Online community hub Reddit revealed in a recent filing that it sold off most of its crypto holdings during the third quarter, noting that the financial impact from this sale was “immaterial” for that period.
The company said it acquires certain cryptocurrencies for use by its product and engineering teams, limited to specific applications.
Reddit previously allocated part of its excess funds to Bitcoin and Ether. Now, the platform continues to acquire Ether and Matic as payment for transactions involving certain virtual items.
By Sept. 30, 2024, Reddit disposed of all Bitcoin and Ether previously held for “treasury purposes.” However, it hinted that it might still acquire more crypto in the future.
“We have held cryptocurrencies and experimented with blockchain technology, and may do so in the future, which may subject us to exchange risk and additional tax, legal, and regulatory requirements,” Reddit said.
Reddit Discloes Board-Approved Crypto Investment Strategy
The social media company first revealed its crypto holdings earlier this year after filing with the SEC to go public under the ticker “RDDT.”
Reddit’s investment strategy requires board approval for any new cryptocurrency ventures, according to its filing. This policy limits treasury investments to Bitcoin, Ether, and other crypto that regulatory bodies like the SEC or CFTC, or their top officials, have indicated may not be securities.
However, Reddit said it bases these decisions on its own risk assessments, guided but not strictly bound by regulatory signals.
Company to Adopt Fair Market Value Standard for Crypto in 2023
Further, Reddit announced plans to adopt a new accounting standard in 2025. This update requires cryptocurrencies to be reported at their current fair market value instead of their original cost basis.
MicroStrategy, Marathon, Riot Platforms and Tesla are the largest corporate holders of Bitcoin, according to Bitcoin Treasuries.
The post Reddit Sold Most of Its Crypto in Q3, Missing Out on October’s Bitcoin Surge appeared first on Cryptonews.