roll-off of equity based grants made to employees in 2021 with higher stock prices partially offset by an increase in headcount and a reduction of cash settled share based deferred bonus awards due to a reduction in Galaxy’s share price. General and administrative expenses were $86.6 million, an increase of $66.9 million, or 340%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. T he increase was primarily driven by loss on disposal and impairment of mining equipment of $57.0 million during the three months ended March 31, 2025. Depreciation and amortization of $13.6 million was included in General and administrative expenses for the three months ended March 31, 2025, an increase of $4.1 million compared to $9.5 million for the three months ended March 31, 2024. Net Income/(Loss) Galaxy generated Net loss of $295.4 million for the three months ended March 31, 2025, compared to Net income of $388.1 million for the three months ended March 31, 2024. The primary drivers of Net loss for the three months ended March 31, 2025 were a net loss on our investment portfolio, impairment of our mining equipment and operating expenses. Galaxy transacts significantly in bitcoin and ether wh ich decreased 12% and 45% in value , respectively, during the period. Net trading gains and gains on our net long digital assets position were the drivers of Net income during the three months ended March 31, 2024. 67 Table of Contents The following table represents select financial data and a discussion of significant changes for the past eight quarters: (in millions) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Net gain / (loss) on digital assets $ (18.2) $ 198.2 $ 103.9 $ (13.9) $ 346.4 $ 281.2 (17.0) 23.8 Net gain / (loss) on investments $ (133.2) $ 284.0 $ 13.3 $ (101.5) $ 63.0 $ 37.6 (3.0) (15.2) Quarter over quarter fluctuation Bitcoin (12)% 48% 1% (12)% 69% 57% (12)% 7% Ether (44)% 28% (24)% (6)% 60% 37% (14)% 6% Cryptocurrency market capitalization (18)% 51% (4)% (14)% 64% 53% (9)% 0% Bitcoin price (2) $82,549 $93,429 $63,329 $62,678 $71,334 $42,265 $26,967 $30,477 Ether price (2) $1,853 $3,333 $2,603 $3,433 $3,648 $2,281 $1,671 $1,933 Cryptocurrency market capitalization (1) $2,766,428 $3,393,595 $2,250,803 $2,332,883 $2,702,110 $1,647,895 $1,079,475 $1,190,737 (1) Represents market capitalization data from coinmarketcap.com through September 30, 2024 and from coingecko.com starting with the period ended December 31, 2024. (2) Represents coinmarketcap.com quoted price as of 23:59 UTC for bitcoin and ether. Net gain / (loss) on digital asset and investments have historically been correlated with fluctuations in the prices of bitcoin and ether as demonstrated in the table above. As Galaxy’s operating businesses in the Digital Assets and Data Center segments mature, digital asset prices are anticipated to have a proportionally less significant impact on Net income in the future. Components of Financial Position The following represents selected financial data and a discussion of significant changes. As of (in millions) March 31, 2025 December 31, 2024 Change % Change Digital intangible assets (1) $ 2,138.9 $ 2,568.6 $ (429.7) (17) % Digital financial assets 514.5 359.7 $ 154.8 43 % Digital assets loans receivable 280.1 579.5 $ (299.4) (52) % Assets posted as collateral - digital assets 506.6 277.1 $ 229.5 83 % Digital assets receivable (1) 2.0 7.1 $ (5.1) (72) % Digital assets subtotal 3,442.1 3,792.0 $ (349.9) (9) % Digital assets borrowed (1) 1,767.1 1,497.6 $ 269.5 18 % Collateral payable - digital assets 943.5 1,399.7 $ (456.2) (33) % Digital asset liabilities subtotal 2,710.6 2,897.3 $ (186.7) (6) % Investments (1) 1,281.8 1,643.5 $ (361.7) (22) % Property and equipment 262.2 237.0 $ 25.2 11 % Total assets 6,336.2 7,119.9 $ (783.7) (11) % Total liabilities 4,434.5 4,925.5 $ (491.0) (10) % (1) Includes current and non-current portion. 68 Table of Contents As of March 31, 2025, our digital asset balances were $3.4 billion , a decrease of $349.9 million from December 31, 2024. This decrease was driven by a broad decrease in digital asset prices which also drove the decrease of $186.7 million in our digital assets liabilities balances which totaled $2.7 billion as of March 31, 2025. The Company's largest digital asset holding as of both March 31, 2025 and December 31, 2024 was bitcoin. Over the same period, the price of bitcoin decreased 12%. Investments decreased $361.7 million during the three months to $1.3 billion as of March 31, 2025. This decrease was primarily due to the exit of Xapo Holdings Limited investment after receipt of the final distribution, partial distributions received from the sponsored Galaxy Digital Crypto Vol Fund LLC, and unrealized losses of $254.2 million on investments still held at March 31, 2025. As of March 31, 2025 and December 31, 2024, Galaxy’s largest investments were bitcoin and ether spot ETF investments of $440.9 million and $669.2 million and limited partner interests in Galaxy sponsored funds totaling $331.0 million and $398.4 million, respectively. Only one other investment, Ripple, represented greater than 5% of the total Investments value as of March 31, 2025. Galaxy held a $71.2 million investment in Ripple as of March 31, 2025. As of December 31, 2024, no other remaining investment exceeded 5% of the total Investments balance. Property and equipment increased $25.2 million during the three months to $262.2 million as of March 31, 2025. The increase was primarily due to investment in HPC infrastructure to build out our data center hosting facility at Helios in West Texas partially offset by a $49.2 million impairment of mining equipment and $9.3 million of disposals of mining equipment net carrying value associated with the data center conversion of our Helios campus. Total assets decreased by $784 million during the period to $6.3 billion as of March 31, 2025 primarily due to the $362 million decrease in Investments and $350 million decrease in digital assets balances described above. Total liabilities decreased by $491 million during the period to $4.4 billion as of March 31, 2025 primarily due to a decrease in collateral payable of $456.1 million, a decrease in loans payable of $165.5 million, and a decrease in notes payables of $81.4 million, partially offset by a $269.5 million increase in digital assets borrowed. The decrease in collateral payable (consistent with the decrease in lending receivable balances) and the decrease in loans payable were primarily driven by the decrease in the price of bitcoin as noted above. The decrease in the notes payable balance was driven by the fluctuation of the value on the embedded derivative which is pegged to Galaxy’s share price. Liquidity and Capital Resources We held $509.4 million in cash and cash equivalents as of March 31, 2025, an increase of $47.3 million, or 10.2%, as compared to December 31, 2024. The following table provides a breakdown of the Company’s cash and cash equivalents balances by location: (in millions) March 31, 2025 December 31, 2024 Digital asset trading platforms 16.8 64.7 Other financial institutions (1) 492.6 397.4 Total $ 509.4 $ 462.1 __________________ (1) Includes banks, other trading platforms, and broker-dealers Working capital (current assets less current liabilities) was $1.6 billion and Unit holders’ capital was $1.9 billion as of March 31, 2025, compared to working capital of $2.0 billion and Unit holders’ capital of $2.2 billion as of December 31, 2024. As of March 31, 2025 and December 31, 2024, we held total gross digital assets with a carrying valu e of $2.7 billion and $2.9 billion, respectively. In November 2024, Galaxy issued $402.5 million of 2.500% Exchangeable Senior Notes due 2029. From time to time and subject to the terms of the indenture governing the 2029 Exchangeable Notes, the 2029 Exchangeable Notes were exchangeable for ordinary shares of GDHL at the option of the holders thereof. Following the consummation of the Reorganization Transactions on May 13, 2025, Galaxy’s Exchangeable Notes became exchangeable for shares of Class A common stock of GDI. We are utilizing the net proceeds from the offering to support the build-out of high-performance computing infrastructure at our Helios data center in West Texas and for general corporate purposes. See Note 19 of the Company’s consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information on the 2029 Exchangeable Notes. 69 Table of Contents In April 2024, Galaxy raised C$169.4 million from a syndicate of underwriters, led by Canaccord Genuity Corp. Galaxy issued 12,100,000 Ordinary Shares pursuant to the transaction. We are utilizing the proceeds for working capital and general corporate purposes. In the general course of business, we make commitments to invest in our managed funds and to purchase equipment. As we grow our business, we expect our operating expenses to increase. In addition, we make investments in early-stage companies and coin networks in the digital assets space. Individual investments tend to be small but in the aggregate, these investments can constrain our liquidity. We consider our liquidity position and projected liquidity needs when committing to new investments. Refer to Note 17 of GDH LP’s consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information on commitments and contingencies, Note 14 of GDH LP’s consolidated financial statements for further information on the Company’s lease obligations, and the table in the Contractual Obligations section below. As of March 31, 2025 and December 31, 2024, we did not have any other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial position. From time to time we receive cash inflows from our investments via strategic disposal and redemptions, as well as, via distributions. On a net cash basis, we expect to continue to make investments in our sectors, as we find compelling opportunities, balanced by conservatively managing our liquidity. The $293 million dec rease in Unit holders’ capital during the three months ended March 31, 2025 was primarily due to Net loss of $295 million. (in thousands) March 31, 2025 December 31, 2024 Total assets $ 6,336,192 $ 7,119,855 Total liabilities $ 4,434,548 $ 4,925,503 Unit holders’ capital $ 1,901,644 $ 2,194,352 As of March 31, 2025 and through the date of this filing, we have not experienced any difficulties meeting counterparty requests to return loans or collateral. To meet our estimated capital expenditure requirements related to the conversion of the existing bitcoin mining infrastructure at our Helios campus to AI/HPC data center infrastructure, we will need to obtain additional debt, equity and/or equity-linked financing. The final terms and availability of any such financing will depend on various factors, including market conditions at the time. Beyond the Helios campus conversion, we believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to support working capital requirements for at least the next 12 months. We expect these sources will be sufficient to fund our long-term contractual obligations and capital needs. However, this is subject, to a certain extent, to general economic, financial, competitive, regulatory, and factors that are beyond our control. See “Risk Factors—Risks Related to our Operations—Our expansion into the AI/HPC data center business will require substantial additional capital. We may be unable to obtain additional financing for this or for other areas of business development on acceptable terms or at all” in this Quarterly Report on Form 10-Q. In the event there is insufficient working capital to support the growth of the business, we may sell digital assets to generate cash to meet obligations as they come due, or may exit all or a portion of an investment if an exit price is advantageous to us. We may also seek additional sources of financing in the future, including but not limited to, issuing equity, convertible notes or a debt facility. Cash Flows For the Three Months Ended (in thousands) March 31, 2025 March 31, 2024 Net cash provided by (used in) operating activities 159,413 75,059 Net cash provided by (used in) investing activities 64,100 (366,742) Net cash provided by (used in) financing activities (176,178) 222,305 Three Months Ended March 31, 2025 Cash and cash equivalents for the three months ended March 31, 2025 increased from $247.2 million to $509.4 million. The Company generated $64.1 million for its investing activities, which was primarily due to proceeds and 70 Table of Contents distributions from investments of $781.6 million partially offset by purchases of investments of $645.3 million. Net cash used in financing activities was $176.2 million primarily due to $194.9 million net cash used in margin loans payable and repayment of loans payable of $32.5 million, partially offset by $61.9 million of proceeds from loans payable. Operating activities provided an additional $159.4 million. Three Months Ended March 31, 2024 Cash and cash equivalents during the three months ended March 31, 2024 decreased from $399.9 million to $247.2 million. The Company used $366.7 million for its investing activities, which was primarily due to purchases of investments of $2.3 billion partially offset by proceeds and distributions from investments of $1.9 billion. Net cash provided by financing activities was $222.3 million primarily due to $202.8 million of proceeds from loans payable. Operating activities provided an additional $75.1 million. Contractual Obligations The following table presents a summary of GDH LP’s contractual obligations as of March 31, 2025: (in thousands) Payments Due by Period Contractual Obligations Total Less than 1 year 1 - 3 years 4 - 5 years After 5 years Loans and collateral payable (1) $ 3,055,820 $ 3,049,217 $ 6,603 $ — $ — Lease obligations $ 11,922 $ 3,531 $ 5,390 $ 3,001 $ — Notes payable $ 854,923 $ 7,423 $ 445,000 $ 402,500 Data Center $ 713,073 $ 711,343 $ 1,730 $ — $ — Legal settlement $ 160,000 $ 40,000 $ 120,000 $ — $ — Due to related parties $ 109,048 $ 109,048 $ — $ — $ — Other obligations (2) $ 146,519 $ 1,517 $ 145,002 $ — $ — Total Contractual Obligations $ 5,051,305 $ 3,922,079 $ 723,725 $ 405,501 $ — __________________ (1) Includes fiat and digital asset payables. Loans and collateral with terms of less than one year and those without a prespecified maturity date are included in the Less than 1 year category. However, these balances are generally extended and rolled into new loans and/or collateral. (2) Includes obligations to fund capital commitments to 7 investment funds. Excludes other liabilities related to goods and services required in the ordinary course of business. Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk is the risk associated with changes in the market value of assets and liabilities resulting from broad market movements, such as changes in the general level of interest rates, equity prices, foreign exchange rates, and commodity prices. The Company’s material market risks are outlined below. Digital Asset Price Risk We have invested a significant portion of our capital in digital assets. This includes Digital intangible assets, Digital financial assets, Digital assets loan receivable, net of allowance, Assets posted as collateral, Digital assets receivable, and Derivative assets. Offsetting our digital assets balances, we have digital asset related liabilities including Collateral payable, Digital assets borrowed, and Derivative liabilities. As discussed in Note 2 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, while the majority of our digital assets are measured at fair value starting from January 1, 2023, we continue to account for a material portion of our digital assets as indefinite-lived intangible assets, which are subject to impairment losses if the fair values of our digital assets decrease below their carrying values at any time since their acquisition. Our digital assets related liabilities are accounted for using the fair value of the underlying digital assets, and are sensitive to changes in market prices. Management’s estimate of the effect of digital asset price risk due to a +/- 20% change in the market prices of digital assets, with all other variables held constant, was + /- $181.6 million and $305.2 million as of March 31, 2025 and December 31, 2024, respectively. 71 Table of Contents Equity Price Risk Equity price risk is the risk that the value of equity interests in private or public entities will fluctuate as a result of changes in equity prices (other than those arising from interest rate risk or foreign currency risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. All investments present a risk of loss of capital. The maximum risk resulting from financial instruments is equivalent to their fair value. Our investments are susceptible to other market risk arising from uncertainties about future prices of the instruments. We moderate this risk through the various investment strategies within the parameters of our investment guidelines. Management’s estimate of the effect of equity price risk on investments due to a +/- 20% change in the market prices of our investments and investments sold short, with all other variables held constant, was + /- $242.5 million and $327.4 million as of March 31, 2025 and December 31, 2024, respectively. Credit and Counterparty Risk Our cash and cash equivalents, digital assets, derivatives, receivables (including digital assets receivables) and loans receivable (including digital asset loans receivable) are exposed to credit risk. There are two main activities or processes in which we participate which give rise to credit risk: lending and posting risk margin with trading platforms. Galaxy transacts in digital assets with third parties for lending, borrowing, and derivative trading purposes. These activities expose Galaxy to credit and counterparty risk. We mitigate this risk by requiring counterparties to provide collateral assets. Collateral that we accept is assessed based on its liquidity, volatility, correlation to the counterparty, and overall risk profile at the time of the transaction. Collateral accepted for digital asset loans is typically other denominations of digital assets or U.S. dollars. We only accept digital assets as collateral which are internally approved for trading. However, permissible collateral does not include all digital assets that are approved for trading. On termination of the loan, the borrower is required to return the digital assets to us, and any gains or loss in the market price during the loan would inure to us. In the event of a bankruptcy of the borrower, we could experience delays in recovering our digital assets. In addition, to the extent that the value of the digital assets increases during the term of the loan, the value of the digital assets may exceed the value of collateral provided to us, exposing us to credit risks with respect to the borrower and potentially exposing us to a loss of the difference between the value of the digital assets and the value of the collateral. If a counterparty defaults under its obligations with respect to a loan of digital assets or an open derivative position, including by failing to deliver additional collateral when required or by failing to return the digital assets upon the termination of the loan or settlement of the derivative, we may expend significant resources and incur significant expenses in connection with efforts to enforce the relevant agreement, which may ultimately be unsuccessful. Galaxy participates in decentralized finance protocols as part of its operations. Decentralized finance is built on smart contracts that facilitate transactions without traditional intermediaries. The counterparty risk is elevated in decentralized finance environments due to the pseudonymous nature of blockchain transactions. Furthermore, the collateralization mechanisms in DeFi, often involving volatile digital assets, can lead to liquidity issues, especially in market downturns. The lack of a central authority or regulated framework to enforce contractual obligations or provide depositor insurance also increases our risk, as we have limited recourse in the event of defaults or platform failures. Additionally, smart contract risks, such as code vulnerabilities or execution failures, can result in significant financial losses. We have implemented monitoring procedures to both identify potentially malicious counterparties and minimize our exposure to any individual decentralized protocol. We post risk margin in the form of digital assets and U.S. dollars with digital asset trading platforms to participate in activities within the trading platform. The posting of risk margin is required to utilize leverage for spot, futures and derivative trading with regards to digital assets. Certain trading platforms will accept digital assets as collateral while other venues will only accept U.S. Dollars. 72 Table of Contents Below is a list of digital asset trading platforms, including their location and type of collateral posted, where Galaxy posted more than a de minimis amount of risk margin as of March 31, 2025: Entity Entity Type Entity Domicile Collateral Type Coinbase Digital asset trading platform United States Digital assets Binance Digital asset trading platform Malta Digital assets OKX Digital asset trading platform Seychelles Digital assets Bybit Digital asset derivatives platform United Arab Emirates Digital assets Deribit Digital asset trading platform Panama Digital assets As of March 31, 2025, the total amount of digital assets on the digital asset trading platforms listed above was $739.7 million, of which $402.6 million was held at Coinbase, $196.3 million was held at Binance, $52.5 million was held at OKX, $46.4 million was held at Bybit, and $41.9 million was held at Deribit. In addition to the above, Galaxy maintained past relationships with Bakkt, Bitfinex, Bitmex, Bitstamp, Blockchain (PITX), Bullish, Huobi, Kraken, LMAX and Wootrade, all of which are digital asset trading platforms. Galaxy may re-engage with the foregoing digital asset trading platforms or other trading platforms at some point in the future. Galaxy also, in the regular course of business, posts margin at financial institutions and other trading platforms outside of digital asset trading platforms. Some of these digital asset trading and digital asset derivatives platforms (collectively referred to in this Quarterly Report on Form 10-Q as “digital asset trading platforms”) are unregulated and are not subject to regulatory oversight. Furthermore, certain digital asset trading platforms engage in the practice of commingling their clients’ assets in omnibus platform wallets. When digital assets are commingled, transactions are not recorded on the applicable blockchain ledger but are only recorded by the digital asset trading platform. Therefore, there is risk around the occurrence of transactions or the existence of period end balances held at these digital asset trading platforms, and digital assets held at such digital asset trading platforms are subject to the risk of loss in the event of a bankruptcy, liquidation or similar event involving the trading platform. We limit our credit risk by placing our cash and digital assets with financial institutions and trading platforms on which we have performed internal due diligence procedures. Our due diligence procedures around trading platforms include, but are not limited to, internal control procedures around on-boarding new platforms which includes review of their anti-money laundering (“AML”) and know-your-client (“KYC”) policies by our Chief Compliance Officer (centralized platform specific); obtaining a security report by an independent third-party, if available; regular review of market information specifically regarding the trading platforms’ security and solvency risk, including reviewing wallets that interact with decentralized platforms (decentralized platform specific); setting balance limits for each platform account based on risk exposure thresholds and preparing daily asset management reports to ensure limits are being followed; and having a fail-over plan to move cash and digital assets held on an platform in instances where risk exposure significantly changes. While we intend to only transact with counterparties or platforms that we believe to be creditworthy, there can be no assurance that a counterparty will not default and that we will not sustain a material loss on a transaction as a result. Item 4. Controls and Procedures Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation and supervision of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2025, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level. Changes in Internal Control over Financial Reporting 73 Table of Contents There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 74 Table of Contents PART II - OTHER INFORMATION Item 1. Legal Proceedings In the ordinary course of business, the Company and its subsidiaries and affiliates may be threatened with, named as defendants in, or made parties to pending and potential legal actions, including class actions, arbitrations and other disputes. The Company and its subsidiaries and affiliates are also subject to oversight by numerous regulatory and other governmental agencies and may receive inspection requests, investigative subpoenas and requests from regulators for documents and information, which could lead to enforcement investigations and actions. The Company reviews any lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with its accounting policies. Except as discussed below, the Company does not believe that the ultimate resolution of existing legal and regulatory outstanding matters will have a material effect upon our financial condition or liquidity. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution of one or more of these matters may have a material adverse effect on the Company’s results of operations for a particular period, and future changes in circumstances or additional information could result in additional accruals or resolution in excess of established accruals, which could adversely affect the Company’s results of operations, potentially materially. SEC matters: In prior years, members of the staff of the SEC’s Division of Enforcement raised whether certain of the digital assets that we trade are securities and therefore such trading activities should be conducted through a registered entity. In addition, the staff of the SEC’s Division of Enforcement also raised whether off-channel communications were appropriately captured. In February 2025, we received termination letters concluding these investigations without charges. Luna matters: On March 27, 2025, Galaxy reached an agreement with the New York State Attorney General to resolve civil claims related to certain investments, trading, and public statements made in connection with the LUNA digital asset from late 2020 to 2022. As of March 31, 2025, GDH LP accrued a legal provision of $186 million. The accrued amounts include the impact of discounting the estimated cash flows at a rate of approximately 4.3%. The undiscounted settlement is $200 million and payable between 2025 and 2028, with a payment of $40 million in each of 2025 and 2026, and a payment of $60 million in each of 2027 and 2028. Under the terms of the settlement, Galaxy also agreed to, among other things, compliance enhancements related to public statements about cryptocurrency and purchases and sales of cryptocurrency. In December 2022, a proposed class action was filed in the Ontario Superior Court of Justice against GDH Ltd., our Chief Executive Officer and our former Chief Financial Officer asserting various claims including alleged misrepresentations relating to our public disclosure regarding investments and trading in the LUNA digital asset. The class action purports to be brought on behalf of a proposed class of persons and entities who acquired our securities on the secondary market from May 17, 2021 to and including May 6, 2022. The class action seeks unspecified damages and various declaratory relief, including leave to proceed with the right of action for misrepresentation under statutory securities provisions. These proceedings are still in early stages and have not been certified to proceed as a class action. Based on the stage of the case, the outcome remains uncertain, and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time. See “Item 1A. Risk Factors—Risks Related to our Operations—We or our subsidiaries and affiliates are and may continue to be subject to substantial litigation, including individual and class action lawsuits, and regulatory risks” for additional information about the risks related to the Luna matters. Item 1A. Risk Factors Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Condensed Consolidated Financial Statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, operating results, financial condition, and future prospects could be materially and adversely affected. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories. The market price of our Class A common stock could decline, and you could lose part or all of your investment due to any of these risks. Some statements in this Quarterly Report on Form 10-Q, including statements in the following risk factors, constitute forward-looking statements. See the section titled “Special Note Regarding Forward-Looking Statements.” 75 Table of Contents Summary Risk Factors Consistent with the foregoing, we are exposed to a variety of risks, including the following: • We have limited operating history. Our business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and other risks in every jurisdiction and are not assured to be profitable. • Our operating results have and will significantly fluctuate due to a variety of factors, including the highly volatile nature of cryptocurrency. • A determination that a digital asset is a “security,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could adversely affect the value of that digital asset and potentially digital assets generally, and could therefore adversely impact our business, financial condition and results of operations as well as the market price of our Class A common stock. • A determination that a digital asset is a “security,” or a “security-based swap,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could have adverse regulatory consequences for us, and could therefore adversely impact our business, financial condition and results of operations as well as the market price of our Class A common stock. • Our process for analyzing whether or not a particular digital asset is a security for purposes of the federal securities laws may not yield results that are consistent with subsequent determinations by the SEC or federal courts, or with similar determinations made by our competitors. • We are highly dependent on our key personnel, including our Founder, which exposes stockholders to material and unpredictable “key man” risk. • If we fail to develop, maintain and enhance our brand and reputation, our business operating results and financial condition may be adversely affected. • We operate in highly competitive industries; and we compete against unregulated or less regulated companies and companies with greater financial and other resources; and our business, operating results, and financial condition may be adversely affected if we are unable to respond to our competitors effectively. • We or our subsidiaries and affiliates are and may continue to be subject to substantial litigation, including individual and class action lawsuits, and regulatory risks. • Our business relies on third-party service providers and subjects us to risks that we may not be able to control or remediate. • Because our long-term success depends, in part, on our ability to expand our sales to customers outside the United States, our business is susceptible to risks associated with international operations. • Managing different business lines could present conflicts of interest. • Our strategy to expand into the AI/HPC data center business may not be successful and may result in adverse consequences to our business, financial condition and results of operations. • Our AI/HPC data center business model is predicated, in part, on establishing and maintaining a customer base that will generate a recurring stream of revenues. If that recurring stream of revenues is not maintained or does not increase as expected, our operating results may be adversely affected. • We are subject to risks in connection with our mining business and AI/HPC data center business, including risks associated with counterparties. • Digital assets represent a new and rapidly evolving industry, and the market price of our Class A common stock has in the past and may in the future be impacted by the acceptance of bitcoin and other digital assets. • Our and our third-party service providers’ failure to safeguard and manage our and our customers’ funds and digital assets could adversely impact our business, operating results and financial condition. 76 Table of Contents • Legislative or regulatory changes or actions by the U.S. Congress or any U.S. federal or state agencies could restrict the use of one or more digital assets, the ability to enter into transactions referencing digital assets, validating or mining activity, the operation of digital asset networks or digital asset trading platforms in a manner that adversely affects our business. • Cybersecurity incidents and other issues related to our information systems, technology and data may materially and adversely affect us. • Any failure to obtain, maintain, protect, defend or enforce our intellectual property and other proprietary rights could adversely affect our business, financial condition and results of operations. • GDI’s principal asset is its direct ownership interest in GDH LP. GDI is accordingly dependent upon distributions from GDH LP to pay dividends, if any, and taxes, make payments under the Tax Receivable Agreement and pay other expenses. • We are controlled by our Founder, whose interests may be different from those of stockholders and may prevent new investors from influencing significant corporate decisions, including mergers, consolidations, or the sale of us or all or substantially all of our assets. • The market price and trading volume of our Class A common stock may be volatile. Market volatility may affect the value of an investment in our Class A common stock and could subject us to litigation. • Substantial future sales of shares of our Class A common stock in the public market could cause the market price of our Class A common stock to fall. • We will face challenges, increased costs and administrative responsibilities as a newly listed U.S. company, and management has already devoted substantial time, and upon listing, will continue to devote time to related compliance initiatives. • Our management team has limited experience managing a U.S. public company and some members of senior management are new to our company and our industry. Our business could be adversely affected if our management team is not successfully integrated or does not execute our business plan and developmental strategies. Risks Related to Our Operations We have limited operating history. Our business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and other risks in every jurisdiction and are not assured to be profitable. We and our subsidiaries have limited operating history on which an investor might evaluate our performance. We began operations in 2018, and publicly introduced new products and services, including buying and selling of select cryptocurrencies (our “trading” business), managing capital on behalf of third parties (our “asset management” services), our financial, investment and strategic financial services (our “investment banking” services), our balance sheet venture investments portfolio (managed by our “crypto ventures” team), our suite of products and services related to bitcoin mining (our “mining” services) in 2020, our self-custody technology business in 2023, and our validator services business in 2024. As a result, we are subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues, any of which could have a material adverse effect on us and may force us to reduce or curtail operations. Due to our limited operating history, our business model has not been fully proven and we have limited financial data that can be used to evaluate our current business and future prospects, which subjects us to a number of uncertainties, including our ability to plan for, model and manage future growth and risks. Our historical revenue growth should not be considered indicative of our future performance. There is no assurance that we will be successful in achieving a return on stockholders’ investment and the likelihood of success must be considered in light of the early stage of operations. Even if we accomplish these objectives, we may not generate the anticipated positive cash flows or profits. No assurance can be given that we will ever be successful in our operations and operate profitably. Furthermore, our business lines are nascent, unproven and subject to material legal, regulatory, operational, reputational, tax and other risks in every jurisdiction and are not assured to be profitable. We may fail to be able to implement our investment or trading strategies, achieve our investment objectives, effectively operate our digital asset mining sites, develop our business lines or produce a return for our investors. We have chosen to pursue a number of different businesses in this evolving industry. It is possible that some of these businesses may be difficult to enter and/or it 77 Table of Contents may become evident that a particular business is not a productive use of capital or time. In particular it is possible that existing laws and regulations (as interpreted going forward), and newly-enacted laws and regulations that have not yet become effective or been proposed, could make it impractical or impossible for us to enter into new business lines and may require us to stop engaging in certain business activities that we already perform that may currently be profitable. These difficulties and legal restrictions could lead us to modify our businesses and focus. In particular, we may become involved in investments and projects that are not directly related to the digital asset or blockchain industry. These projects are likely to relate to industries and clients that we believe will benefit in the future from blockchain technology and our experience and network in digital assets industry. From time to time, we may also launch new lines of business, offer new products and services within existing lines of business or undertake other strategic projects. For example, we are currently in the process of converting the infrastructure at our Helios mining campus to AI/HPC data center infrastructure and operations. While we have experience in providing computing power, we have no experience in developing, retrofitting and offering AI/HPC data centers, and there can be no assurance that these or any other modifications to our business model and strategy will be successful or will not result in harm to our business. See “—Risks Related to Our Business Lines—Our strategy to expand into the AI/HPC data center business may not be successful and may result in adverse consequences to our business, financial condition and results of operations” for more information on the risks relating to our transition to the AI/HPC business. There are substantial risks and uncertainties associated with these efforts and we expect to invest significant capital and resources in such efforts. Regulatory requirements can affect whether initiatives are able to be brought to market at all and, even if so, in a manner that is timely and attractive to our customers. Initial timetables for the development and introduction of new lines of business, products or services and price and profitability targets may not be met. Furthermore, our revenues and costs may fluctuate due to start-up costs associated with new businesses or products and services (including for legal or regulatory reasons) while revenues may take time to develop, which may adversely impact our results of operations. If we are unable to successfully manage our business while reducing expenses, our ability to continue in business could depend on the ability to raise sufficient additional capital, obtain sufficient financing and monetizing assets. The occurrence of any of the foregoing risks would have a material adverse effect on our financial results, business and prospects. Our operating results have and will significantly fluctuate due to a variety of factors, including the highly volatile nature of cryptocurrency. Our leading sources of revenue are dependent on digital assets and the broader cryptoeconomy. Our operating results have and will significantly fluctuate due to a variety of factors, including the highly volatile nature of cryptocurrency. Significant positive or negative changes in cryptocurrency asset prices (whether individually or in the aggregate) will not necessarily result in similar benefit or impairment to our operating results and financial condition. For example, the cumulative market capitalization of cryptocurrencies decreased approximately 57% during the three months ended June 30, 2022, while the value of GDH LP limited partners’ capital decreased 23% during the same period. Our operating results will continue to fluctuate significantly as a result of a variety of factors, many of which are unpredictable and in certain instances are outside of our control, including: • our dependence on offerings that are dependent on digital asset trading activity, including trading volume and the prevailing trading prices for digital assets, whose trading prices and volume can be highly volatile; • our ability to attract, maintain, and grow our customer base and engage our customers; • changes in the legislative or regulatory environment, or actions by governments or regulators, including fines, orders, or consent decrees; • legislative or regulatory changes that impact our ability to offer certain products or services; • the impact of environmental, social and governance concerns surrounding digital assets; • pricing for our products and services; • investments we make in the development of products and services as well as technology offered to our ecosystem partners, international expansion, and sales and marketing; • our ability to utilize, utilization of and dependence on centralized digital asset trading platforms and OTC markets that are approved primarily based on our diligence review; • macroeconomic conditions, including decreased trading in global markets or decreased demand for financial services products generally; • disputes with our customers or regulators, adverse legal proceedings or regulatory enforcement actions, judgments, settlements, or other legal proceeding and enforcement-related costs; 78 Table of Contents • the development and introduction of existing and new products and services by us or our competitors; • increases in operating expenses that we expect to incur to grow and expand our operations and to remain competitive; • the timing and amount of non-cash expenses, such as stock-based compensation and asset impairment; • system failure or outages, including with respect to third-party cryptocurrency networks, decentralized finance protocols, breaches of security or privacy or any inaccessibility of the third-party cryptocurrency networks or decentralized finance protocols due to our or third-party actions; • changes in the overall tax rate for our business, changes in tax laws or judicial or regulatory interpretations of tax laws; • changes in accounting standards, policies, guidance and interpretations or principles; • changes in requirements imposed on us by regulators or by our counterparties, including net capital requirements imposed by the SEC and the Financial Industry Regulatory Authority (“FINRA”) on our broker-dealers; • our ability to attract and retain talent; • our ability to compete with our competitors; and • general economic conditions in either domestic or international markets, including the impact of pandemics. As a result of these factors, it is difficult for us to forecast growth trends accurately and our business and future prospects are difficult to evaluate, particularly in the short term. In light of the rapidly evolving nature of our business and the cryptoeconomy, period-to-period comparisons of our operating results may not be meaningful, and you should not rely upon them as an indication of future performance. Quarterly and annual expenses reflected in our financial statements may be significantly different from historical or projected rates. Our operating results in one or more future quarters may fall below the expectations of securities analysts and investors. As a result, the market price of our Class A common stock may increase or decrease significantly. Our operating results are dependent on the prices of digital assets and volume of transactions that we conduct. If such price or volume declines, our business, operating results, and financial condition would be adversely affected. Any declines in the volume of digital asset transactions, the price of digital assets, or market liquidity for digital assets generally may adversely affect our operating results. We have significant investments in digital assets. As of March 31, 2025, we held digital intangible assets of $2.1 billion, digital financial assets of $514.5 million, and bitcoin and ether spot ETF investments of $440.9 million. In addition, GDH LP unit holders’ capital was $1.9 billion as of such date. Changes in the value of digital assets will generally have a significant impact on our results. Our operating results will be impacted by the revenues and profits we generate from the purchase, sale, and trading of digital assets and financial contracts linked to digital assets. The price of digital assets and associated demand for buying, selling, and trading of digital assets have historically been subject to significant volatility. For instance, in 2017 and 2021, the value of certain digital assets, including bitcoin, experienced steep increases in value, followed by steep declines in 2018 and 2022. After recovering from the 2018 decline and reaching record highs in December 2021, the value of the total crypto market cap declined by approximately 64% in the twelve months ended December 31, 2022. The collapse of several companies in the digital asset industry such as Celsius, Voyager and FTX impacted digital assets prices in 2022 and the majority of 2023. We believe that the approval and launch of spot-based Bitcoin ETFs in the U.S. in the first quarter of 2024 and the election of President Donald Trump in the fourth quarter of 2024 drove up the crypto market cap again in 2024, but the crypto market generally declined in the first quarter of 2025. The price and trading volume of any digital asset is subject to significant uncertainty and volatility, and may significantly decline in the future, without recovery. Such uncertainty and volatility depend on a number of factors, including: • market conditions across the cryptoeconomy; • changes in liquidity, volume, and trading activities; • trading activities on digital asset trading platforms worldwide, many of which may be unregulated, and may include manipulative activities; • investment and trading activities of highly active retail and institutional users, speculators, miners, and investors; • the speed and rate at which cryptocurrency is able to gain adoption as a medium of exchange, utility, store of value, consumptive asset, security instrument, or other financial assets worldwide, if at all; 79 Table of Contents • decreased user and investor confidence in digital assets and digital asset trading platforms; • negative publicity and events relating to the cryptoeconomy; • unpredictable social media coverage or “trending” of digital assets; • the ability for digital assets to meet user and investor demands; • the functionality and utility of digital assets and their associated ecosystems and networks, including digital assets designed for use in various applications; • consumer preferences and perceived value of digital assets and digital asset markets; • increased competition from other payment services or other digital assets that exhibit better speed, security, scalability, or other characteristics; • regulatory (including enforcement) or legislative changes and updates affecting the cryptoeconomy; • the characterization of digital assets under the laws of various jurisdictions around the world; • the maintenance, troubleshooting, and development of the blockchain networks underlying digital assets, including by miners, validators, and developers worldwide; • the ability for cryptocurrency networks to attract and retain miners or validators to secure and confirm transactions accurately and efficiently; • ongoing technological viability and security of digital assets and their associated smart contracts, applications and networks, including vulnerabilities against hacks and scalability; • fees and speed associated with processing digital asset transactions, including on the underlying blockchain networks and on digital asset trading platforms; • financial strength of market participants; • the availability and cost of funding and capital; • the liquidity of digital asset trading platforms; • interruptions in service from or failures of major digital asset trading platforms; • availability of an active derivatives market for various digital assets; • availability of banking and payment services to support cryptocurrency-related projects; • level of interest rates and inflation; • monetary policies of governments, trade restrictions, and fiat currency devaluations; and • national and international economic and political conditions. There is no assurance that any digital asset will maintain its value or that there will be meaningful levels of trading activities. For example, in 2022 we witnessed dampened demand for trading digital assets in the wake of industry turmoil, impacting our operating results. In the event that the price of digital assets or the demand for trading digital assets decline, our business, operating results, and financial condition could be adversely affected. Our operating results are dependent on the prices of digital assets and volume of transactions that we conduct, which have historically been volatile and are subject to social media and publicity risks. Activities in bitcoin and other digital assets also receive a high degree of public scrutiny, both from traditional media sources and through social media and other forums. Unfavorable publicity regarding bitcoin has adversely affected the price of bitcoin, as has unfavorable publicity involving other digital assets or digital asset-focused firms. Bitcoin has in the past, and may in the future, be the target of media criticism, including regarding the market value, utility and environmental effects of bitcoin. Such unfavorable media coverage could continue to materially impact decisions to buy, hold, or trade bitcoin and, as a result, impact the price of bitcoin. 80 Table of Contents In addition, social media posts and other statements and actions by prominent individuals, including Elon Musk and Michael Saylor, have resulted in outsized movements in the market price of bitcoin and other cryptocurrencies. It is possible that future statements by Mr. Musk, Mr. Saylor and other individuals concerning bitcoin and other cryptocurrencies will have disproportionate impacts on the market price of bitcoin and other digital assets. A determination that a digital asset is a “security,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could adversely affect the value of that digital asset and potentially digital assets generally, and could therefore adversely impact our business, financial condition and results of operations as well as the market price of our Class A common stock. Depending on the facts and circumstances, a digital asset may be considered a “security,” or an activity in which we engage may be deemed to involve a “securities transaction,” under the federal or state securities laws. The test for determining whether a particular digital asset is a “security,” or whether a particular activity involves a “securities transaction,” is complex and difficult to apply, and the outcome is difficult to predict. Public, though non-binding, statements by senior officials at the SEC have indicated that the SEC did not consider bitcoin or ether to be securities, and does not currently consider bitcoin to be a security. Moreover, the staff of the SEC’s Division of Corporation Finance has published statements that it does not consider, under certain circumstances, “meme coins” or some stablecoins to be securities. However, such statements may be withdrawn at any time without notice and comment by the staff of the Division of Corporation Finance at the SEC or the SEC itself. In addition, the SEC, through delegated authority approving the exchange rule filings to list shares of trusts holding ether as commodity-based ETFs, appears to have implicitly taken the view that ether is not a security, and through delegated authority has approved exchange rule filings to list shares of trusts holding ether as commodity-based exchange traded products that are not registered as investment companies. The SEC staff has also authored informal, non-binding “no-action” letters to the promoters of a handful of digital assets to the effect that the staff would not recommend enforcement action to the SEC on the basis that transactions in such digital assets, as described to the staff by their respective promoters, are securities transactions. On the other hand, the SEC under the prior administration brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets in question are securities. Under the prior administration, the SEC also brought enforcement actions against digital asset trading platforms for allegedly operating unregistered securities exchanges, brokers, and clearing agencies on the basis that certain of the digital assets that they facilitate trading and settlement of through their platforms are securities. In January 2025, the SEC launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for digital assets let by Commissioner Hester Peirce. Subsequently, Commissioner Peirce announced a list of specific priorities to further that initiative, which included pursuing final rules related to a digital asset’s security status, a revised path to registered offerings and listings for digital assets-based investment vehicles, and clarity regarding digital asset custody, lending, and staking. However, the efforts of the crypto task force have only just begun, and how or whether the SEC regulates digital asset activity in the future remains to be seen. Whether a digital asset is a security or offers and sales of a digital asset are securities transactions under the federal securities laws depends on whether it is included in the lists of instruments making up the definition of “security” in the Securities Act, the Exchange Act, the Investment Advisers Act and the Investment Company Act of 1940, as amended (the “Investment Company Act”) (collectively, “federal securities laws”). Digital assets as such do not appear in any of these lists, although each list includes the terms “investment contract” and “note,” and the SEC has typically analyzed whether a particular digital asset is a security by reference to whether it meets the tests developed by the federal courts interpreting these terms, known as the Howey and Reves tests, respectively. For many digital assets, whether or not the Howey or Reves tests are met is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular digital asset qualifying as a security under one or both of the Howey and Reves tests. Adding to the complexity, the SEC staff has indicated that the security status of a particular digital asset can change over time as the relevant facts evolve, though the SEC has not further addressed this theory in its ongoing litigation. Certain state regulators or attorneys general have also alleged that certain digital assets are securities under relevant state laws and that digital asset trading platforms’ activities violate state securities laws. Any enforcement action by the SEC or a state securities regulator asserting that a digital asset is a security or sold in a securities transaction or related derivatives contract, or a court decision to that effect, would be expected to have an immediate material adverse impact on the trading value of that digital asset, and depending on the specific characteristics of the digital asset, could have adverse spillover effects on the trading values of other digital assets perceived to share similar characteristics. This is because the business models behind most digital assets are incompatible with U.S. regulations applying to transactions in securities. If a digital asset is determined to be a security, it is likely to become 81 Table of Contents difficult or impossible for the digital asset to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets. For example, all transactions in such digital asset would have to be registered with the SEC and potentially state securities regulators, or conducted in accordance with exemptions from registration, which could severely limit its liquidity and usefulness. Moreover, the network on which such digital asset is utilized may be subject to regulation as an intermediary in the securities markets, which could effectively render the network impracticable for its intended purposes. In addition to materially and adversely affecting the trading value of the digital asset, any such consequences are likely to significantly impact its liquidity and market participants’ ability to convert the digital asset into U.S. dollars. Any assertion that a digital asset is a security or securities transaction, respectively, by the SEC or another regulatory or judicial authority may have similar effects. The SEC’s positions on the federal securities law status of particular digital assets are closely watched and can have dramatic effects, whether or not the SEC’s positions prevail in federal court. For example, in 2020 the SEC filed a complaint against the promoters of XRP alleging that they raised more than $1.3 billion through XRP sales that should have been registered under the federal securities laws, but were not. In the weeks following the filing of the SEC’s complaint, XRP’s market capitalization fell to less than $10 billion, which was less than half of its market capitalization in the days prior to the complaint. Subsequently, in July 2023, the District Court for the Southern District of New York held that while XRP is not a “security,” certain sales of XRP to certain buyers (but not other types of sales to other buyers) amounted to “investment contracts” under the Howey test and therefore securities. The District Court entered a final judgment in the case on August 7, 2024. On January 15, 2025, the SEC filed an appeal against the judgment with the United States Court of Appeals for the Second Circuit (the “Second Circuit”). In late March of 2025, senior executives of the promoters of XRP announced on social media platforms that the SEC has agreed to drop its appeal without conditions in connection with its settlement agreement with the SEC, which is subject to finalization. On April 10, 2025, the promoters of XRP and the SEC filed a joint motion to pause the judicial proceedings. On April 16, 2025, the Second Circuit granted the joint motion and ordered the SEC to file a status report within 60 days. On May 8, 2025 the promoters of XRP and the SEC entered into a settlement agreement, which provided that, among other things, the parties would jointly request the district court to issue an indicative ruling as to whether it would dissolve the August 7, 2024 injunction and order the escrow account to be released, with $50 million ultimately being paid by the promoters of XRP as a civil penalty to the SEC. Likewise, in the days following the announcement of SEC enforcement actions against certain digital asset issuers and trading platforms, the prices of various digital assets declined significantly and may continue to decline if or as such cases advance through the federal court system. Furthermore, the decisions in cases involving digital assets have resulted in seemingly inconsistent views of different district court judges, including one that explicitly disagreed with the analysis underlying the decision regarding XRP, which underscore the continuing uncertainty around which digital assets or transactions in digital assets are securities and what the correct analysis is to determine each digital asset’s status. For example, the conflicting district court opinions and analyses demonstrate that factors such as how long a digital asset has been in existence, how widely held it is, how large its market capitalization is, the manner in which it is offered, sold or promoted and whether it has actual use in commercial transactions, ultimately may have limited to no bearing on whether the SEC, a state securities regulator or any particular court will find it to be a security. In June 2023, the SEC brought an action against Binance (the “Binance Complaint”) and Coinbase (the “Coinbase Complaint”) alleging that they solicited U.S. investors to buy, sell, and trade “crypto asset securities” through their unregistered trading platforms and operated unregistered securities exchanges, brokerages and clearing agencies. Binance subsequently announced that it would be suspending USD deposits and withdrawals on Binance.US and that it planned to delist its USD trading pairs. In November 2023, the SEC brought similar charges against Kraken (the “Kraken Complaint”), alleging that it operated as an unregistered securities exchange, brokerage and clearing agency. In February 2025, a 60-day stay was granted in the SEC’s lawsuit against Binance in response to a joint request by both the SEC and Binance, which acknowledged that the SEC’s newly formed Crypto Task Force’s focus on developing a federal securities laws framework for digital assets may resolve the case. In February 2025, Coinbase and the SEC entered into a court-approved joint stipulation to dismiss the SEC’s lawsuit with prejudice. In March 2025, Kraken and the SEC jointly dismissed the SEC’s lawsuit with prejudice. Several other digital assets market participants have also announced that the SEC informed them that the SEC was terminating its investigation or enforcement action into their firm. The final outcome of these lawsuits (to the extent not yet dismissed), their effect on the broader digital asset ecosystem and the reputation impact on industry participants, remain uncertain. As part of our trading business, we have in the past and in some cases continue to provide clients and counterparties access to certain digital assets that the SEC in these complaints has alleged to be securities, or the subject of securities transactions. We carefully consider the implications of these allegations as well as other developments relating to the digital assets to which we may provide clients and counterparties access. 82 Table of Contents As described under “—A determination that a digital asset is a “security,” or a “security-based swap,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could have adverse regulatory consequences for us, and could therefore adversely impact our business, financial condition and results of operations as well as the market price of our Class A common stock,” the determination that a digital asset is a security under the federal securities laws could also have adverse U.S. regulatory consequences for us. But even if there were no such adverse U.S. regulatory consequences, we may nevertheless decide to terminate our services relating to that digital asset and liquidate our holdings of that digital asset while we believe a liquid market still exists, which could result in us selling that digital asset at depressed prices. To the extent we hold any digital asset that is impacted by an assertion or finding of securities status, or we engage in any economic arrangement in respect of a digital asset that is deemed to be a securities transaction, our business, financial condition and results of operations would be adversely impacted, as they would to the extent we earn revenues from transacting or facilitating transactions in that digital asset. Depending on which digital asset or activities are impacted, these adverse impacts could be material to us and to the market price of our Class A common stock. A determination that a digital asset is a “security,” or a “security-based swap,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could have adverse regulatory consequences for us, and could therefore adversely impact our business, financial condition and results of operations as well as the market price of our Class A common stock. In addition to the potential for adverse consequences to our business, financial condition and results of operations described under “—A determination that a digital asset is a “security,” or that an activity in which we engage involves a “securities transaction” for purposes of the federal securities laws could adversely affect the value of that digital asset and potentially digital assets generally, and could therefore adversely impact our business, financial condition and results of operations as well as the market price of our Class A common stock,” the classification of a digital asset as a security under the federal securities laws has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, clearing and holding of such assets. In 2023, the SEC brought the Coinbase Complaint, the Binance Complaint and the Kraken Complaint, alleging that a number of digital assets are securities and that, as a result, each had failed to register with the SEC in a number of capacities as required under the federal securities laws. Although as noted above, the litigation against Binance, Coinbase, and Kraken has been stayed or dismissed in the days following the complaints, one of the digital asset trading platform’s publicly traded stock price fell by 10%. Although we take these implications into account for those digital assets that we treat as securities for federal securities law purposes, for a digital asset that we previously treated as not being a security for federal securities law purposes, these implications could include the following, any of which could have adverse consequences to our business, financial condition and results of operations as well as the market price of our Class A common stock: • Liability for participating in unregistered securities offerings. In the United States, securities generally may not be offered or sold unless the offer or sale is registered with the SEC or an exemption from registration is available. If a digital asset or any of our transactions in or referencing digital assets is determined to be a security and we offered or sold that digital asset, or engaged in that digital asset transaction, without a valid exemption from SEC registration requirements, we could incur liability to purchasers as well as SEC monetary fines and other penalties, including restrictions on our ability to conduct business. • Liability for acting as an unregistered broker-dealer, national securities exchange or clearing agency. A person in the business of effecting transactions in securities or security-based swaps in the United States is generally subject to registration with the SEC as a “broker,” “dealer,” or “security-based swap dealer.” A platform that brings together purchasers and sellers to trade securities (or certain securities-related derivatives) in the United States is generally subject to registration as a national securities exchange or as a security-based swap execution facility, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system. A person that facilitates clearing and settlement of securities or that acts as a securities depository may be subject to registration with the SEC as a clearing agency. If a digital asset is determined to be a security and we transacted in that digital asset or engaged in a transaction referencing that digital asset in a manner implicating any of the foregoing SEC registration requirements or other related registrations without being so registered or without a valid registration exemption, we could incur SEC monetary fines and other penalties, including restrictions on our ability to conduct business. • Liability for operating as an unregistered investment company. A person in the business of investing in securities in the United States is subject to registration and regulation as an investment company under the Investment Company Act, unless a valid exemption from such registration applies. The laws and regulations applicable to 83 Table of Contents registered investment companies, including limitations on debt and other forms of leverage, restrictions on transactions with affiliates and other limitations on business activities generally make it impractical for an operating company such as us. If one or more digital assets is determined to be a security and we had been relying on such digital assets as not being securities for Investment Company Act purposes, we could incur SEC monetary fines and other penalties, including restrictions on our ability to conduct business. In addition, counterparties to contracts to which we are party could seek to avoid their obligations under those contracts on grounds that contracts with illegally unregistered investment companies are unenforceable. • Obligation to restructure our operations in order to avoid operating as an unregistered investment company. We intend to conduct our operations so that we will not be deemed to be an investment company under the Investment Company Act, If we determined that we risked becoming subject to registration as an investment company under the Investment Company Act, we would explore alternatives for avoiding this status, which may include disposing of digital asset securities, or one or more of our balance sheet venture investments, or acquiring businesses or assets that are not securities, and we may be required to effect such dispositions or acquisitions under unfavorable market conditions. See “—Risks Related to Our Organizational Structure and Ownership of our Class A Common Stock—If we are deemed to be an investment company under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.” • Liability for acting as an unregistered investment adviser. A person in the business of advising others, for compensation, with respect to securities in the United States or to U.S. clients is subject to registration and regulation as an investment adviser under the Advisers Act, unless a valid exemption from such registration applies. If a digital asset is determined to be a security and we advised clients as to that digital asset in a manner implicating Advisers Act registration requirements without being so registered or without a valid registration exemption, we could incur SEC monetary fines and other penalties, including restrictions on our ability to conduct business. Similar, though not identical, concerns would arise if a digital asset or a digital asset transaction is determined to be a security-based swap. We may be able to take steps in order to bring our operations into compliance with the federal securities laws following a determination that one or more digital assets in which we transact are securities or security-based swaps, but there is no guarantee that we would be able to take such actions as may be necessary to ensure that our future activities comply with applicable law, which could force us to discontinue some or all of our business activities. In general, any steps we are able to take in order to ensure future compliance with applicable laws would not insulate us from liability for past violations. While the above description of adverse regulatory consequences focuses on the federal securities laws, the various U.S. states and jurisdictions outside the United States also intensively regulate securities transactions, and so a U.S. state’s or other jurisdiction’s determination that a particular digital asset is a security or security-based swap could have similarly adverse consequences to our business, financial condition and results of operations as well as the market price of our Class A common stock. Our process for analyzing whether or not a particular digital asset is a security for purposes of the federal securities laws may not yield results that are consistent with subsequent determinations by the SEC or federal courts, or with similar determinations made by our competitors. We have procedures designed to analyze whether each digital asset that we seek to transact in or develop could be deemed to be a “security” under the federal securities laws. We have adapted our process for determining the federal securities law status of digital assets over time, as the specific steps in the process have evolved in light of the developing regulatory environment. Prior to 2018, our activities primarily involved Bitcoin and Ethereum and their various forks. Beginning in January 2018, we implemented a procedure whereby before transacting in a new digital asset, our trading desk would seek approval from the legal department; the legal department would generally discuss the digital asset with other Galaxy employees to determine whether the digital asset appeared to have a consumptive use, as opposed to a merely speculative investment use, and if so, approve it for transactions. Beginning in January 2019, our legal department introduced a New Product Approval form in order to standardize the process that was initiated the previous year, and responsibility for approving and categorizing new digital assets was assigned to a risk committee later renamed the “Token Committee” composed of senior executives, including members of the legal department, and advised by the legal department. The Token Committee is currently comprised of our President, Chief Financial Officer, Chief Operating Officer, General Counsel, Head of Trading, Head of Technology, Head of Research, Head of Operations, Chief Compliance Officer, Deputy Chief Compliance Officer and Deputy General Counsel. In August 2020, with the benefit of several months’ experience 84 Table of Contents using the Token Committee approval process, our legal department updated the New Product Approval form to more closely align with the analysis being conducted by the Token Committee with advice of the legal department. In August 2021, the Token Committee introduced an element to the approval process in addition to the New Product Approval form, generally requiring a third-party assessment of a digital asset’s federal securities law status, which may include a legal analysis prepared by external lawyers. In 2025, the process was further updated to also require an assessment as to whether a digital asset could be deemed a security under New York state securities laws. As part of our federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under the federal securities laws and federal court decisions interpreting elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases and their progeny, as well as reports, orders, press releases, public statements and speeches by the SEC, its commissioners and its staff providing guidance on when a digital asset may be a security for purposes of the federal securities laws. To the extent any such court rulings, reports, orders, press releases, public statements, speeches or other developments we become aware of implicate a digital asset that we have previously sorted into the “No Restrictions” category, we endeavor to reassess the federal securities law status of such digital asset. In certain circumstances, our categorization of particular digital assets has changed, and may in the future change, in light of new information. For example, if a digital asset in which we transact in the United States or with U.S. clients or counterparties were alleged to be a security in credible private litigation, an SEC enforcement order or in a statement or speech by an SEC official, we would consider any new findings of facts, legal analyses and other circumstances involving such digital asset that are relevant to whether such digital asset may be a security, and determine whether our classification of such digital asset should be modified. Conversely, certain digital assets that were once offered in a manner that led us to sort them into the “Non-U.S.” category (i.e., because they did not meet the criteria for inclusion in the “No Restrictions” category at the time of such determination), may later be re-analyzed based on developing facts and circumstances. Under certain circumstances, we may determine that we have reasonable grounds for concluding that such a digital asset is not a security under the federal securities laws, and re-categorize such digital asset into the “No Restrictions” category. We also evaluate any broader impact that such court rulings, reports, orders, press releases, public statements and speeches may have on our overall business strategy, in particular the scope of our trading business. We continue to monitor the U.S. and global regulatory environment, and we expect our process to continuously evolve to take into account case law, facts, and developments in technology, as regulatory guidance evolves. However, because of the inherent uncertainties associated with such an analysis, we acknowledge that a particular digital asset that we transact in or develop may in the future be found by a federal court or alleged by the SEC or a private plaintiff to be a security notwithstanding our prior conclusion, and such prior conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on the presence of a security. We recognize that the application of securities laws to the specific facts and circumstances of digital assets may be complex and subject to change and differing judicial opinions. We conduct a re-evaluation of our prior determinations regarding the federal securities law status of a digital asset in which we may transact when we become aware of new findings of facts or other changed circumstances implicating such digital asset, and a member of the Token Committee considers there to be a reasonable likelihood that such development could impact our prior determination with respect to the federal securities law status of such digital asset. In that event, we would re-evaluate such digital asset under our then-current procedures, taking into consideration such new development, before continuing to transact in such digital asset in a manner that would implicate our compliance with federal securities laws. We do not always re-examine our prior determinations regarding the federal securities law status of the digital assets in which we may transact solely because there has been an update or enhancement to our policies and procedures. Because of this, there is a possibility that a digital asset we have approved for trading under our prior policies and procedures might not gain approval under our policies and procedures as updated or enhanced. If we were to determine, as a result of a re-examination of our prior determination or otherwise, that a digital asset in which we have previously transacted on a “No Restrictions” basis is a security, we would take all actions that we deem necessary in order to comply with law, including but not limited to ceasing to trade such digital asset in the United States or with U.S. clients or counterparties. Because of complexities in applying the federal securities laws to digital assets and the fact that different companies doing business in the digital asset industry take varying approaches to digital asset analyses, we expect that competitors may reach different conclusions from us on the securities-law status of a particular digital asset or digital asset category. Although we anticipate that these differences will narrow over time as the SEC and federal courts address the securities-law status of larger numbers of individual digital assets, or as Congress enacts relevant legislation, until that occurs, where competitors conclude that they have the ability to transact in digital assets in ways that we do not permit because of these different conclusions, some competitors may have business and revenue opportunities that are not available to us. We believe that our process reflects a thoughtful analysis that is reasonably designed to facilitate consistent application of available legal guidance to digital assets to determine whether a particular digital asset is a security under the federal 85 Table of Contents security laws. However, we recognize that the application of securities laws to the specific facts and circumstances of digital asset transactions is complex and subject to change and differing judicial opinions, and therefore legal and regulatory risk will be an inherent feature of our business model until greater legal and regulatory certainty becomes possible. Because our process may be considered “risk based” in the sense that it is not capable of entirely eliminating risks associated with a particular digital asset being found to be a security and because it does not address a state-by-state securities law analysis, and because of the fact that our determinations (and similar determinations by other industry participants) are not binding upon the SEC, any state regulator or attorney general, a private plaintiff, or any federal or state court, we acknowledge that a particular digital asset that we transact in may in the future be found by a federal or state court or alleged by the SEC, a state regulator or attorney general, or a private plaintiff to be a security notwithstanding our prior determination. We also acknowledge that the SEC, any state regulator or attorney general, a private plaintiff, or any federal or state court may determine that a digital asset is a security based on factors that are difficult to predict and/or are outside of our control, potentially including the actions of a third-party promoter. In that case, our prior determination, even if reasonable under the circumstances, would not preclude legal or regulatory enforcement action, or lawsuits brought by our clients and counterparties, based on the presence of a security. Accordingly, we have received, and might in the future receive, from time to time, SEC inquiries regarding specific digital assets in which we transact. See “Item 1. Legal Proceedings” for more information. To the extent the SEC, a state regulator or attorney general, a private plaintiff or a court asserts or determines that any digital assets in which we transact are securities, that assertion or determination could prevent us from continuing to transact in such digital assets and could result in regulatory enforcement penalties, sanctions, injunctions, cease and desist orders, reputational harm and financial losses. If the SEC alleges that our non-custodial staking services involve unregistered offers and sales of securities or unregistered securities broker-dealer activity in violation of the Securities Act or the Exchange Act and the courts agree with the SEC, we may be required to cease our non-custodial staking activities and may be subject to monetary and other penalties. In several enforcement actions filed by the SEC under the prior administration in federal courts in New York, California, and Washington D.C., the SEC alleged that certain companies have offered staking services to retail customers for various digital assets as unregistered securities or acted as unregistered securities broker-dealers in facilitating offers or sales of third-party staking services in violation of the registration provisions of the Securities Act or the Exchange Act. For example, in 2023 the SEC charged Kraken, Coinbase and Binance with offering and selling digital asset staking-as-a-service programs to retail customers as unregistered investment contract schemes in violation of the Securities Act. In June 2024, the SEC charged Consensys Software Inc. with acting as an underwriter of unregistered securities in violation of the Securities Act and as an unregistered broker in violation of the Exchange Act by marketing the Lido and Rocket Pool third-party liquid staking-as-a-service programs to retail customers through Consensys’ “Metamask Staking” platform. As noted above, the litigation against Binance, Coinbase, and Kraken has been stayed or dismissed, as has the litigation against Consensys. We believe that our non-custodial staking businesses do not offer or sell any “securities” subject to the securities laws or SEC regulations and that they would in any event qualify for exemptions from Securities Act or Exchange Act requirements. For example, we believe our provision of non-custodial staking validator node infrastructure to accredited investors through privately arranged transactions and our operation of back-end validator node support to third-party staking operations such as Lido do not fall within the purview of the securities laws or SEC regulations, and that even if they did, they would qualify for one or more exemptions from those laws or regulations. However, we do not know if the SEC will agree with our interpretation of those laws or regulations, or if we will be successful if we seek relief from the courts. If the SEC or a private litigant were to prevail on claims that our non-custodial staking businesses violate the Securities Act or Exchange Act, we may be subject to monetary penalties, liabilities, reputational harm, and may be required to cease offering these services. We may suffer losses due to staking, delegating, and other related services. Blockchain networks which utilize PoS or similar consensus mechanisms to validate transactions enable holders of certain digital assets to stake or delegate those assets with validator nodes to secure the network and participate in transaction validation activities on their underlying blockchain networks. We currently stake certain digital assets and operate validator nodes on blockchain networks through our blockchain infrastructure operations. Some PoS networks require the digital assets to be transferred on the underlying blockchain networks into smart contracts which are not under our or anyone’s control, or to a validator node directly, to participate in staking. Other PoS networks enable users to delegate certain rights or powers associated with the relevant digital assets to a validator node, while custody of the digital asset itself remains entirely with the user. If our validator nodes or relevant smart contracts fail to behave as expected, suffer cybersecurity attacks, experience security issues, or encounter other problems, our or our clients’ digital assets may be irretrievably lost. In addition, most PoS blockchain networks dictate requirements for participation in the relevant staking activity, such as requiring a minimum amount of staked digital assets before being able to operate as a validator 86 Table of Contents node. If those requirements are not met, the blockchain network or other validator nodes may impose penalties, referred to as “slashing,” such as if the validator node operator acts maliciously on the network, “double signs” any transactions, or experiences extended downtimes. Slashing penalties can also apply due to prolonged inactivity on a blockchain network and inadvertent errors such as coding, computing or hardware issues, as well as more serious behavior such as intentional malfeasance. If Galaxy-operated validator nodes or any other validator nodes that we may use are subject to slashing in the future in accordance with the rules of an underlying blockchain network, our or our clients’ staked digital assets may be confiscated, withdrawn, or burnt by the network, resulting in permanent losses. Any loss of digital assets, penalties or slashing events could damage our brand and reputation, cause us to suffer financial losses, and adversely impact our business. We are highly dependent on our key personnel, including our Founder, which exposes stockholders to material and unpredictable “key man” risk. We are highly dependent on the services of our senior management team, including members of our executive team, and other key employees and personnel across product, engineering, risk management, compliance and legal, finance and marketing. Because we operate in a relatively new industry that requires highly skilled and technical personnel, our future success is highly dependent on the talents and contributions of our senior management and other key personnel. The loss of any such key personnel could disrupt our operations and have a material adverse effect on our business. In particular, we are highly dependent on the services of Michael Novogratz, our Founder, CEO and, through his direct and indirect ownership, the largest beneficial owner of our Class A common stock, for conducting our businesses, implementing investment and trading strategies and establishing and maintaining relationships with key business counterparties. If the services of our Founder were to become unavailable for any reason including a voluntary decision by our Founder to no longer continue with the business, it would have a material adverse effect on our business and investment decisions, financial results and returns to our stockholders. Our Founder, other members of senior management or other key personnel could engage in activities outside of Galaxy or could leave their positions at Galaxy in favor of other pursuits. Neither our Founder nor any other key personnel are contractually required to continue to provide services to us. While all of our key personnel have entered into employment agreements with us which contain covenants that they will not compete with us and applicable laws may prevent such personnel from engaging in certain directly competitive activities to the extent that they are members of our board of directors, such laws will not guarantee to stockholders that such personnel will devote their full time, attention or efforts to us. For example, if our Founder were to cease to provide services to us, he could engage in other pursuits, which may relate to digital assets or investing, while remaining our largest and generally controlling owner, an outcome that may be unfavorable to stockholders. Our Founder may also continue to manage significant non-digital assets outside of us, which may consume some of his time, attention and efforts. Our Founder’s public profile makes it more likely that we will attract material regulatory scrutiny, which would be costly and distracting regardless of whether we have engaged in any unlawful conduct. Our Founder has been a vocal and visible proponent of digital assets, in some cases attracting controversy in connection with his views and statements as expressed on social media or otherwise. Further, due to our Founder’s public profile, his views, statements and conduct could be subject to scrutiny by both the public at large and governmental and regulatory bodies, which could adversely affect our business and our reputation. These considerations make it foreseeable that we could attract material regulatory scrutiny driven in part by the visibility of our Founder, irrespective of whether we have engaged in any unlawful conduct. Regulatory scrutiny may take the form of requests for information or responses, examinations, meetings or other types of interactions that may proceed to a formal enforcement action, suit, fine or other formal negative sanction, consume a material amount of management’s time, attention and efforts, lead to material spending on legal and other advisors or cause other negative consequences (including, for example, certain of the matters discussed under “Item 1. Legal Proceedings.”). If we fail to develop, maintain and enhance our brand and reputation, our business operating results and financial condition may be adversely affected. Our brand and reputation are key assets and a competitive advantage, and maintaining a strong brand and reputation will be an important factor in our success and our development of our business. Protecting and enhancing our brand depends largely on the success of our marketing efforts, ability to provide consistent, high-quality, and secure products, services, features, and support. Thus, maintaining, protecting, and enhancing our reputation is also important to our development plans and relationships with our partners and counterparties. Furthermore, we believe that the importance of our brand and reputation may increase as competition in the financial services industry, the digital asset industry and the AI 87 Table of Contents industry further intensifies. Our brand and reputation could be harmed if we fail to achieve these objectives or if our public image were to be tarnished by negative publicity, unexpected events, or actions by third parties. Unfavorable publicity regarding, for example, the quality of or changes to our products and services, litigation or regulatory activity, privacy practices, data security compromises or breaches, terms of service, intellectual property matters, employment matters, the use of our products, services, or supported digital assets for illicit or objectionable ends, the actions of our clients, customers, employees, or the actions of other companies that provide similar services to ours, has in the past, and could in the future, adversely affect our reputation and our business. We receive a high degree of media coverage in the industries in which we operate and around the world. Additionally, because we are a founder-led company, actions by, or unfavorable publicity about our Founder, may adversely impact our brand and reputation. Such negative publicity also could have an adverse effect on the size and engagement of our customers and could result in decreased revenue, which could have an adverse effect on our business, operating results, and financial condition. Further, we may in the future be the target of social media campaigns criticizing actual or perceived actions or inactions that are disfavored by our customers, employees, or society at-large, which campaigns could materially impact our customers’ decisions to engage with our products and services. More broadly, because the digital asset, blockchain technology and AI sectors are relatively nascent, public opinion is underdeveloped and will continue to evolve over time. For example, there has been focus on the environmental, social and governance considerations regarding the use of electricity and other resources for digital asset mining operations. The same environmental considerations are also applicable to AI/HPC. Public debate regarding the regulation of all facets of the digital asset sector will continue to take shape as regulators and lawmakers make their positions known. Moreover, in 2022, each of Celsius Networks, Voyager Digital, Three Arrows Capital and FTX declared bankruptcy. In particular, in November 2022, FTX—which was at the time one of the world’s largest and most popular digital asset trading platforms—became insolvent, and it was revealed that the platform had been misusing customer assets, resulting in a loss of confidence in participants of the cryptoeconomy and negative publicity surrounding crypto more broadly. Additionally, in February 2025, the digital asset trading platform Bybit lost approximately $1.5 billion in ether through a hacker-induced transfer from its cold wallet to a wallet address associated with the Lazarus Group. Unfavorable media coverage in relation to the cryptoeconomy, including the societal impact of digital assets and the infrastructure that supports them and/or the viability of any particular cryptocurrency, digital asset trading platform, or firm engaged in digital asset-related businesses, could have a cascading impact on digital assets as an investable asset class, or even the cryptoeconomy at large, and adversely impact our business, our operating results and the value of any investment in us. If we fail to protect our brand image or reputation, we may experience material adverse effects to the size, demographics, engagement, and loyalty of our customers and counterparties, resulting in decreased revenue. In addition, if securities analysts or investors perceive any media coverage of us, or of the industries in which we operate more broadly, to be negative, the price of our Class A common stock may be adversely affected. Any such negative publicity could have an adverse effect on the size, activity, and loyalty of our customers and counterparties, and result in a decrease in revenue, which could adversely affect our business, operating results, and financial condition. See “—Risks Related to Cryptocurrencies and Digital Assets—Due to a lack of familiarity and some negative publicity associated with digital asset trading platforms, existing and potential customers, counterparties and regulators may lose confidence in digital asset trading platforms” and “—Risks Related to Our Business Lines—Our strategy to expand into the AI/HPC data center business may not be successful and may result in adverse consequences to our business, financial condition and results of operations” for further discussion of these risks. If we are unable to successfully identify, hire and retain qualified individuals, we will not be able to implement our growth strategy successfully. Our future success depends on the continuing efforts of our key employees and our ability to attract and retain highly skilled personnel and senior management. We currently depend on the continued services and performance of our key personnel, including our Founder. Our growth strategy is based, in part, on our ability to attract and retain highly qualified individuals. Competition presented by other firms may create difficulty for us in recruiting and retaining professionals of a caliber consistent with our business strategy. If we are unable to successfully identify hire, develop, motivate and retain qualified professionals, this failure could materially and adversely affect our investment and trading strategies, the value of our assets and the value of any investment in us. If one or more of our executive officers or key employees were unable or unwilling to continue their employment with us, we might not be able to replace them easily, in a timely manner, or at all. The risk that competitors or other companies may poach our talent increases as we continue to build our brands and become more well-known. Our key personnel have been, and may continue to be, subject to poaching efforts by our competitors and other fintech, internet and high-growth companies, including well-capitalized players in the digital asset 88 Table of Contents space. The loss of key personnel, including members of management as well as key engineering, product development, marketing, and sales personnel, could disrupt our operations and have a material adverse effect on our business. The success of our brand also depends on the commitment of our key personnel to our mission. To the extent that any of our key personnel act in a way that does not align with our mission, our reputation could be materially adversely affected. Our future success will depend upon our continued ability to identify, hire, develop, motivate and retain highly skilled individuals across the globe, with the continued contributions of our senior management being especially critical to our success. Competition for well-qualified, highly skilled employees in the industries in which we operate is intense and our continued ability to compete effectively depends, in part, upon our ability to attract and retain new employees. While we have established programs to attract new employees and provide incentives to retain existing employees, particularly our senior management, we cannot guarantee that we will be able to attract new employees or retain the services of our senior management or any other key employees in the future. Additionally, we believe that our culture and core values have been, and will continue to be, a key contributor to our success and our ability to foster the innovation, creativity and teamwork we believe we need to support our operations. If we fail to effectively manage our hiring needs and successfully integrate our new hires, or if we fail to effectively manage remote work arrangements, our efficiency and ability to meet our forecasts and our ability to maintain our culture, employee morale, productivity and retention could suffer, and our business, financial condition and results of operations could be materially adversely affected. We operate in highly competitive industries and we compete against unregulated or less regulated companies and companies with greater financial and other resources, and our business, operating results, and financial condition may be adversely affected if we are unable to respond to our competitors effectively. Both the cryptoeconomy and the AI economy are highly innovative, rapidly evolving, and characterized by healthy competition, experimentation, changing customer needs, frequent introductions of new products and services, and subject to uncertain and evolving industry and regulatory requirements. We expect competition to further intensify in the future as existing and new competitors introduce new products or enhance existing products. We compete against a number of companies operating both within the United States and abroad, and both those that focus on traditional financial services, those that focus on crypto-based services and those that focus on AI/HPC-based services. Our competitive landscape is varied across two operating business segments: Digital Assets, which includes our Global Markets and Asset Management & Infrastructure Solutions businesses, and Data Centers, which includes our scalable high performance computing infrastructure. Digital Assets : Our Digital Assets operating business segment integrates trading, investment banking, asset management, and staking services, which compete with a diverse array of traditional and decentralized market participants. Data Centers : Our Data Centers operating business segment competes with a range of infrastructure providers that are building or repurposing facilities to support the rapidly growing demand for AI and compute-intensive workloads. This includes traditional data center operators expanding into HPC, cloud infrastructure providers scaling capacity, and former crypto mining operators pivoting to meet the needs of AI workloads. We believe our primary source of competition to date has been from companies, in particular those located outside the United States, who are either subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions or have interpreted the regulatory requirements to which they are subject in a manner that is different from our interpretation. Some of such companies’ business models rely on being unregulated or only regulated in a small number of lower compliance jurisdictions, whilst also offering their products in highly regulated jurisdictions, including the United States, without necessarily complying with the relevant regulatory requirements in such jurisdictions. To date, encouraged by limited but growing enforcement by U.S. and foreign regulators, many of these competitors have been able to operate from offshore while offering large numbers of products and services to consumers, including in the United States, Europe, and other highly regulated jurisdictions, without complying with the relevant licensing and other requirements in these jurisdictions, and seemingly without penalty. Due to our regulated status in several jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and services, including products and services that our unregulated or less regulated competitors are able to offer to a group that includes many of our customers, which may adversely impact our business, financial condition, and results of operations. In recent years, our commitment to compliance and the attendant customer-facing requirements, including customer due diligence requirements, may have had a competitive impact on us as these unregulated or less compliance-focused competitors have attracted more business. We also have expended significant managerial, operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions in which we 89 Table of Contents operate, and expect to continue to incur significant costs to comply with these requirements, which these unregulated or less regulated competitors have not had to incur. Additionally, due to the broad nature of our products and services, we also compete with, and expect additional competition from, traditional financial services companies. We also face competition from companies that may target a wider range of customers, including retail customers, which could result in such competitors gaining broader recognition and market acceptance relative to our primarily institutional customer approach. The rapid pace of blockchain and AI innovation means that new products are constantly emerging. Keeping pace will require investment in technology adoption and development. Many innovative start-up companies and larger companies have made, and continue to make, significant investments in research and development, and we expect these companies to continue to develop similar or superior products and technologies that compete with our products. Further, more traditional financial and non-financial services businesses may choose to offer crypto-based services in the future as the digital assets industry grows and as greater legal and regulatory certainty emerges. Our current and potential competitors may establish cooperative relationships among themselves or with third parties that may further enhance their resources, or may otherwise have certain competitive advantages over us. Our existing competitors have, and our potential competitors are expected to have, competitive advantages over us, such as: • the ability to offer products and services that we do not support or offer (due to constraints from regulatory authorities, our banking partners, and other factors); • greater name recognition, longer operating histories, larger customer bases, and larger market shares; • larger sales and marketing budgets and organizations; • more established marketing, banking, and compliance relationships; • greater customer support resources; • greater resources to make acquisitions; • lower labor, compliance, risk mitigation, and research and development costs; • larger and more mature intellectual property portfolios; • greater number of applicable licenses or similar authorizations; • established core business models outside of the industries that we operate in, allowing them to operate on lesser margins or at a loss; • operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; • substantially greater financial, technical, and other resources; • more efficient hardware; • greater data center capabilities (for example, through adoption of proprietary technology); • more timely introduction of new technologies; • preferred relationships with suppliers, including of hardware for HPC solutions and other equipment; • better access to more competitively priced power; • greater reliability in electricity supply and cooling resources, whether as a result of a greater number of backup sources of power or otherwise; and • more reliable internet connections as a result of the location of their data centers to key internet connections. If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results, and financial condition could be adversely affected. 90 Table of Contents Due to the unregulated nature and lack of transparency surrounding the operations of many digital asset trading platforms, they may experience fraud, security failures or operational problems, which may adversely affect the value of digital assets traded on those digital asset trading platforms and decentralized finance protocols and, consequently, our investments and our Class A common stock. Digital asset trading platforms and decentralized finance protocols are relatively new and, in some cases, unregulated. Furthermore, while some digital asset trading platforms provide information regarding their ownership structure, management teams, private key management, hot/cold storage policies, capitalization, corporate practices and regulatory compliance, many other digital asset trading platforms do not. A lack of transparency provided could result in us underestimating the risk of a potential loss in balances, which could include the loss of a material portion of the value of the digital assets we own or invest in on such digital asset trading platforms. Digital asset trading platforms do not appear to be subject to regulation in a similar manner as other regulated trading platforms, such as national securities exchanges or designated contract markets. As a result, the marketplace may lose confidence in the less transparent or unregulated digital asset trading platforms, including prominent digital asset trading platforms that handle a significant volume of trading in these assets. Many digital asset trading platforms are unlicensed, unregulated, operate without extensive supervision by governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. In particular, those located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. As a result, trading activity on or reported by these digital asset trading platforms is generally significantly less regulated than trading in regulated U.S. securities and derivatives markets, and may reflect behavior that would be prohibited in regulated U.S. trading venues. Additionally, some of these non-U.S. digital asset trading platforms offer customers high leverage and/or a small or no insurance fund, which could result in potential losses being socialized to customers and a reduction in the value of our assets on digital asset trading platform. We do not insure the digital assets that we hold. While our third-party custodians have indicated to us that they maintain insurance coverage that is intended to cover losses of the digital assets they custody on behalf of their clients to some extent, there can be no assurance that the loss of any digital asset is at all or fully insured against, and we may have limited rights of legal recourse in the event of loss caused by a third party. Consequently, a loss may be suffered with respect to our digital assets that is not covered by insurance and for which no person is liable for damages. For example, in 2021 there were reports claiming that over 70% of bitcoin trading volume on digital asset trading platforms was falsified or non-economic in nature, with specific focus on unregulated digital asset trading platforms located outside of the United States. Such reports may indicate that the bitcoin exchange market is significantly smaller than expected and that the United States makes up a significantly larger percentage of such market than is commonly understood. Nonetheless, any actual or perceived false trading in digital asset trading platforms, and any other fraudulent or manipulative acts and practices, could adversely affect the value of digital assets and/or negatively affect the market perception of such assets. Further, a number of digital asset trading platforms, including certain digital asset trading platforms with which we engage, do not obtain or perform comprehensive Services Organization Controls (“SOC”) 1 and SOC 2 evaluations of their systems on a regular basis, if at all. SOC 1 evaluations of a digital asset trading platform assess whether transactions are properly secured and segregated, and that the information provided to traders and investors is complete, accurate and timely. SOC 2 evaluations assess the design and implementation of a digital asset trading platform’s security, availability, and confidentiality controls. Moreover, there are two types of such SOC evaluations: type 1 evaluates the processes at a particular point in time, while type 2 evaluations can test that the system controls across both the platform and its custody products, if applicable, have been operating effectively over a period of time. If digital asset trading platforms do not perform SOC evaluations, we may be unable to confirm that such platforms’ financial reporting is accurate or whether it has taken proper steps to secure its information technology infrastructure against internal and external threats, which could expose us to additional risks that may have been identified and remediated had such platforms obtained or performed SOC evaluation. Engaging with such digital asset trading platforms and decentralized finance protocols could materially impact our reputation and the actual or perceived security of our investments. Any engagement with digital asset trading platforms that do not obtain or perform SOC examinations exposes us to greater risks than companies that engage solely with digital asset trading platforms that maintain thorough SOC examination processes. As of March 31, 2025, we held approximately $531.4 million in digital assets at digital asset trading platforms and decentralized finance protocols or custodians that do not have systems or organization control reporting available. In addition, over the past several years, some digital asset trading platforms have been closed due to fraud and manipulative activity, business failure or security breaches. In many of these instances, the customers of such digital asset trading platforms were not compensated or made whole for the partial or complete losses of their account balances or were made whole in dollar terms that did not enable customers to benefit from the market value growth of the original digital asset balances. For example, in November 2022, FTX—which was at the time one of the world’s largest and most popular digital asset trading platforms—became insolvent, and it was revealed that 91 Table of Contents the platform had been misusing customer assets. While smaller digital asset trading platforms are less likely to have the infrastructure and capitalization that make larger digital asset trading platforms more stable, larger digital asset trading platforms are more likely to be appealing targets for hackers and malware and may be more likely to be targets of regulatory enforcement action. Negative perception, a lack of stability in these digital asset trading platforms, fraud or misconduct, and the temporary or permanent closure of such trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in the digital asset marketplace in general and result in a reduction in the value of our assets and greater volatility in the price of digital assets (including bitcoin), as well as increase scrutiny on our activities and increase the likelihood of unfavorable government regulation and the risks of litigation against us. These potential consequences could materially and adversely affect the profitability of our bitcoin mining operations, our investment and trading strategies, the value of our assets and the value of any investment in us and, therefore, the market price of our Class A common stock. In the event that our employees, contractors or any of our affiliates engage in misconduct or commit errors, it may materially adversely impact our business, operating results and our reputation. Misconduct or error by our employees or our business partners could subject us to legal liability, financial losses, and regulatory sanctions and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation of customer funds, insider trading and misappropriation of information, failing to supervise other employees or service providers, improperly using confidential information, as well as improper trading activity such as spoofing, layering, wash trading, manipulation and front-running. Galaxy’s reputation is critical to maintaining and developing relationships with existing and prospective investors, as well as the numerous third parties with which the Company or a client does business. In recent years, there have been a number of highly publicized cases involving fraud, conflicts of interest or other misconduct by individuals in the financial services industry, and in particular the digital assets sector, and there is a risk that an employee of or contractor to the Company or any of its affiliates could engage in misconduct that adversely affects the investment strategies implemented by the Company, or that an employee or contractor of a service provider could engage in such misconduct. It is not always possible to deter such misconduct, and the precautions the Company (or any service provider) takes to detect and prevent such misconduct may not be effective in all cases. Misconduct by such individuals, or even unsubstantiated allegations of such misconduct, could result in both direct financial harm to the Company and a client, as well as harm to the reputations of the Company and the client, or, in certain circumstances, lead to increased skepticism of the digital asset markets generally, which would have a materially adverse effect on a client. The inappropriate and/or unauthorized use of social media platforms, including weblogs (or blogs), social media websites and other forms of internet-based communications, which allow individuals access to a broad audience of consumers and other interested persons by our clients or employees could increase our costs, cause damage to our brand, lead to litigation or result in information leakage. In addition, negative or inaccurate posts or comments about us on any social networking platforms could damage our reputation, brand image and goodwill. Despite our efforts to clearly define our mission and strategy and accurately characterize our products and service offerings, our employees, contractors or affiliates may engage in activities either in their official capacity as members of the Galaxy ecosystem, or in their unofficial capacities, that are in conflict with or are incongruent with Galaxy’s values, positions or strategies. Any instance of such discontinuity could negatively impact our client and/or counterparty relationships, our reputation and the market price of our Class A common stock or otherwise have a materially adverse effect on a client. Employee or service provider errors, including mistakes in executing, recording, or processing transactions for customers, could expose us to the risk of material losses even if the errors are detected. Although we have implemented processes and procedures and provide trainings to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be successful. There may be confusion among employees, business partners and service providers, particularly in a fast growth company like ours, with respect to compliance obligations, particularly including confidentiality, data access, trading, and conflicts. Moreover, we frequently engage in a wide variety of transactions and maintain relationships with a significant number of projects in the industries in which we operate, including the blockchain technology sector, their developers, members of their ecosystem, and investors. These transactions and relationships could create potential conflicts of interest in management decisions that we make. For instance, certain of our officers, directors, and employees may be active investors in crypto projects themselves, and may make investment decisions in respect of projects that they have personally invested in. 92 Table of Contents It is not always possible to deter misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. If we were found to have not met our regulatory oversight and compliance and other obligations, we could be subject to regulatory sanctions, financial penalties, and restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity and seriously damage our reputation. Our employees, contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper trading activities could affect our brand, reputation and credibility of our Company may be adversely affected. We or our subsidiaries and affiliates are and may continue to be subject to substantial litigation, including individual and class action lawsuits, and regulatory risks. We may be party to lawsuits and legal proceedings in the ordinary course of business. These matters are often expensive and disruptive to normal business operations. We have faced, currently face, and may from time to time face allegations, lawsuits, regulatory inquiries, actions, requests, audits or investigations including with regards to contractual disputes with our business partners and other service providers, disputes with our clients and customers, disputes with our employees, agents or affiliates and data privacy, data security, or intellectual property infringement disputes. As an enterprise whose material business lines include financial services, we or our subsidiaries and affiliates, depend to a significant extent on our relationships with our clients and counterparties and our reputation for integrity and high-caliber professional services. As a result, if a client is not satisfied with our services, a counterparty has a dispute or if there are allegations of improper conduct by private litigants or regulators, whether the ultimate outcome is favorable or unfavorable to us, or if there is negative publicity and press speculation about us, whether or not valid, our reputation may be harmed and may be more damaging to our businesses than to businesses in other non-financial industries. We or our subsidiaries and affiliates have been and could be the subject of any number of inquiries, investigations, lawsuits and proceedings by counterparties, clients, other third parties and regulatory and other governmental agencies in the United States and abroad, which could lead to increased expenses and harm to our reputation, business, financial condition and the market price of our Class A common stock. Responding to inquiries, investigations, lawsuits and proceedings, regardless of the ultimate outcome of the matter, is time-consuming and expensive and can divert the attention of senior management. Adverse outcomes with respect to allegations, lawsuits, regulatory inquiries, audits, or investigations may result in significant settlement costs or judgments, penalties and fines, or require us to modify our services or require us to stop serving certain customers or geographies, any of which could negatively impact our business. The outcome of such proceedings, and the related expenses, may be difficult to predict or estimate until late in the proceedings, which may last a number of years and be costly for us to maintain. For example, in December 2022, a proposed class action was filed in the Ontario Superior Court of Justice against GDH Ltd., our Chief Executive Officer and our former Chief Financial Officer asserting various claims including alleged misrepresentations relating to our public disclosure regarding investments and trading in the LUNA digital asset. The class action seeks unspecified damages and various declaratory relief, including leave to proceed with the right of action for misrepresentation under statutory securities provisions. These proceedings are still in early stages and have not been certified to proceed as a class action. In addition, on March 27, 2025, Galaxy reached an agreement with the New York State Attorney General to resolve certain civil claims relating to certain investments, trading, and public statements made in connection with the LUNA digital asset from late 2020 to 2022. Under the terms of the settlement, Galaxy (i) accrued a legal provision of $186.3 million as of March 31, 2025 (the undiscounted amount of which is $200 million, payable on a pre-determined schedule over the course of four years) and (ii) has agreed to, among other things, compliance enhancements related to public statements about cryptocurrency and purchases and sales of cryptocurrency. If Galaxy fails to comply with the terms of that agreement or violates applicable laws, the office of the New York State Attorney General may commence a subsequent investigation, civil action, or proceeding to enforce the agreement, for violations of the agreement, or for other violations, which may result in further settlement costs or judgments, penalties and fines, or require us to modify our services or require us to stop serving certain customers or geographies, any of which could negatively impact our business. Further, the agreement with the New York State Attorney General may have an impact on other current or contemplated litigation. The agreement may also result in stricter oversight or scrutiny of our business and operations by other regulators (in the form of further allegations, lawsuits, regulatory inquiries, actions, requests, audits or investigations). The scope, determination, and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted with certainty, and may result in: 93 Table of Contents • substantial payments to satisfy judgments, fines, or penalties; • substantial outside counsel legal, advisor and consultant fees and costs; • additional compliance and licensure requirements; • the imposition of independent monitors or consultants; • loss or non-renewal of existing licenses or authorizations, or prohibition from or delays in obtaining additional licenses or authorizations, required for our business; • loss of our ability to conduct business in certain jurisdictions; • increased regulatory scrutiny of our business; • loss of productivity and high demands on employee time; • criminal sanctions or consent decrees; • termination of certain employees, including members of our executive team; • barring of certain employees from participating in our business in whole or in part; • orders that restrict our business or prevent us from offering certain products or services; • changes to our business model and practices; • delays to planned transactions, product launches or improvements; and • damage to our brand and reputation. Certain of our subsidiaries are subject to periodic examination by regulatory authorities. If compliance failures or other violations are found during an examination, a regulatory agency could initiate actions and impose sanctions for violations, including, for example, regulatory agreements, cease and desist orders, civil monetary penalties or termination of a license and could lead to litigation by investors or clients, any of which could adversely impact us. If we and/or any governmental agency believe that we have accepted capital contributions by, or are otherwise holding assets of, any person or entity that is acting directly or indirectly, in violation of U.S., international or other anti-money laundering laws, rules, regulations, treaties or other restrictions, or on behalf of any suspected terrorist or terrorist organization, suspected drug trafficker or senior foreign political figure(s) suspected in engaging in foreign corruption, we and/or such governmental agency may “freeze the assets” of such person or entity. We may also be required to report and remit or transfer those assets to a governmental agency. We are also subject to the risk of claims under applicable U.S. securities laws. Volatility in our stock price increases the risk of such claims. Actions against us could be brought by sizable classes of customers who may claim large monetary damages, even if the alleged per-customer harm is small or non-existent. Regardless of the outcome, any such matters can have an adverse impact, which may be material, on our business, operating results, or financial condition because of legal costs, diversion of management resources, reputational damage, and other factors. For more information about litigation matters and other regulatory and legal proceedings in which we are involved, see “Item 1. Legal Proceedings.” If we cannot keep pace with rapid industry changes to provide new and innovative products and services, the use of our products and services, and consequently our revenue, could decline, which could adversely impact our business, operating results, and financial condition. The industries in which we operate have been characterized by many rapid, significant, and disruptive products and services in recent years. These include decentralized applications, which allow yield farming, staking, token wrapping, governance tokens, innovative programs to attract customers such as transaction fee mining programs, initiatives to attract traders such as trading competitions, airdrops and giveaways, staking reward programs, and novel cryptocurrency fundraising and distribution schemes. We expect new services and technologies to continue to emerge and evolve, which may be superior to, or render obsolete, the products and services that we currently provide. We cannot predict the effects of new services and technologies on our business. However, our ability to grow our customer base and revenue will depend in 94 Table of Contents part on our ability to innovate and create successful new products and services, both independently and in conjunction with third parties. In particular, developing and incorporating new products and services into our business may require substantial expenditures, take considerable time, and ultimately may not be successful. Any new products or services could fail to attract customers, generate revenue, or perform or integrate well with third-party applications and platforms. In addition, our ability to adapt and compete with new products and services may be inhibited by regulatory requirements and general uncertainty in the law, constraints by our banking partners and payment processors, third-party intellectual property rights, or other factors. Moreover, we must continue to enhance our technical infrastructure and other technology offerings to remain competitive and maintain a platform that has the required functionality, performance, capacity, security, and speed to attract and retain customers. We are entering into the AI/HPC data center market, and as a result, we expect to expend significant costs and expenses to develop and upgrade our technical infrastructure to meet the evolving needs of the industry, including in connection with the conversion of our Helios mining campus to AI/HPC data center infrastructure and operations. Our success will depend on our ability to develop and incorporate new offerings and adapt to technological changes and evolving industry practices. If we are unable to do so in a timely or cost-effective manner, our business and our ability to successfully compete, retain existing customers, and attract new customers may be adversely affected. We are exposed to a concentration of assets in a particular asset class, which could increase volatility, investment and market risk. We primarily trade, invest, advise on and hold digital assets and investments in the blockchain space and conduct related businesses. We may accumulate significant positions in, or otherwise have significant exposure to, a single digital asset or asset type. If we choose to invest in concentrated positions, we could increase the volatility of investment results over time and exacerbate the risk that a loss in any position would have a material and adverse effect on our investment and trading strategies, the value of our assets and the value of any investment in us. We are exposed to significant market risk based on our positions in digital assets, securities, commodities and other assets. The prices or values of digital and non-digital assets in which we may invest or trade have been, and likely will continue to be, highly volatile. We are also subject to the risk of loss of any cash or digital assets that we hold on digital asset trading platforms. For example, on November 8, 2022, FTX, a digital asset trading platform on which we held cash and digital assets, suspended customer withdrawals. FTX subsequently filed for Chapter 11 bankruptcy protection on November 11, 2022. As of December 31, 2022, we had a net loss of approximately $68 million related to our previously disclosed FTX exposure. The Company subsequently repurchased its FTX bankruptcy claims for $18.5 million and recorded unrealized gains of $26.4 million during the year ended December 31, 2023. We divested these claims during the year ended December 31, 2024. Events such as these within the digital asset industry are continuing to develop and it is not possible to predict at this time all of the risks that they may pose to Galaxy, our service providers or to the digital asset industry as a whole. Sustained market declines and periods of significant market volatility may limit our ability to produce positive investment and trading results, and there can be no assurance that our strategies will be successful in the markets and assets in which we invest or trade. Our business relies on third-party service providers and subjects us to risks that we may not be able to control or remediate . Our operations could be interrupted if our third-party service providers experience operational or other systems difficulties, terminate their services or fail to comply with regulations. We outsource some of our operational activities and accordingly depend on relationships with many third-party service providers. Specifically, we rely on third parties for certain services, including, but not limited to, legal, accounting, custodying and other financial operations, trade related activity, IT infrastructure and systems, trade reconciliation, and margin and collateral movement. Our business depends on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party service providers. The failure of these systems, a cybersecurity breach involving any of our third-party service providers or the termination or change in terms of a third-party software license or service agreement on which any of these systems is based could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions. Replacing vendors or addressing other issues with our third-party service providers could entail significant delay, expense and disruption of service. As a result, if these third-party service providers experience difficulties, are subject to cybersecurity breaches, or terminate their services, and we are unable to replace them with other service providers, particularly on a timely basis, our operations could be interrupted. If an interruption were to continue for a significant period, our business, financial condition and results of operations could be adversely affected. Should we be required to replace third-party service providers, it may be at a higher cost to us, which could adversely affect our business, financial condition and results of operations. 95 Table of Contents We host certain of our mining equipment at third-party datacenters. The providers oversee maintenance, up-time and other important elements of mining productivity. There is a service agreement that guarantees hash rate performance and system up-time and contractual consequences if the hosts do not meet these requirements. To the extent that a host does not meet these requirements for extended periods of time, the revenue from this business could be less than anticipated. Additionally, to the extent power costs increase, it could affect the future profitability of the business. Unexpected market disruptions may cause major losses for us. We may incur major losses in the event of disrupted markets and other extraordinary events in which market behavior diverges significantly from historically recognized patterns. The risk of loss in such events may be compounded by the fact that in disrupted markets, many positions become illiquid, making it difficult or impossible to close out positions against which markets are moving. Market disruptions caused by unexpected political, military and terrorist events may from time to time cause dramatic losses for us. Any such disruptions and events may have a material and adverse effect on our investment and trading strategies and on any investment in us. Operational risk may materially and adversely affect our performance and results and we may not be effective in mitigating any such risk. Any issue or adverse circumstance surrounding our operational risks may have a material and adverse effect on our performance and results. Operational risk is the risk of an adverse outcome resulting from inadequate or failed internal processes, people, systems or from external events. Our exposure to operational risk arises from routine processing errors, as well as extraordinary incidents, such as major systems failures or legal and regulatory matters. As we operate trading, lending, investment and other businesses that are reliant on both technology and human expertise and execution, we are exposed to material operational risk arising from a number of factors, including, but not limited to, human error, processing and communication errors, errors of our service providers, counterparties or other third parties, failed or inadequate processes and technology or system failures. Digital asset transfers are typically not reversible without the consent and active participation of the recipient of the transaction. Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer or theft of digital assets generally will not be reversible and we may not be capable of seeking compensation for any such transfer or theft. Although we have processes and procedures in place to limit any such transfers, it is possible that, through computer or human error, or through theft or criminal action, our digital assets could be subject to these operations errors and transferred from our accounts in incorrect amounts, or to unauthorized third parties, or to uncontrolled accounts. To the extent that our business lines expand to include trust companies, custody services will expose us to greater risk of loss from irreversible operational errors, such as collateral transferred from a custody account in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts. Operational errors or significant operational delays could materially negatively impact our ability to conduct our business or service our clients, which could adversely affect results of operations due to potentially higher expenses and lower revenues, create liability for us or our clients or negatively impact our reputation. Recurring operational issues may raise concerns among regulators regarding our governance and control environment. We seek to mitigate risk and have established policies responsive to the types of risk to which we are subject, including operational risk, credit risk, market risk, counterparty risk, exchange risk and liquidity risk. However, there are inherent limitations to our current and future risk management strategies, including risks that we have not appropriately anticipated or identified. Accurate and timely enterprise-wide risk information is necessary to enhance management’s decision-making in times of crisis. If our risk management framework proves ineffective or if our enterprise-wide management information is incomplete or inaccurate, we could suffer unexpected losses, which could materially adversely affect our business, results of operations and financial condition. We continually assess our risk profile and risk management processes across the firm to identify opportunities for improvement and to consider whether we need to address new technologies and innovations in our risk management processes and policies. While we have not identified any material gaps with respect to recent digital asset market events, we cannot guarantee that our risk management processes will continue to be effective in preventing or mitigating losses from future market events. Our expansion into the AI/HPC data center business will require substantial additional capital. We may be unable to obtain additional financing for this or for other areas of business development on acceptable terms or at all. The conversion of our Helios campus or any future campus to AI/HPC data center development and operations will be capital-intensive projects that will require substantial additional capital to complete. Furthermore, continued development in other areas of our business may require additional financing. The failure to raise or procure such additional funds when needed or the failure to achieve or maintain positive cash flow could result in the delay or indefinite postponement of our 96 Table of Contents AI/HPC data center development or our other business objectives. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, will be on terms acceptable to us. If additional funds are raised by offering equity securities or equity-linked securities, existing shareholders could suffer significant dilution. We may require additional financing to fund our operations in certain periods until positive cash flow is achieved. We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful. Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Agreements relating to our future indebtedness may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to obtain proceeds in an amount sufficient to meet any debt service obligations then due. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under our indebtedness. If we cannot make scheduled payments on our debt, we will be in default and holders of our indebtedness could declare all outstanding principal and interest to be due and payable, and we could be forced into bankruptcy, liquidation or reorganization, and our assets would be used to satisfy obligations with respect to such indebtedness before any payment could be made to you as a holder of shares of our Class A common stock. In addition, we may incur substantial additional indebtedness, including secured indebtedness. The terms of the indentures governing the Exchangeable Notes do not restrict us from incurring additional indebtedness. If new debt or other liabilities are added to our current debt levels, the related risks could intensify. Because our long-term success depends, in part, on our ability to expand our sales to customers outside the United States, our business is susceptible to risks associated with international operations. We currently have subsidiaries and operations in jurisdictions such as the Cayman Islands, the U.K., Hong Kong, Canada, Israel, the Bahamas and Japan as well as the United States. We plan to enter into or increase our presence in additional markets around the world, and any inability or failure to adequately exploit opportunities for international expansion, may harm our business and our adversely affect our revenue. We have a limited operating history outside North America, and our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to particular challenges of supporting a rapidly growing business in an environment of diverse cultures, languages, customs, tax laws, legal systems, alternate dispute systems and regulatory systems. As we continue to expand our business and customer base outside the United States, we will be increasingly susceptible to risks associated with international operations. These risks and challenges include: • difficulty establishing and managing international operations and the increased operations, travel, infrastructure and legal and compliance costs associated with locations in different countries or regions; • the need to understand and comply with local laws, regulations and customs in multiple jurisdictions, including laws and regulations governing broker-dealer practices, some of which may be different from, or conflict with, those of other jurisdictions, and which might not permit us to operate our business or collect revenues in the same manner as we do in such other jurisdictions; • our interpretations of local laws and regulations, which may be subject to challenge by local regulators; • difficulties or delays in obtaining and/or maintaining the regulatory permissions, authorizations, licenses or consents that may be required to offer certain products in one or more international markets; • difficulties in managing multiple regulatory relationships across different jurisdictions on complex legal and regulatory matters; 97 Table of Contents • if we were to engage in any merger or acquisition activity internationally, this is complex and would be new for us and subject to additional regulatory scrutiny; • the need to vary products, pricing and margins to effectively compete in international markets; • the need to adapt and localize products for specific countries, including obtaining rights to third-party intellectual property used in each country; • increased competition from local providers of similar products and services; • the challenge of positioning our products and services to meet a demand in the local market (also known as “product-market fit”); • the ability to obtain, maintain, protect, defend and enforce intellectual property rights abroad; • the need to offer customer support and other aspects of our offering (including websites, articles, blog posts and customer support documentation) in various languages; • compliance with anti-bribery laws, such as the Foreign Corrupt Practices Act and equivalent anti-bribery and anti-corruption requirements in local markets, by us, our employees and our business partners, and the potential for increased complexity due to the requirements on us as a group to follow multiple rule sets; • complexity and other risks associated with current and future legal requirements in other countries, including laws, rules, regulations and other legal requirements related to cybersecurity and data privacy frameworks and labor and employment laws; • the need to enter into new business partnerships with third-party service providers in order to provide products and services in the local market, which we may rely upon to be able to provide such products and services or to meet certain regulatory obligations; • varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs and differences in technology service delivery in different countries; • fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; • taxation of our international earnings and potentially adverse tax consequences due to requirements of or changes in the income and other tax laws of the United States or the international jurisdictions in which we operate; and • political or social unrest or economic instability in a specific country or region in which we operate. We have limited experience with international regulatory environments and market practices, and we may not be able to penetrate or successfully operate in the markets we choose to enter. In addition, we may incur significant expenses as a result of our international expansion, and we may not be successful. We may launch products that lack local product-market fit, face local competition from pre-existing companies offering similar products and/or face limited brand recognition in certain parts of the world, any of which could lead to non-acceptance or delayed acceptance of our products and services by customers in new markets. Product adoption and growth rates may vary significantly across different markets. We are subject to income taxes and other taxes in the United States and other countries in which we transact or conduct business, and such laws and tax rates vary by jurisdiction. We are subject to review and audit by U.S. federal, state, local and non-U.S. tax authorities. Such tax authorities may disagree with tax positions we take, and if any such tax authority were to successfully challenge any such position, our financial condition or results of operations could be materially and adversely affected. Our failure to successfully manage these risks, or any failure to quickly exploit any opportunity for international expansion could harm our international operations in the markets we choose to enter and have an adverse effect on our business, financial condition and results of operations. Fluctuations in currency exchange rates could harm our operating results and financial condition. Revenue generated and expenses incurred from our international operations are often denominated in the currencies of the local countries. Accordingly, changes in the value of foreign currencies relative to the U.S. dollar can affect our revenue and operating results reflected in our U.S. dollar-denominated financial statements. Our financial results are also 98 Table of Contents subject to changes in exchange rates that impact the settlement of transactions in non-local currencies. As a result, it could be more difficult to detect underlying trends in our business and operating results. To the extent that fluctuations in currency exchange rates cause our operating results to differ from expectations of investors, the market price of our Class A common stock could be adversely impacted. Even if we use derivatives to hedge exposure to fluctuations in foreign currency exchange rates, the use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place, and may introduce additional risks if we are unable to structure effective hedges with such instruments. We may be adversely affected by global conflict. The continued conflict between Ukraine and Russia and the evolving conflict in the Middle East is likely to continue to create, impacts on global economic markets that are unpredictable. Furthermore, certain Galaxy operations are headquartered in Israel, with primary offices located in Tel Aviv. Approximately 60 Galaxy employees are physically located in Israel, a number of whom have military reserve service obligations. There has been no material impact from the ongoing conflict in the Middle East on our operations in the region. Galaxy management is monitoring the situation including implementing business continuity plans to mitigate future potential risk. Adverse developments affecting financial institutions could adversely affect our industry and business. Adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to bank failures and market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. Similarly, on March 12, 2023, the New York Department of Financial Services took possession of Signature Bank and appointed the FDIC as receiver of the bank. The U.S. Department of the Treasury, the Federal Reserve and the FDIC released a statement that indicated the FDIC would complete its resolution of SVB and Signature Bank in a manner that fully protects all depositors. The U.S. Department of Treasury, FDIC and Federal Reserve Board also announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions. We have in the past deposited funds with Signature Bank and Silvergate Bank. We have diverse U.S. banking relationships with most of our deposits at large, systemically important financial institutions. Although Galaxy did not experience any losses or other material impact from our banking relationships with Silvergate Bank and Signature Bank, to the extent that we have deposited funds with banking institutions that fail and are not otherwise protected, we would lose the amount of our deposits over the then current FDIC insurance limit. The loss of our deposits could reduce the amount of cash we have available to operate our business and have an adverse impact on our investment and trading strategies, the value of our assets, the value of any investment in us, financial condition and results of operations. Risks Related to Our Business Lines Managing different business lines could present conflicts of interest. There are certain inherent and potential conflicts of interest in managing different business lines and the presence of any such conflict of interest could materially adversely affect our business, reputation, results of operations and financial condition. We seek to build a full service, institutional-quality financial services business through our two operating business segments: Digital Assets and Data Centers. Subject to applicable regulatory approvals, we may also launch additional business lines from time to time. Due to the broad scope of our businesses, potential conflicts of interest include situations where our services to a particular client or our own investments or other interests conflict, or are perceived to conflict, with the interests of another client, as well as situations where one or more of our businesses have access to material non-public information that may not be shared with our other businesses and situations where we may be an investor or creditor of an entity with which we also have an advisory or other relationship. For example, our subsidiaries may provide corporate advisory services to companies that are also investee companies of our asset management business or within our venture portfolio. In such circumstances, we may not be able to conduct transactions relating to investments in portfolio companies, for example, due to the inability of our asset management business to use to material non-public information in buying or selling securities to us. In ordinary course of business, we may also make loans to protocols and receive the native token as collateral. Accordingly, there may be situations where we are compelled or forced to liquidate the token even though we may have investments in such protocol or token, or other relationships across the Company. Furthermore, the allocation of investment opportunities among us, our funds and our clients could also present conflicts of interest. Providing custody services while managing other funds and accounts can present certain conflicts of interest as those funds and accounts might have similar or different investment objectives or strategies as trust accounts, or otherwise hold, purchase or sell investments that are eligible to be held, purchased or sold by the trust accounts, or may take positions 99 Table of Contents that are opposite in direction from those taken by the trust accounts. In managing these different conflicts, fiduciary duty obligations may require us to resolve conflicts in favor of clients over our Company or other third parties. For example, our asset management business may be engaged to provide advice to a client that is considering entering into a transaction with us, and may advise the client not to pursue the transaction with us, or otherwise in connection with a potential transaction provide advice to the client that would be adverse to us. Employees and executives, including our Founder, may also have conflicts of interest in allocating their time and activity between the business lines. While we manage conflicts of interest through a number of ways, appropriately identifying and dealing with conflicts of interest is complex and difficult, and our reputation could be damaged and the willingness of clients to enter into transactions with us may be affected if we fail, or appear to fail, to identify, disclose and deal appropriately with conflicts of interest. In addition, potential or perceived conflicts, or the failure to make appropriate disclosures to clients regarding such conflicts, could give rise to litigation or regulatory enforcement actions. A failure to appropriately identify and address potential conflicts of interest could adversely affect our businesses, results of operations and financial condition. Changes in the value levels of the assets may cause our AUM, revenue and earnings to decline. Our asset management business, which is conducted through one or more subsidiaries, is primarily comprised of fees based on a percentage of the value of AUM and, in some cases, performance fees which are normally expressed as a percentage of returns to the client. Numerous factors, including price movements in the assets in the markets in which we manage assets, could cause: • the value of AUM, or the returns that we realize on AUM, to decrease; • the withdrawal of funds from any products offered by us in favor of products offered by competitors; or • a decrease in the value of seed or co-investment capital or a decrease in the amount of such capital available to invest. • Liquidation of third-party bankruptcy estate assets under mandates to do so may also reduce AUM. The occurrence of any of these events may cause our AUM, revenue and earnings, if any, to decline and may negatively impact the success of our asset management business, results of operations and financial condition. The asset management business is highly regulated and regulators may apply or interpret these regulations with respect to digital assets in novel and unexpected ways. Asset management is a highly regulated business subject to numerous legal and regulatory requirements. These regulations are intended to protect customers whose assets are under management and, as such, may limit our ability to develop, expand or carry out our asset management business in the intended manner. We are guided in significant part by regulatory regimes that are not clear or are not yet developed. To the extent that there is any ambiguity as to whether an asset under management is a security, the applicability of many regulations to our asset management business will not be clear. Furthermore, we must address conflicts of interest, as well as the perception of conflicts of interest, between ourselves (including our other business lines) and our clients and funds. In particular, we are required to act in the best interest of our clients and funds, which may include allocating opportunities to our clients and funds rather than to our own principal business lines. In addition, regulators have substantial discretion in determining what is in the best interest of a client of a fund and have increased their scrutiny of potential conflicts as well as the disclosure of such conflicts to an asset manager’s clients. Appropriately dealing with conflicts of interest is complex and if we fail, or appear to fail, to deal appropriately with any of these conflicts of interest, we may face reputational damage, litigation, regulatory proceedings, or penalties, fines or sanctions, any of which may have a material and negative impact on our asset management business. In addition, to the extent that we are required to obtain client or investor consent in connection with any potential conflict, any failure or delay in obtaining such consent may have a material and negative impact on our ability to take advantage of certain business opportunities. Increased competition may cause our AUM, revenue and earnings to decline. The asset management industry is highly competitive and has relatively low barriers to entry. We currently expect that, as digital assets become more mainstream, additional competitors, potentially in large numbers, may begin providing asset management services with respect to digital assets. We compete based on a number of factors including: investment performance, the level of fees charged, the quality and diversity of services and products provided, name recognition and reputation, and the ability to develop new investment strategies and products to meet the changing needs of investors. In addition, the introduction of new technologies, as well as regulatory changes, may significantly alter the competitive landscape for investment managers in digital assets. This could lead to fee compression or require us to spend more to 100 Table of Contents modify or adapt our product offerings to attract and retain customers and remain competitive with products and services offered by new competitors in the industry. Increased competition on the basis of any of these factors, including competition leading to fee reductions, may cause our AUM, revenue and earnings to decline and materially and negatively impact the success of our asset management business and affect our overall business, results of operations and financial condition. Our venture investments, managed by our crypto ventures team within the Digital Assets segment, including any associated lending activities, are subject to substantial risk. Our investments may be very risky and highly speculative and our venture investments managed by our crypto ventures team within the Digital Assets segment are subject to substantial risk, including risks related to third-party investment managers, operational risk, conflicts of interest, asset performance and regulatory compliance, that, if realized, could result in significant damage to our business and operating results. Moreover, our due diligence processes may fail to uncover all of the problems, liabilities or other challenges, including fraud, material deficiencies, regulatory or compliance issues in connection with our prospective portfolio companies or our third-party investment managers. This could result in an increased risk of unanticipated or unknown issues or liabilities including with respect to compliance and regulatory matters, and our mitigation strategies may not be effective. Further, our valuations and projections in connection with our prospective investments may be inaccurate, which could result in a loss of all or substantially all of our investments and could adversely impact our financial condition and our business. We generally do not take controlling equity positions in our portfolio companies. To the extent that we do not hold a controlling equity interest in a portfolio company, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the stockholders and management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity for the debt and equity investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the value of our investments. Further, our portfolio companies may be highly leveraged. Our strategy to expand into the AI/HPC data center business may not be successful and may result in adverse consequences to our business, financial condition and results of operations. Our growth strategy includes expanding and diversifying our revenue sources into new markets and technologies, including using some of our existing bitcoin mining infrastructure for AI/HPC data center development. However, our success in this area may not develop as anticipated and may be affected by factors such as the ability to obtain sufficient financing to convert our existing bitcoin mining infrastructure to AI/HPC data center infrastructure, the expense and timing of new infrastructure development, and our initial reliance on CoreWeave as our single AI/HPC customer. We do not have experience in developing and offering AI/HPC data center infrastructure. We may experience difficulties with the infrastructure development and modification of AI/HPC campuses, including the Helios campus, due to factors beyond our control. For example, there may be difficulties in integrating new equipment into our existing infrastructure, constraints on our ability to connect to or procure the expected electricity supply capacity at the campus, supply chain disruption (including as a result of local labor availability, severe weather, tariffs or otherwise), defects in design, construction or installed equipment, inability to procure the necessary equipment on commercially acceptable terms or at all, diversion of management resources, insufficient funding or other resource constraints, or actual costs for development may exceed our planned budget. See “—We are subject to risks in connection with our mining business and AI/HPC data center business, including risks associated with counterparties.” Our focus on developing the Helios campus and any other future campuses to offer AI/HPC data center infrastructure may also disrupt our business by diverting our resources and requiring significant management attention that would otherwise be available for utilization within, and development of, our existing businesses. Our ability to grow our AI/HPC data center business in the future is also dependent on the overall market for AI/HPC data centers. The broader adoption, use, and commercialization of AI technology, and the continued rapid pace of developments in the AI industry, are inherently uncertain. For example, certain AI technology is under public scrutiny for creating inaccurate, incomplete or misleading content, unintended biases and other discriminatory or unexpected results, errors or inadequacies and may be, or be perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed. Therefore, it is difficult to predict the demand for AI/HPC data center capacity, the size and growth rate for this market, the entry of competitive products, or the success of any existing or future products that may compete with any AI/HPC data centers we may develop. In addition, we cannot assure you that we will be able to keep up with the changing AI landscape or in developing services or infrastructure that can meet our customers’ evolving needs in a timely manner, if at all. There 101 Table of Contents is an increasing number of competitors providing AI/HPC data centers, which will result in competition and pricing pressure. Meanwhile, if there is a reduction in demand for any AI/HPC data centers, whether caused by a lack of customer acceptance, a slowdown in demand for computational power, a downturn in the AI industry, an overabundance of unused computational power, advancements in technology, technological challenges, competing technologies and solutions, decreases in corporate and customer spending, weakening economic conditions or otherwise, the growth of our AI/HPC data center business could be slowed or curtailed, or we may need to make certain changes to our Helios campus, including transitioning AI/HPC infrastructure services to other services, which could require significant and costly operational changes, impose substantial additional costs and divert management attention. For example, rapid technological advancements in the AI industry, such as developments of more efficient AI models that reduce the demand for high-end hardware and, by extension, the data centers that house them, could significantly reduce demand for AI/HPC data centers. AI and related industries are under increasing scrutiny from regulators due to their concerns about market concentration, anti-competitive practices, and the pace of partnerships and acquisitions involving generative AI startups. As the AI industry continues to grow, transactions and business conduct will likely continue to draw scrutiny from regulators. Therefore, our investments in developing and offering AI/HPC data centers may also result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks, ethical concerns or other complications that could adversely affect our business, reputation, results of operations or financial condition. Our AI/HPC data center business model is predicated, in part, on establishing and maintaining a customer base that will generate a recurring stream of revenues. If that recurring stream of revenues is not maintained or does not increase as expected, our operating results may be adversely affected. We expect that our AI/HPC data center business will initially be highly dependent on a single customer, CoreWeave and may continue to derive a significant portion of the revenue of our Data Center operating business segment from such single customer for the foreseeable future. Therefore, the success of our AI/HPC data center business will be highly dependent on our continued relationship with CoreWeave, pursuant to the terms of the Lease Agreement. Any cancellation or non-renewal of our data center business, including the Lease Agreement, in the future, could have a material adverse effect on our business, financial condition and results of operations. Our ability to grow our AI/HPC data center business in the future will be dependent, in large part, on our ability to maintain and grow our customer base. There can be no assurances that our customer will renew or sign a further contract when its initial contract expires in 2040. In addition, our customer may terminate its agreement with us in certain circumstances, including if we fail to achieve certain milestones within the time periods prescribed therein. In addition, there is no assurance that we will be able to attract additional customers on favorable terms, if at all. Customers may prefer to enter into on-demand or other short-term arrangements with us, particularly if we are not able to compete effectively to assure potential customers as to the reliability of our AI/HPC data center infrastructure and operations. As a result, there can be no assurance that we will retain our existing customer, or that we will attract new customers that will enter into long-term service contracts with us or on contract terms that generate recurring revenue. If we are unable to successfully market our AI/HPC data center business and maintain and grow our existing customer base, then the potential success of our entry into the AI/HPC data center industry may be less than we anticipate, which could have an adverse impact on our business, prospects and operations. We are subject to risks in connection with our mining business and AI/HPC data center business, including risks associated with counterparties. In December 2022, we acquired the Helios campus and its bitcoin mining operations, expanding our infrastructure. In furtherance of these objectives, our mining business has procured bitcoin mining equipment to be utilized for proprietary bitcoin mining operations and resale. Our expansion into AI/HPC data center infrastructure requires equipment specifically designed for AI/HPC workloads, which typically comes from different suppliers than bitcoin mining equipment. There are a limited number of AI/HPC data center equipment suppliers in the market today, and the market price and availability of equipment can be volatile based on market supply and demand dynamics. Moreover, our suppliers themselves rely on a complex network of third-party suppliers for semiconductor manufacturing, hardware components, and other critical inputs, which introduces additional risks to our supply chain. There can be no assurance that additional supplies of AI/HPC data center equipment will be available on terms that are acceptable to us, or at all, or that any supplier would be able to provide sufficient equipment to us to meet our requirements. Governments have limited or may limit the shipment of products in and out of their jurisdictions or impose tariffs on products, which could negatively impact our ability to receive bitcoin mining and AI/HPC data center equipment from our suppliers. Our third-party manufacturers, suppliers, sub-contractors and customers have been and will continue to be disrupted by worker absenteeism, quarantines, restrictions on employees’ ability to work, office and factory closures, 102 Table of Contents severe weather, disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions. Depending on the magnitude of such effects on our supply chain, shipments of parts for our existing bitcoin mining and AI/HPC data center equipment, as well as any new bitcoin mining and AI/HPC data center equipment we purchase, may be delayed. As our bitcoin mining and AI/HPC data center equipment require repair or become obsolete and require replacement, our ability to obtain adequate replacements or repair parts from the third-party manufacturers may therefore be hampered. Supply chain disruptions could therefore negatively impact our operations. In addition, our expansion into AI/HPC is expected to be highly dependent on a single customer. The risk that such customer or any future customer of our AI/HPC data center operations may fail to renew, terminate, default on or underperform their contractual obligations would curtail the growth of our AI/HPC data center business and may adversely affect the results of our operations. For a more detailed discussion of this risk, see “—Our AI/HPC data center business model is predicated, in part, on establishing and maintaining a customer base that will generate a recurring stream of revenues. If that recurring stream of revenues is not maintained or does not increase as expected, our operating results may be adversely affected.” Further, bitcoin mining operations can consume, and our AI/HPC data center operations are expected to consume, significant amounts of electricity. There has been increased focus on, and public debate surrounding, the negative environmental, social and governance considerations associated with such operations. For a more detailed discussion of these risks, see “Risks Related to Regulation, Information Systems and Privacy Matters—Legislative or regulatory changes or actions in foreign jurisdictions may affect our business or restrict the use of one or more digital assets, transactions referencing digital assets, mining activity or the operation of their networks or the digital asset trading platform market in a manner that adversely affects our business” and “Risks Related to Regulation, Information Systems and Privacy Matters—If regulators or public utilities take actions that restrict or otherwise impact mining activities, there may be a significant decline in such activities, which could adversely affect digital asset networks, our business and the market price of our Class A common stock.” Any problems accessing electricity sources or increased costs to procure power may result in adverse consequences to our business, financial condition and results of operations. Our digital asset mining operations and our AI/HPC data center operations can consume significant amounts of electricity and are dependent on our ability to maintain reliable and economical sources of power. Our inability to secure sufficient power or any power outages, shortages, supply chain issues, capacity constraints, or significant increases in the cost of securing power could have an adverse effect on our business, operating results, financial condition, and future prospects. Specifically, our Helios campus could be, from time to time, affected by problems accessing electricity sources, such as planned or unplanned power outages and limitations on transmission or distribution of power. Unplanned power outages, including, but not limited to those relating to large storms, earthquakes, fires, tsunamis, cyberattacks, physical attacks on utility infrastructure, war, and any failures of electrical power grids more generally, and planned power outages by public utilities, could harm customers of our Data Center operating business segment, as well as our business, operating results, financial condition, and future prospects. The global energy market is currently experiencing inflation and volatility pressures. Various macroeconomic and geopolitical factors are contributing to the instability and global power shortage, including the war in Ukraine, severe weather events, governmental regulations, government relations, and inflation. We expect the cost for power to continue to be volatile and unpredictable and subject to inflationary pressures, which could materially affect our financial forecasting, business, operating results, financial condition, and future prospects. We have undertaken certain processes, such as hedging, in order to reduce the risks of electricity price fluctuations. However, fluctuations in the prices and availability of sufficient power could affect our ability to profitably engage in our digital asset mining and AI/HPC data center operations. The digital asset mining industry has seen rapid growth and innovation, and is becoming increasingly competitive, and our mining business may be unable to compete effectively. The digital asset mining industry has seen rapid growth and innovation, and our mining business may be unable to compete effectively. Our mining business’ expenses may be greater than we anticipate, and our investments to make our mining business more efficient or to gain digital asset mining market share may not outpace monetization efforts. Bitcoin miners and other necessary hardware are also subject to malfunction, technological obsolescence, the global supply chain and difficulty, cost in obtaining new hardware and global energy prices. Any major malfunction out of the typical range of downtime for normal maintenance and repair could cause a significant disruption in our ability to continue mining, which could result in lower yields and harm our digital asset mining market share. New miners can be costly and may be in short supply. There can be no assurances that the most efficient mining hardware will be readily available when we identify the need for it. We face competition in acquiring mining machines from major manufacturers and, at a given time, mining 103 Table of Contents machines may only be available for pre-order months in advance. As a result of competition for the latest generation mining machines, or if we unexpectedly need to replace our mining machines due to a faulty shipment or other failure, we may not be able to secure replacement machines at reasonable costs on a timely basis. Furthermore, fluctuations in global energy prices have in the past, and may in the future, have a material impact on our mining business’ operations and financial results. In particular, rising global energy prices could have a material negative impact on our mining business’ profits, both directly and indirectly as a result of our exposure to counterparty risks. While our mining business intends to enter into business arrangements that allow us to hedge against global energy prices, there can be no guarantee that we are able to do so effectively, if at all. Our mining business’ strategy currently focuses on mining bitcoin (as opposed to other digital assets), and our hardware is limited to mining using current “proof-of-work” protocols. There could be developments in proof-of-work protocols, or other competing validation methods or processes, that negatively impact our current business strategy or render such business strategy obsolete. Proof-of-stake is an alternative method of validating digital asset transactions on other popular blockchain networks. Proof-of-stake methodology does not rely on resource intensive calculations to validate transactions and create new blocks in a blockchain; instead, the validator of the next block is determined, sometimes randomly, based on a methodology in the blockchain software. Rewards, and sometimes penalties, are issued based on the amount of digital assets a user has “staked” in order to become a validator. Should bitcoin shift from a proof-of-work validation method to a proof-of-stake or other method, the transaction verification process (i.e., “mining” or “validating”) may render our mining business materially less competitive or less profitable. In addition, in the general course of our business outside of our mining business, we participate in networks with proof-of-stake consensus algorithms, and we may earn rewards in the form of the native token of the network. Depending on the protocol, we also may permit third parties to “delegate” their digital assets to our validator. The third party earns rewards net of a commission earned by Galaxy. The value of any staked digital assets is subject to market volatility, and any such rewards we may earn as a validator could be offset by a loss in value of the staked digital assets. In addition, to the extent we participate in a proof-of-stake network but fail to remain current in any updates or upgrades to the network, we may become temporarily unable to earn rewards as a validator with respect to any staked digital assets on such network, or could have staked digital assets taken from us (“slashed”), to the extent we are deemed to be deviating from acting in the best interest of the network. In addition, the aggregate computing power of the global Bitcoin network has generally grown over time and we expect it to continue to grow in the future. The barriers to entry for new bitcoin miners are relatively low, which can give rise to additional capacity from competing bitcoin miners. As the hash rate in the Bitcoin network increases, the amount of bitcoin earned per unit of hash rate decreases. The Bitcoin protocol responds to increasing total hash rate by increasing the “difficulty” of bitcoin mining. If this “difficulty” increases at a significantly higher rate, we would need to increase our hash rate at the same rate in order to maintain market share and generate equivalent block rewards. Therefore, in order to maintain or increase our market share, we may be required to make significant capital expenditures. Any decrease in our mining business’ effective market share would result in a reduction in our share of block rewards and transaction fees, which could adversely affect our financial performance and financial position. We are not obligated to hedge our exposures, and, if we do, hedging transactions may be ineffective or reduce our overall performance. We are not obligated to, and often times may not, hedge our exposures. However, from time to time, we may use a variety of financial instruments and derivatives, such as options, swaps, and forward contracts, for risk management purposes, including to: protect against possible changes in the market value of our investment or trading assets resulting from fluctuations in cryptocurrency markets or securities markets and changes in interest rates; protect our unrealized gains in the value of our investments or trading assets; facilitate the sale of any such assets; enhance or preserve returns, spreads or gains on any trade or investment; hedge the interest-rate or currency-exchange risk on any of our liabilities or assets; protect against any increase in the price of any assets that we anticipate purchasing at a later date; or to any other end that we deem appropriate. The success of any hedging activities by us will depend, in part, on our ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the assets being hedged. Since the characteristics of many assets change as markets change or time passes, the success of our hedging strategy will also be subject to our ability to continually recalculate, readjust and execute hedges in an efficient and timely manner. In addition, while we may enter into hedging transactions to seek to reduce risk, such transactions may actually increase risk or result in a poorer overall performance for us than if we had not engaged in such hedging transactions. 104 Table of Contents We may fail to develop and execute successful investment or trading strategies. The success of our investment and trading activities will depend on the ability of the investment team to identify overvalued and undervalued investment opportunities and to exploit price discrepancies. This process involves a high degree of uncertainty. No assurance can be given that we will be able to identify suitable or profitable investment opportunities in which to deploy our capital. The success of the trading activities also depends on our ability to remain competitive with other OTC traders and liquidity providers. Competition in trading is based on price, offerings, level of service, technology, relationships and market intelligence. The success of investment activities depends on our ability to source deals and obtain favorable terms. Competition in investment activities is based on relationships, the ability to offer strategic advice to portfolio companies and reputation. The barrier to entry in each of these businesses is very low and competitors can easily and will likely provide similar services in the near future. The success of our venture investments and trading business could suffer if we are not able to remain competitive. We may make, or otherwise be subject to, trade errors. Errors may occur with respect to trades executed on our behalf. Trade errors can result from a variety of situations, including, for example, when the wrong investment is purchased or sold or when the wrong quantity is purchased or sold. Trade errors frequently result in losses, which could be material. To the extent that an error is caused by a third party, we may seek to recover any losses associated with the error, although there may be contractual limitations on any third party’s liability with respect to such error. Our trading orders may not be timely executed. Our investment and trading strategies depend on the ability to establish and maintain an overall market position in a combination of financial instruments. Our trading orders may not be executed in a timely and efficient manner because of various circumstances, including, for example, trading volume surges or systems failures attributable to us or our counterparties, brokers, dealers, agents or other service providers. In such an event, we might only be able to acquire or dispose of some, but not all, of the components of our positions, or if the overall positions were to need adjustments, we might not be able to make such adjustments. As a result, we would not be able to achieve our desired market position, which may result in a loss. In addition, we can be expected to rely heavily on electronic execution systems (and may rely on new systems and technology in the future), which may be subject to certain systemic limitations or mistakes, causing the interruption of trading orders made by us. The success of our investment banking business will depend on our ability to generate and maintain ongoing, profitable client demand for our services and our ability to remain competitive in the digital asset investment banking space. The success of our investment banking business, which is conducted through Galaxy Digital Partners LLC, one of our FINRA registered broker-dealers, and Galaxy Digital Labs LLC, depends on creating and sustaining a demand for our financial and strategic advisory services with respect to the digital asset, cryptocurrency and blockchain technology sector while maintaining favorable margins. The ability to realize and maintain this demand could be negatively affected by numerous factors, many of which will be beyond our control and unrelated to our future work product. Developments in the digital asset industry, which are expected to be rapid, could shift demand to new services and solutions. If, as a result of new technologies or changes in the industries we serve, our clients demand new services that we do not or are unable to provide, we may be less competitive in these new areas or need to make significant investment to meet that demand. Our strategy for developing our investment banking business focuses on responding to these types of developments by driving innovation that will enable us to expand our investment banking business into new growth areas. If we do not sufficiently invest in new technology and adapt to industry developments or evolve and expand our business at sufficient speed and scale, the success or even the viability of our investment banking business would be negatively affected. We may become involved in advisory projects that are not directly related to the digital asset or blockchain industry. These projects are likely to relate to industries and clients that we believe will benefit in the future from blockchain technology and our experience and network in the digital assets industry, however there can be no assurance that any such projects are successful. Further, as our investment banking business continues to develop and evolve, especially with regards to our investments in companies operating within the digital asset industry and the blockchain technology sector generally, we could be subject to unintended or unforeseen regulatory oversight, or come into the purview of regulators who seek to target us for our role in such transactions, which could expose us to regulatory actions, which may be inconsistently applied across jurisdictions. 105 Table of Contents The success of our investment banking business may be significantly affected by our ability to price our services properly. If we are not able to obtain favorable pricing for our services, the success of our investment banking business may materially suffer. The rates we charge for our services may be affected by a number of factors, including: general economic and political conditions, the competitive environment in our industry and the procurement practices of clients and their use of third-party advisors. In particular, because Galaxy Digital Partners LLC is a broker-dealer and advises on mergers and acquisitions, we may be unable to purchase errors and omissions insurance without incurring material costs to our business. Therefore, we may become subject to a securities class-action lawsuits in connection with our advice on a public merger or acquisition and be without recourse from insurance. The barrier to entry to digital asset investment banking services is very low and competitors can easily and will increasingly compete with our offerings. As a result, the success of our investment banking business, results of operations and financial condition could suffer if we are not able to remain competitive. The less we are able to differentiate our services and solutions or clearly convey the value of our services and solutions, the more risks we will face in winning new work in sufficient volumes and at target pricing, which could materially negatively impact the success or viability of our investment banking business. In addition, the introduction of new services or products by competitors could reduce our ability to obtain favorable pricing and impact the overall economics for the services or solutions offered. Because of regulatory uncertainty regarding how transactions in digital assets or digital securities by broker-dealers are or should be regulated, Galaxy Digital Partners LLC does not currently engage in underwriting services or private placement services with respect to offerings involving digital assets, tokens, cryptocurrencies, digital securities or initial coin offerings, nor does it accept digital assets, tokens, cryptocurrencies or digital securities as payment for broker-dealer related services. Pursuant to its membership agreement with FINRA, Galaxy Digital Partners LLC—the entity through which we operate aspects of investment banking—is authorized as a broker-dealer to engage in business relating to underwriting or selling group participation (corporate securities other than mutual funds); private placements of securities; business advisory services concerning mergers and acquisitions, debt financing, equity financing, leveraged buy-outs and distressed corporate advisory; and referrals of broker-dealers, hedge funds and investors to unaffiliated broker-dealers for order execution, clearance and settlement. Despite its focus on providing services to companies in the digital assets space, however, because of regulatory uncertainty regarding how transactions in digital assets by broker-dealers are to be regulated