The directors present the strategic report for the year ended 31 December 2021.

Introduction

Blockchain Access UK Ltd (“the Company”) was incorporated on 30 April 2018. The Company is the fully owned subsidiary of Blockchain.com Group Holdings, Inc. (“the Parent Company”, and together with other fully owned subsidiaries of the Parent Company, referred to as “the Group”)

During the year, the Company’s principal activity was to facilitate the exchange of digital assets allowing consumers and businesses to securely transact in digital assets. The Company primarily derives its revenues from digital asset transaction services, where users can buy, sell and swap digital assets for a service fee. The Company also provides digital assets loans to customers and earns lending fees on these loans. The Parent Company on a consolidated group basis conducts business under the name Blockchain.com.

For the year ended 31 December 2021, the Company recognised total revenue of $1,969.1m (compared to $429.6m as of 31 December 2020), and cost of sales, including impairment from digital assets, of $1,793.7m (compared to $436.7m as of 31 December 2020), resulting in a gross profit of $175.4m (compared to a gross loss of $7.1m as of 31 December 2020).

OTC revenue was $623.5m for the year ended 31 December 2021 (compared to $150.5m as of 31 December 2020). Brokerage revenue was $1,208.4m (compared to $186.2m as of 31 December 2020). Exchange revenue stream was $4.1m (compared to $73.2m as of 31 December 2020). Lending fee revenue was $133.1m (compared to $19.6m as of 31 December 2020). Custody revenue was $64k (2020: $nil).

The Company accounts for the cost of the crypto currency used to fulfil customer orders as a cost of sale. Cost of sales for the year is stated after an impairment recovery on digital assets of $45.6m, compared with an impairment charge of $134.8m in 2020. Cost of sales during the year were $1,793.7m (2020: $436.7m), which led to a gross profit of $175.4m (compared to the $7.1m gross loss incurred in 2020). Cost of sales includes interest expense of $70.6m (2020: $3.6m), being $64.0m payable on amounts owed in digital assets and $6.6m payable on FIAT borrowings.

Administrative expenses were $324.3m for the year ended 31 December 2021 (compared to $28.9m as of 31 December 2020).

Other operating expenses were $13.8m for the year ended 31 December 2021 (compared to $249.0m as of 31 December 2020). Within the year, $672.3m (2020: $320.7m of expense) was incurred related to unrealised losses from digital assets, with a realised gain of $656.6m (2020: realised gain of $71.9m).

The Company’s total current assets were $1,862.2m as of 31 December 2021 (compared to $683.4m as of 31 December 2020). Stated net of impairment, digital assets held by the Company were $492.2m (2020: $272.5m), short term loan receivables $124.9m (2020: $83.8m) and digital assets lent to customers $960.2m (2020: $213.3m).

The Company held $99.3m of cash including custodial deposits as part of the usual course of business for the period ending 31 December 2021 (2020: $49.0m). The Company held $57.1m of custodial cash (2020: $32.6m) and $42.1m of cash at bank and in hand as at 31 December 2021 (2020: $16.4m).

As at 31 December 2021 the Company held investments with a value of $14.9m (as at 31 December 2020: an investment of $4.9m in an unlisted private company, on which a fair value gain of $10.3m had been recorded, together with warrants to the value of $171k).

The Company held $24.7m in derivative financial assets at 31 December 2021 (2020: $15.6m). An unrealised gain of $11.6m (2020: gain of $2.98m) and a realised gain of $24.7m (2020: gain of $2.92m) was recognised in the Statement of Comprehensive Income.

Overall, creditors falling due within one year were $2,350.6m as at 31 December 2021 (2020: $975.8m). These included Crypto borrowings of $1,295.5m (2020: $729.1m). For creditors falling due after more than one year, the balance was $nil as at 31 December 2021 (2020: $30.9m).

Risk related to COVID-19

The World Health Organization declared in March 2020 that the outbreak of the coronavirus disease (COVID-19) constituted a pandemic. The COVID-19 pandemic has caused general business disruption worldwide beginning in January 2020. In response to the pandemic and for the protection of employees, the Group adopted flexible working patterns in order to maintain uninterrupted services to customers. The Company has assessed the extent to which COVID-19 impacts events after the reporting date and have not identified additional items to disclose as a result.

Risk of a cyber-attack or security breach

The Company maintains personal data for its customers and information required to access their crypto assets. A cyber-attack or security breach could potentially lead to a host of adversarial events, including financial impact on financial statements due to potential provisions for losses, regulatory investigations, penalties and fines, lawsuits, remediation costs, our services being unavailable and interrupting our operations among others.

The Company recognizes that a potential cyber-attack or security breach is an industry wide threat; and a potential cyber-attack directed at financial institutions and/or crypto companies, may cause a general loss of customers’ confidence in the crypto economy, which may ultimately impact the Company’s brand and financial performance. Cyber attackers wishing to infiltrate the Company’s systems are highly sophisticated and well organised; however, the Company is continuously designing and implementing safeguards to manage and prevent potential security breaches. Examples of such malicious activity may include social engineering, phishing, hacking, or even insider threats, and system errors. While some of this activity may not be detected immediately, the Company continues to dedicate costs and resources to protect its customers and third parties from these potential threats on an ongoing basis.

Cyberattacks and security breaches of the Company’s platform, or those impacting its customers or third parties, could adversely impact the Company’s brand, reputation, business, operating results, and financial condition. The Company’s business involves the collection, storage, processing, and transmission of confidential information, customer, service provider, and other personal data, as well as information required to access customer assets. The Company has built its reputation on the premise that its platform offers customers a secure way to purchase, store, and transact in crypto assets. As a result, any actual or perceived security breach of the Company or its third-party partners may:

• harm its reputation and brand;

• result in its systems or services being unavailable and interrupt its operations;

• result in improper disclosure of data and violations of applicable privacy and other laws;

• result in significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, and financial exposure;

• cause the Company to incur significant remediation costs;

• lead to theft or irretrievable loss of the Company’s or our customers’ fiat currencies or crypto assets;

• reduce customer confidence in, or decreased use of, our products and services;

• divert the attention of management from the operation of the Company’s business;

• result in significant compensation or contractual penalties from the Company’s to its customers or third parties as a result of losses to them or claims by them; and

• adversely affect the Company’s business and operating results

Risk of loss of private keys

Crypto assets are generally controlled only by the possessor of the unique private key relating to the digital wallet in which the crypto assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent third parties from accessing the crypto assets held in such a wallet. To the extent that any of the private keys relating to the Company’s wallets containing crypto assets held for its own account or for its customers are lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, the Company will be unable to access the crypto assets held in the related wallet. Further, the Company cannot provide assurance that its wallet will not be hacked or compromised. Crypto assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or hack or other compromise of, digital wallets used to store the customers’ crypto assets could adversely affect the customers’ ability to access or sell their crypto assets, require the Company to reimburse the customers for their losses, and subject the Company to significant financial losses in addition to losing customer trust in it. As such, any loss of private keys due to a hack, or service provider misconduct or error, or other compromise by third parties could hurt the Company’s brand and reputation, result in significant losses, and adversely impact the Company’s business.

Regulatory Risk

The regulation of investing and financial businesses is extremely complex; digital assets make up a relatively new and rapidly evolving space. The Company intends to use its internal legal and compliance expertise, in consultation with its outside counsel, to determine how to engage in its business activities so as to obtain the appropriate licenses or to be able to rely on an exception or exemption from any relevant registration requirement. We will continue to monitor the laws and guidance issued in these jurisdictions that may be applicable to our business.

Volatility Risk

The Company trades, invests and holds primarily digital assets and investments in the blockchain space and conducts related businesses. The Company may accumulate significant positions in, or otherwise have significant exposure to, a single digital asset or asset type. If the Company chooses to invest in concentrated positions, the Company could be exposed to an increase in volatility of its investment results over time, and to an increased risk that a loss in any position may have a material effect on its investment and trading strategies. The Company is exposed to significant market risk based on its positions in digital assets. The prices or values of digital and non-digital assets in which the Company may invest, or trade, have been, and likely will continue to be, highly volatile. Sustained market declines and periods of significant market volatility may limit the Company’s ability to produce positive investment and trading results, and there can be no assurance that the strategies deployed by the Company will be successful in the markets and assets in which the Company invests or trades. The Company’s risk committee constantly evaluates market risk exposure and establishes risk management procedures. The Company has elected to operate with less cryptocurrency exposure than would be required to maintain a stable leverage ratio.

Competition Risk

The Company operates in an industry that is 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. The Company expects competition to further intensify in the future as existing and new competitors introduce new products or enhance existing products. The Company competes against a number of companies whose operations are focused on crypto-based services, as well as companies providing traditional financial services. If the Company is unable to compete successfully, or if competing successfully requires the Company to take costly actions in response to the actions of its competitors, its business, operating results, and financial condition could be adversely affected.

Industry developments

The industry has been characterized by rapid, significant, and disruptive products and services in recent years. These include decentralized applications, DeFi, 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, such as “initial exchange offerings.” The Company expects new services and technologies to continue to emerge and evolve, which may be superior to, or render obsolete, the products and services that the Company currently provides. The Company cannot predict the effects of new services and technologies on its business. However, its ability to grow its customer base and net revenue will depend heavily on our ability to innovate and create successful new products and services, both independently and in conjunction with third-party developers. In addition, the Company’s 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.

Risk of loss of banking partners

The Company may be harmed by the loss of any of its banking partners and trading venues. As a result of the many regulations applicable to cryptocurrencies or the risks of digital assets generally, financial institutions may decide to not provide bank accounts (or access to bank accounts), payments services or other financial services to companies providing cryptocurrency products. Banks may refuse to provide bank accounts and other banking services to digital asset-related companies, including the Company, for a number of reasons, such as perceived compliance risks or costs. The Company’s inability to procure or keep banking services would have a material and adverse effect on us. Similarly, continued general banking difficulties may decrease the utility or value of digital assets or harm public perception of those assets. Consequently, if the Company cannot maintain sufficient relationships with the banks, banking regulators restrict or prohibit banking of cryptocurrency businesses, or if banks impose significant operational restrictions, it may be difficult for the Company to find alternative business partners for its cryptocurrency offerings, which may result in a disruption of its business and could have an adverse impact on our reputation, business, investment and trading strategies, the value of our assets, the value of any investment in the Company, financial condition and results of operations.

Risks related to Russia - Ukraine Conflict

The Company is currently monitoring the conflict between Russia and Ukraine. The Company could experience in the future negative impacts to its businesses and results of operations as a result of the recent action of Russian military forces and support personnel in Ukraine, which has escalated tensions between Russia and the U.S., NATO, the EU and the U.K. The U.S. EU and the U.K. have imposed, and are likely to impose material additional, financial and economic sanctions and export controls against certain Russian and Belarussian organizations and/or individuals. During the week of February 21, 2022, the U.S., the U.K., and the EU each imposed packages of financial and economic sanctions that, in various ways, constrained transactions with numerous Russian and Belarussian entities and individuals, or in certain regions of Ukraine. The Company’s ability to engage in activity with certain consumer and institutional businesses in Russia and Ukraine or involving certain Russian or Ukrainian businesses and customers is dependent in part upon whether such engagement is restricted under any current or expected U.S., U.K., EU and other countries sanctions and laws. The Company has complied with the sanctions that have been imposed and have not observed any material impact to its operations.

Risk related to Brexit

The United Kingdom’s withdrawal from the European Union (“Brexit”), has resulted in the United Kingdom maintaining its own data protection regime, operating in parallel with the EU’s General Data Protection Regulation (“EU GDPR”). Data processing in the United Kingdom is governed by a United Kingdom version of the GDPR (the “UK GDPR”), the Data Protection Act 2018, and, as of June 2025, the Data (Use and Access) Act 2025 (“DUAA”), which amends aspects of both the UK GDPR and the Data Protection Act 2018. The DUAA, whose data protection provisions are now fully in force, introduces reforms to the UK framework in areas including international data transfers, automated decision-making, research processing, children’s data protection, and the enforcement powers of the Information Commissioner’s Office (“ICO”). As a result, the Company is exposed to two parallel but increasingly divergent regimes. Differences in application, interpretation, and enforcement between the two regimes may continue to grow, increasing compliance complexity and the Company’s overall risk exposure. With respect to transfers of personal data from the EEA to the United Kingdom, the European Commission originally adopted an adequacy decision on June 28, 2021, finding that the United Kingdom ensures an adequate level of data protection.

Risk related to Brexit (continued)

That decision was renewed on December 19, 2025, following an opinion of the European Data Protection Board and approval by EU member states, and will remain in effect until December 27, 2031, subject to a review after four years. The renewed adequacy decision permits transfers of personal data from the European Economic Area (EEA) to the United Kingdom to continue without additional transfer safeguards such as standard contractual clauses. Although the UK has introduced reforms to its data protection regime through the Data (Use and Access) Act 2025, which amends aspects of the UK GDPR, the European Commission has concluded that the UK’s framework continues to provide an essentially equivalent level of protection. Nonetheless, there is increasing scope for divergence in application, interpretation, and enforcement of data protection law between the United Kingdom and the EEA, and the Commission’s adequacy decision could be suspended or revoked if the UK’s standards diverge materially. The current adequacy decision is the only such decision with a built-in sunset clause, creating a periodic renewal risk. Other countries have also passed or are considering passing laws requiring local data residency or restricting the international transfer of data. These changes may lead to additional costs and increase the Company’s overall risk exposure.

Financial risk management policy objectives

The Company’s activities may expose it to a variety of financial risks, including digital asset risk, credit risk, and liquidity risk, among others. The Company seeks to minimise potential adverse effects of these risks by employing experienced personnel, ongoing monitoring of transactions, digital asset inventory and credit risk exposures as well as a review and analysis of market and industry events that may have adverse impact on the Company’s financial performance.

Digital asset risk

The market price of digital assets, including crypto currency assets, is affected by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation and political and economic conditions. Digital asset prices are very volatile, and market movements are difficult to predict. Supply and demand for such assets change rapidly and may be affected by general economic trends as well as current and future regulatory regimes and sovereign government actions and laws. The Company expects to see significant fluctuations in its total revenues as it is predicated on the digital asset market prices and how digital assets perform within the broader crypto ecosystem.

Credit Risk

Credit risk is the risk that a counterparty to a transaction will fail to meet its obligation or commitment under the contract causing the other party to incur a financial loss. The Company’s cash and cash equivalents, accounts held with third-party crypto currency exchanges, crypto loan and collateral receivables and other receivables are exposed to credit risk. The Company limits its credit risk exposure by placing its cash and digital assets with high credit quality financial institutions and cryptocurrency exchanges, on which the Company has performed internal due diligence procedures that include the review of the crypto exchanges’ anti-money laundering (“AML”) and know-your-client (“KYC”) policies, setting balance limits for crypto exchange accounts based on risk exposure thresholds and preparing regular asset management reports to ensure limits are being followed. The Company limits its credit risk with respect to its receivables, crypto loan and collateral receivables and other receivables by transacting with credit worthy counterparties that are believed to have sufficient capital to meet their obligations as they come due and, with regards to over-the-counter and crypto lending and borrowing counterparties, on which the Company has satisfactorily performed the relevant internal due diligence, AML and KYC procedures.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due, as well as the risk of not being able to liquidate assets at reasonable prices. The Company manages liquidity risk by maintaining sufficient cash and digital assets balances to enable settlement of its liabilities. The Company intends to manage its short-term liquidity needs through its available cash and digital assets balances as well as inflows of cash and digital assets from its ongoing business activities.

Key Performance Indicators

The Company’s key performance indicators for the year ended 31 December 2021 are revenue, total current assets and trading volume (defined as the total quantity of an asset that has been traded within the period).

Total revenue of the Company increased by 358% year on year. Retail trading volumes were $11.95bn in 2021 (2020: $2.94bn). Total current assets were $1,862.2m in 2021 (2020: $683.4m).

The Directors of the Company strive to act in ways most likely to promote the success of the business for the benefit of its stakeholders having regard to the matters set out in S172 (1) of the Companies Act 2006 when making strategic decisions.

The following Section 172 (1) statement is made on behalf of the Company in Compliance with the requirements.

Foster business relationships with suppliers, customers and other stakeholders

Shareholders

The Company has an open dialogue with the shareholder. Discussions with the shareholder include a wide range of topics including financial performance, strategy, governance, and outlook. Shareholder feedback is discussed by the Board and is considered in decision making.

Suppliers

The Company works hard to ensure that its suppliers are treated fairly and are valued and that relationships with them can be managed actively. Key areas of focus include innovation and product development.

Customers

The Group and Company are customer focused which is why customer service is essential. The Company is always looking for new ways to strengthen customer services and is continuously engaging with customers to build even deeper relationships. The Group and the Company leverage these relationships to make decisions regarding its continued product development.

Community and Environment

Building trust with customers and the communities around them is important. The Company aims to facilitate positive change for the people and communities in which it interacts.

Business conduct

The Company seeks to operate with high ethical standards and integrity by conducting business activities in compliance with applicable legal and regulatory requirements. The Company also implements internal policies governing behaviour and conduct as well as policies that protect customers and promote better services. The Company undertakes an ongoing review of how evolving legislation, guidelines and best practices should be best reflected on topics including conduct, risk, compliance and the sustainable development of the industry.

Acting fairly between shareholders

The Company is committed to acting fairly with its shareholders and being transparent in its activities and directions.

Likely consequences of any decision in the long term

Each year, a review of the Company’s strategy is carried out for the following year and beyond as part of the budgeting process. This helps to plan ahead and also forms the basis for financial budgets and planning and other strategic plans. The Company considers the long term implications of any decisions made with its stakeholders in mind and its long term reputation.

In 2020, the Financial Conduct Authority (FCA) amended the existing UK Money Laundering Regulations to include crypto asset exchange providers and custodian wallet providers. The Company duly complied with the amendment and registered with the FCA, with the intent on obtaining a permanent license to continue uninterrupted service to its customers. Throughout 2020, the Company continuously consulted with the FCA and maintained internal risk management and governance systems in the changing regulatory environment in 2020.

In 2021, in consultation with the FCA, the Company withdrew its application with the FCA given the FCA’s then position on international crypto asset exchange providers. Accordingly, the Group restructured its operations and realigned business activities to subsidiaries abroad.

Environmental, Social and Governance

The Company assesses changes to environment, social, and governance impacts on its business on a regular basis as a holistic effort. A cross-functional team is assessing business strategy, risk, marketing, public policy, and markets. Industry and policy discussions are considered to address climate risks as new tools and long term changes to operations are developed to contribute to clean energy projects, conservation opportunities, and offset transaction emissions.

Future developments

During the subsequent fiscal year, the Company initially continued to function largely the same as in 2020. The Company continued to focus on the growth opportunities that the digital market presents by investing in its digital platforms and expanding its products and services. The strategy during this time period included the following:

• Develop its digital platforms and expand product and service offerings to customers;

• Support customer retention and growth;

• Promote and support the growth of the digital economy;

• Manage risk and compliance through enhanced transaction monitoring, AML and KYC policies and procedures.

In 2022, the Company underwent a global restructuring to align with the changing regulatory landscape in crypto, while continuing to invest in the key business strategies outlined above. The Company restructured its activities, to the effect that its Group subsidiaries abroad retained and managed contractual relationships with clients, while retaining the intellectual property of the digital platform to continue to provide custodial infrastructure services to those subsidiaries. This changed the role of having all operations of the Company centralised in the UK and allowed for more agility to service the existing customer base.

This report was approved by the board and signed on its behalf.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2021.

Blockchain Access UK Ltd (“the Company”) was incorporated on 30 April 2018. The Company is the fully owned subsidiary of Blockchain.com Group Holdings, Inc. (“the Parent Company”, and together with other fully owned subsidiaries of the Parent Company, referred to as “the Group”). The Company’s principal activity is to facilitate the exchange of digital assets allowing consumers and businesses to securely transact in digital assets.

The Company primarily derives its revenues from digital asset transaction services, where users can buy, sell and swap digital assets for a service fee on both its Wallet and Exchange platforms. The Company also provides digital assets loans to customers and earns lending fees on these loans.

The loss for the year, after taxation, amounted to $163.5m (2020 loss - $285m). During 2021 and 2020, dividends were neither proposed nor paid

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

As is normal for companies of our size, operational decision making of day-to-day activities are delegated to management. Management deeply understands its customers to deliver an experience that is both high quality and targeted to their specific needs. Over the course of the year, management shares relevant decision making on business relationships and compliance matters with the Company’s board.

Emissions and energy consumption

The Company has no employees and no direct emissions or energy consumption. In the industry, the primary cause of energy consumption is from mining operations of which the Company does not conduct. Any energy consumption would relate to development of technology and general infrastructure born by other Group entities.

Directors' liability insurance and indemnities

The Company has a Directors & Officers insurance policy in place to cover its Directors against costs arising from defending themselves in legal proceedings taken against them as a direct result of duties carried out on behalf of the Company.

As permitted by Articles of Association, the Directors have the benefit of Side A (Non-indemnifiable) and Side B (Indemnifiable); both coverages are designed to protect the individual Director and Officer as defined by Section 230 of the Companies Act 2006. The indemnity was in force through the financial year and continues to be in force.

Disclosure of information auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

• so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

• the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditors, Gravita Audit II Limited, will be proposed for reappointment in accordance with section 489 of the Companies Act 2006.

Post reporting date events

In accordance with accounting standards affecting disclosures of subsequent events, the Company evaluated subsequent events for recognition and disclosure to 22 September 2026, the date at which these financial statements were available to be issued. Management concluded that, other than those noted below, no material subsequent events have occurred since 31 December 2021 that require recognition or disclosure in the financial statements.

In February 2022, the Company underwent a global restructuring to align with the changing regulatory landscape in crypto. Beginning in March 2022 and ending in July 2023, the Company restructured its activities. The result being Group subsidiaries abroad housing contractual relationships with clients, while the Company retained the intellectual property of the digital platform to continue to provide custodial infrastructure services to those subsidiaries.

Three Arrows Capital (3AC), a Singapore-based hedge fund, filed for bankruptcy in July 2022. The Company incurred a loss as a result of lending to 3AC which was ultimately recognised by the 3AC joint liquidators in the bankruptcy estate at $599,593,557. The Company sold a portion of the claim in order to recoup some of the loss. The Company remains a creditor in the insolvency estate. Distributions made against the claim have totaled $105,790,061 to date.

In November 2022, FTX, a Bahamas-based cryptocurrency exchange, filed for bankruptcy. FTX was a leading centralised cryptocurrency exchange specializing in derivatives and leveraged products. The Group’s loss position amounted to $3,664,872.76 and was borne by the Company’s affiliated entity, located in Singapore. On 31 March 2023, the Group assigned its claims against FTX to a credit company for an aggregate amount of $549,730.93. The financial impact on the Company was immaterial, at around $24,000.

March 2023 saw the collapse of Silvergate and Signature Bank. The Company moved all funds held at banks affected by these closures and did not incur any losses.

On March 5, 2024, Moov.law (Belgium law firm) sent a demand letter to various Blockchain entities, including the Company, on behalf of Geoffroy Brixhe threatening legal action concerning a purported unauthorized transaction from January 2021 of 1.10810062 BTC in the user’s non-custodial wallet. The Company’s internal diligence revealed no wrongdoing on the Company’s part and suggested that the user’s wallet was likely compromised by a bad actor. A legal action was initiated in Belgium court on September 18, 2025. The parties have exchanged preliminary evidence. The court is expected to issue an order providing a timetable for the exchange of written submissions through 2026 and 2027, with a hearing for oral pleadings anticipated to take place sometime in 2027.

The Directors of the Company each received a court summons dated 30th May 2024 relating to the Company’s failure to submit its accounts to Companies House in respect of its financial year ending 31st December 2022. The case management hearing has been adjourned multiple times, and is now scheduled for 8 December 2026. The directors are working with their legal advisers to defend the matter. See Note 1.15 for further details.

An agreement with Griid Infrastructure LLC came to an end in June 2024, when the Company agreed to a full release of debt, security interests and other claims to the value of $68m inclusive of $10.8m of interest. The settlement was reached under the Griid Credit Agreement at a substantial discount, with the Company receiving $15m as full and final consideration for the release of all obligations under the agreement.

On July 13, 2024, Celsius Network LLC, et al (post-effective date debtors) filed a preference action against the Company seeking recovery of purported Avoidable Transfers (which the debtors claim is valued $12,905,828.21) and unauthorized setoffs. The parties reached a settlement in principle for an installment plan totaling $1.75m.

In December 2025, HMRC issued an estimated tax assessment in respect of FY2021 totalling £16,297,163.78. This comprised £674,019.19 in respect of VAT, including interest and penalties up to 26 June 2026, and £15,623,144.59 in respect of Corporate Income Tax, including interest and penalties up to 26 June 2026.

Following discussions with HMRC, the Company entered into a Time to Pay arrangement, under which an initial payment of £6,500,000 was made on 28 July 2026. The Company did not make the subsequent payments provided for under the arrangement.

The Company expects the FY2021 Corporate Income Tax liability to be nil following the filing of the relevant FY2021 tax return. Accordingly, the Company expects the £6,500,000 paid in respect of Corporate Income Tax to be refundable by HMRC, together with applicable statutory interest.

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies for the Company's financial statements and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Going concern

For the year ended 31 December 2021 the Company had a net loss of $163.5m (2020: net loss of $285.1m). Total revenue of the Company was $1,969.1m (2020: $429.6m) and total current assets were $1,862.2m (2020: $683.4m). The Directors have considered the going concern status taking account of the entity’s financial performance and the following matters/information:

The Company may face future negative impacts to its business and results of operations as a result of ongoing global geo-political events, which includes but is not limited to the conflict between Russia and Ukraine. As at the date these financial statements have been signed, these events have had no observed material adverse impact on the Company’s operations, capital raising ability, or on trading.

The Group, which the Company is a subsidiary of, underwent a significant global operational restructuring (from March 2022 to July 2023), to align with the changing regulatory landscape around the crypto sector. As a result, subsidiaries, other than the Company, now hold the contractual relationships with the Group’s clients, with the Company retaining the intellectual property of the exchange platform, as well as providing custodial infrastructure services to those subsidiaries. The underlying legal agreements supporting these updated inter-company arrangements have short term, albeit market standard, notice periods and may therefore be withdrawn at short notice. It is noted that the infrastructure services are provided on a revenue split based on transactional volume at the rate of 65%. While the Company is integral to this updated global business model, it is also highly dependent on this model continuing in its deployed form and there being no adverse impact on the operations of the wider group which would limit cashflows and potentially limit continued working capital funding by its Parent Company.

The Directors have obtained, considered and discussed with the directors of the Parent Company the current Group operational performance, together with budgets and cash flow forecasts for the Group covering up to a twelve month period post approval of the financial statements, as approved by the management of the Parent Company. Based on these discussions, the Directors note that there will not be any material change in either the business activities of the Parent Company, the Company, nor the capital cost structure. The Directors have also evaluated the sustainability and feasibility of the future plans of the Company and its operating model, in light of the discussions with the Parent Company, which confirmed there was no intention for the Company to cease trading in the foreseeable future too.

Going concern (continued)

Given the late filing of financial statements with Companies House, the Directors of the Company have received court summonses. The Directors have considered the court summonses they received relating to their failure to submit the Company’s annual accounts to the UK company registrar, Companies House, in respect of its financial year ending 31st December 2022, and the potential uncertainties related to the outcome of this process. As set out in the Note 1.15 - Laws and Regulations the case being brought is against the Directors rather than the Company and based on the advice received from external legal counsel, the Directors do not believe that there is a risk that court proceedings could be brought against the Company. The Directors are also of the view that there is no consequential impact from the case against the Directors that will impact the ability of the Company to continue as a going concern. The Directors have concluded that, although there is uncertainty in this respect, the uncertainty does not itself have a material impact on the ability of the Company to continue as a going concern.

The Parent Company has provided working capital assurances in the form of a non-binding letter of support that provides that the necessary funding will be forthcoming if and when it becomes required. The Directors have also concluded that the Parent Company and the Group are in a position to provide this financial support, should it be considered necessary. The non-binding letter of support records the financial support that the Parent Company will provide to ensure that the Company can meet its liabilities as and when they fall due, including any cash shortfalls and working capital needs that may arise for a period of at least 16 months from the date of approval of the Company’s 31 December 2021 Accounts. This is supplemented by a deed poll guarantee dated 22 March 2022, as amended, issued by the Parent Company (the “Parent Guarantee”) pursuant to which the Parent Company guarantees the financial obligations of the Company. The Directors anticipate that this funding, as required, will be forthcoming from the Parent Company. The combination of the non-binding letter of support and the Parent Guarantee will be necessary to ensure that the Company is able to meet its obligations as they fall due.

The Parent Company’s non-binding letter of support has been provided with the full knowledge of the above noted court summons against the Directors of the Company and after considering the potential consequential impact of the court summons against the Directors on to the Company.

Taking account of the above factors and considering the mitigations to risks to the ability of the Company to continue as a going concern, the Directors believe that the Company, with the Parent Company support, has adequate resources to continue as a going concern for the foreseeable future. This conclusion is based upon the non-binding letter of support, the Parent Guarantee, and the inter-company arrangements in place to support the infrastructure services provided to other subsidiaries and the wider group.

The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate.

Law and regulations

The directors of the Company each received a court summons dated 30th May 2024 relating to their failure to submit the Company’s annual financial statements to the UK company registrar, Companies House, in respect of its financial year ending 31st December 2022 in accordance with section 441 and 442 of the England & Wales Companies Act 2006. The case management hearing has been adjourned multiple times, and is now scheduled for 8 December 2026. The directors are working with their legal advisers to defend the matter. Based on legal advice received from the Company’s external legal counsel, the Directors do not believe there is any potential impact to the Company directly because of the court summonses received by the Directors. The directors are not aware that any action is being taken against the Company at this time related to the late filing of its annual financial statements. The Directors are also confident that there is no direct impact on the Company as a result of the court summonses received by the Directors anticipated in the foreseeable future, based on the external legal advice received.

The reasons that the directors of the Company are late submitting the financial statements are the result of two key challenges faced by themselves and impacting the Directors and the Company’s finance function. The first being the need to restructure the wider Blockchain group’s business model as a result of the Financial Conduct Authority’s (‘FCA’) implementation of certain key regulations that were unforeseeable by the Company. Secondly, the well-documented 2022 crypto sector market collapse had significant consequences for the Company, including a significant reduction in the wider group’s workforce. This had a significant impact on management, administrative and finance functions’ time and availability, which has taken a period of time to stabilise and ensure that the required resources are in place.

This non-compliance does not have an impact on the Company’s financial position and performance as at 31 December 2021. The Directors of the Company and the Parent Company are fully committed to remediate the Company’s compliance with respect to all statutory annual filings of the Company. As part of their commitment, the Directors are taking appropriate steps to remediate the Company’s compliance with all statutory annual filing requirements as efficiently as possible. The steps that have been or will be put in place include:

• Recruiting additional appropriately qualified members of staff in the accounting function to provide the capacity and skills to prepare their financial statements and underlying books and records to be audited;

• Engaging an external professional accounting firm to further enhance the Company’s accounting functions;

• Establishing specific cross-functional groups within the Company, including the Directors, to prioritise, oversee and assign ownership of responsibilities to expedite the remediation process;

• Establishing a dedicated Company Secretarial function with the responsibility for corporate governance matters across the wider group, including the Company;

• Actively engaging with the Company’s external auditors regarding the completion of the audits for future years;

Should the Directors need to take additional action above those already in place, such as further recruitment, appointment of additional directors to provide greater capacity to support the working groups or expanding the scope of the external professional accounting firm’s project, they will do so.

There is a possibility that separate direct action may be taken against the Company directly as a result of the failure to submit financial statements to Companies House in the future. Based on legal advice received, the directors believe that this is unlikely, given the steps put in place, and the plans to continue to operate the business on the existing operating model for the foreseeable future.

However, the remediation process may take longer than the Directors anticipate, given the complexities in the business and the length of time that an audit of each year may take. Should further delays occur, this could cause further uncertainty over the potential actions Companies House could take against the Directors. This may result in further unforeseen actions against the Directors.

We have audited the financial statements of Blockchain Access UK Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud are: to identify and assess the risks of material misstatement of the financial statements due to fraud, through designing and implementing appropriate responses: and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. Our approach was as follows:

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant is the Companies Act 2006.

• We understood how the company is complying with those frameworks through discussions with the directors.

• We assessed the susceptibility of the company's financial statements to material misstatement including how fraud might occur by considering the key risks impacting the financial statements.

• We carried out a review of manual entries recorded in managements accounting records and assessed the appropriateness of such entries.

• We have assessed that the company's control environment is adequate for the size and operating model of such a company.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims; and

• reviewing correspondence with HMRC, relevant regulators, and the company’s legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing noncompliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.

Blockchain Access UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Minshull House, 67 Wellington Road North, Stockport, Cheshire, SK4 2LP.

The Company is a wholly owned subsidiary of Blockchain.com Group Holdings, Inc. (the "Parent Company"), a company registered in the Cayman Islands. The nature of the Company's operations and principal activities are set out in the Strategic Report.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in USD, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest $000.

The financial statements have been prepared under the historical cost convention, except where disclosed separately in the accounting policies where certain items are reported using a weighted average cost method ("WAC"). The principal accounting policies adopted are set out below.

For the year ended 31 December 2021 the Company had a net loss of $163.5m (2020: net loss of $285.1m). Total revenue of the Company was $1,969true.1m (2020: $429.6m) and total current assets were $1,862.2m (2020: $683.4m). The Directors have considered the going concern status taking account of the entity’s financial performance and the following matters/information:

The Company may face future negative impacts to its business and results of operations as a result of ongoing global geo-political events, which includes but is not limited to the conflict between Russia and Ukraine. As at the date these financial statements have been signed, these events have had no observed material adverse impact on the Company’s operations, capital raising ability, or on trading.

The Group, which the Company is a subsidiary of, underwent a significant global operational restructuring (from March 2022 to July 2023), to align with the changing regulatory landscape around the crypto sector. As a result, subsidiaries, other than the Company, now hold the contractual relationships with the Group’s clients, with the Company retaining the intellectual property of the exchange platform, as well as providing infrastructure services to those subsidiaries. The underlying legal agreements supporting these updated inter-company arrangements have short term, albeit market standard, notice periods and may therefore be withdrawn at short notice. It is noted that the infrastructure services are provided on a revenue split based on transactional volume at the rate of 65%. While the Company is integral to this updated global business model, it is also highly dependent on this model continuing in its deployed form and there being no adverse impact on the operations of the wider group which would limit cashflows and potentially limit continued working capital funding by its Parent Company.

The Directors have obtained, considered and discussed with the directors of the Parent Company the current Group operational performance, together with budgets and cash flow forecasts for the Group covering up to a twelve month period post approval of the financial statements, as approved by the management of the Parent Company. Based on these discussions, the Directors note that there will not be any material change in either the business activities of the Parent Company, the Company, nor the capital cost structure. The Directors have also evaluated the sustainability and feasibility of the future plans of the Company and its operating model, in light of the discussions with the Parent Company, which confirmed there was no intention for the Company to cease trading in the foreseeable future too.

Given the late filing of financial statements with Companies House, the Directors of the Company have received court summonses. The Directors have considered the court summonses they received relating to their failure to submit the Company’s annual accounts to the UK company registrar, Companies House, in respect of its financial year ending 31st December 2022, and the potential uncertainties related to the outcome of this process. As set out in the Note 1.15 - Laws and Regulations the case being brought is against the Directors rather than the Company and based on the advice received from external legal counsel, the Directors do not believe that there is a risk that court proceedings could be brought against the Company. The Directors are also of the view that there is no consequential impact from the case against the Directors that will impact the ability of the Company to continue as a going concern. The Directors have concluded that, although there is uncertainty in this respect, the uncertainty does not itself have a material impact on the ability of the Company to continue as a going concern.

The Parent Company has provided working capital assurances in the form of a non-binding letter of support that provides that the necessary funding will be forthcoming if and when it becomes required. The Directors have also concluded that the Parent Company and the Group are in a position to provide this financial support, should it be considered necessary. The non-binding letter of support records the financial support that the Parent Company will provide to ensure that the Company can meet its liabilities as and when they fall due, including any cash shortfalls and working capital needs that may arise for a period of at least 16 months from the date of approval of the Company’s 31 December 2021 Accounts. This is supplemented by a deed poll guarantee dated 22 March 2022, as amended, issued by the Parent Company (the “Parent Guarantee”) pursuant to which the Parent Company guarantees the financial obligations of the Company. The Directors anticipate that this funding, as required, will be forthcoming from the Parent Company. The combination of the non-binding letter of support and the Parent Guarantee will be necessary to ensure that the Company is able to meet its obligations as they fall due.

The Parent Company’s non-binding letter of support has been provided with the full knowledge of the above noted court summons against the Directors of the Company and after considering the potential consequential impact of the court summons against the Directors on to the Company.

Taking account of the above factors and considering the mitigations to risks to the ability of the Company to continue as a going concern, the Directors believe that the Company, with the Parent Company support, has adequate resources to continue as a going concern for at least twelve months from the date of approval of these financial statements. This conclusion is based upon the non-binding letter of support, the Parent Guarantee, and the inter-company arrangements in place to support the infrastructure services provided to other subsidiaries and the wider group. The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate.

The Company derives revenues principally from digital asset transaction services, comprising brokerage services, an OTC trading desk, an exchange where customers can buy, sell, and swap digital assets for a service fee, and from fees earned from custody and fiat and digital asset lending.

Revenue is measured at the fair value of the consideration received or receivable, net of amounts collected on behalf of third parties. Where consideration is received in digital assets, fair value is determined at the date the service is rendered.

The Company recognises revenue from the rendering of services when the outcome of the transaction can be estimated reliably, which is when all of the following conditions are satisfied: (a) the amount of revenue can be measured reliably; (b) it is probable that the economic benefits associated with the transaction will flow to the Company; (c) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and (d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. Where the amount of revenue is contingent on future events, revenue is recognised only when the amount can be measured reliably and it is probable that the economic benefits will be received.

For the Company's transaction services, these criteria are satisfied when the customer's order is executed and the related digital assets or fiat currency are delivered to the customer, at which point the service is complete. The Company defers any amounts received in advance of the recognition criteria being satisfied. The Company also provides fiat and digital asset loans to customers and earns lending fees on these loans. The lending fee is recognised on an accrued basis.

Brokerage Revenue

The Company provides brokerage services that allow retail customers to convert one crypto currency to another. Contracts for brokerage services are defined at the transaction level and do not extend beyond the service related to the specific transaction. Each crypto currency conversion is considered a single performance obligation. All such transactions are fulfilled by the Company from its own inventory with no third party involved. As a result, the Company recognises revenue from these transactions on a gross basis. The Company recognises the total fair value of crypto currency received as revenue at the point in time the transaction is executed. The cost of the crypto currency, less impairment recognized, used to fulfil the customer order is accounted for as cost of sales.

OTC Revenue

The Company enters into crypto currency sale agreements with institutional customers through its OTC trading desk. Similar to brokerage services, contracts for OTC trading services are defined at the transaction level. For each transaction, the Company has a single performance obligation to price, source, settle and ultimately, transfer crypto to the customer. The Company always has custody and control of the crypto currency prior to sale to the customer through the OTC desk. The Company recognises OTC sales on a gross basis, with revenue recognised at the point in time the transaction is executed. The cost of the crypto currency used to fulfil the OTC order is accounted for as cost of sales.

Exchange Revenue

The Company operates a crypto currency trading platform that allows both institutional and retail customers to buy, sell and swap crypto currency with fiat and other crypto currency. Contracts with Exchange customers are open ended and can be terminated by either party at any time without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the services related to the specific transaction. The Company’s promise to Exchange customers is: 1) to provide a trade matching service when an order is placed by a customer, and 2) to fulfil the customer order by delivering crypto currency. These promises combine to form one performance obligation. Revenue is recognised at the point in time when the trade is executed.

For the majority of Exchange transactions, the Company’s role is to match customers who are buying and selling crypto currency on the Exchange and facilitate the delivery of crypto currency from the seller to the buyer. For the transactions in which the Company is fulfilling the customer order, judgment is required in determining whether the Company is the principal or the agent in fulfilling the customer order, based on whether the Company controls the crypto currency before it is transferred to the buyer. The Company concluded it does not control the crypto currency in Exchange transactions as, (1) the seller remains the beneficial owner of the crypto currency until the transaction is executed, and (2) the Company does not have the ability to direct the use of the crypto currency in customers’ accounts. As part of our evaluation of control, the Company also reviewed other specific indicators of control to support our conclusion, including that the Company is not primarily responsible for delivering the crypto currency to the buyer, nor does the Company bear any inventory risk before or after the crypto currency is delivered to the buyer. The Company also does not have discretion in establishing the settlement price for the crypto currency, which is determined by the market exchange rate on the Exchange. As a result, the Company acts as the agent in fulfilling the customer order for these transactions and recognises the related revenue on a net basis.

For transactions where the Company acts as the counterparty to the customers by fulfilling the orders from the Company’s own inventory, no third party is involved in delivering crypto currency to the customer and therefore, the Company has concluded it is acting as a principal to fulfilling crypto sale trades. As a result, the Company recognises revenue from these transactions on a gross basis.

Lending Fee Revenue

The Company provides lending facilities in fiat and digital assets to customers and earns a lending fee, which is accrued daily as revenue based on a contractual fee percentage of the outstanding balance. The fee is collected in arrears on a weekly, monthly or quarterly basis or at maturity. These contracts may be open ended or have a fixed term, but they are all considered day to day for accounting purposes, as contracts can be terminated by either party at any time without incurring a substantive penalty. Lending is a service rendered as a series of transactions, of daily events satisfied over time, as customers simultaneously receive and consume the benefits of the lending service on a daily basis. The Company recognises revenue daily based on the fair value of the daily fee calculation.

Custody Revenue

The Company provides custody services to institutional counterparties, holding and safeguarding crypto currency assets on their behalf. Crypto currency assets held under custody remain the property of the counterparty and are not recognised as assets of the Company.

The Company earns a custody fee for the provision of these services under the terms of the relevant custody agreement. Custody is considered a series of services satisfied over time, as counterparties simultaneously receive and consume the benefit of the safekeeping service throughout the period of the arrangement. Revenue is accordingly recognised on an accruals basis over the period to which the fee relates.

Gains and losses on sales of digital assets

The Company recognises realised gains from digital assets sales on a gross basis, when such digital assets are not considered financial instruments and are accounted for as inventory, consistent with the Company’s revenue policy. The Company acts as a principal in these transactions which requires gross treatment for revenue and for corresponding costs. As a principal, the Company has control over the digital asset before it is transferred to the customer. The Company recognises the gross amount of cash or total fair value of crypto currency received as revenue at the point in time the transaction is executed. The cost of the crypto currency used, or cash paid to fulfil the customer order is accounted for as cost of sales. Unrealised gains and losses on amounts owed in digital assets consisted of the Company’s digital assets borrowed, digital assets collateral payable, digital assets interest earning accounts payable and other payables in digital assets. Such unrealised gains or losses are accounted for at fair value, in Other operating income. Upon settlement of the amounts owed in digital assets, the unrealised gains or losses are recorded as realised.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software is amortised on a straight-line basis over its estimated useful economic life from the date it is available for use. As at yearend, no amortisation has been recognised as the software was not yet available for use.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

In the ordinary course of business, the Company invests excess cash in institutional funds managed by a third party. Additionally, during the period, the Company invested in certain digital assets index funds. The investments in funds are treated as an equity security, reported at fair value at each reporting date, with changes in fair value recognized as unrealized gain on investments on the Statements of Comprehensive Income.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

The gain arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset when the sale proceeds exceed the carrying value and is credited to profit or loss.

The gain arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset when the sale proceeds exceed the carrying value and is credited to profit or loss.

Digital assets are comprised of the following:

Digital assets

Digital assets primarily comprise crypto currency and other digital assets. The Company transacts with certain crypto currencies and other digital assets, which include, but not limited to, Bitcoin, Ethereum and Bitcoin Cash.

All crypto currency and other digital assets are classified as inventory. At inception, crypto currency and other digital assets are initially recognized at cost. Where digital assets are received as consideration, cost is their fair value at the date of receipt. Cost is determined using the weighted average cost method. At the reporting date these assets are measured at the lower of cost and net realisable value. The estimated net realisable value of crypto currency assets are derived from www.coinmarketcap.com.

Digital assets lent to customers

Digital assets lent comprise crypto currency assets that are being loaned or pledged in relation to the Company’s crypto lending and borrowing business. These digital assets are classified as inventory. At inception these assets are recorded at transaction price.

The Company regularly and at least at each reporting date assesses whether its crypto currency and other digital assets are impaired by comparing the carrying amount of each crypto currency and other digital asset to its estimated net realisable value. Where the circumstances that previously caused digital assets to be written down no longer exist, or there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down is reversed, limited to the amount of the original write-down. At the reporting date these assets are measured at the lower of cost and net realisable at that date derived from www.coinmarketcap.com.

Cash and cash equivalents within the Balance Sheet include cash held at bank and third party crypto exchanges.

Custodial cash held at bank and custodial funds due to customers

Custodial cash held at bank represents customer fiat funds deposited into their Blockchain.com wallets. Custodial cash held at bank is restricted for use by the respective customers on the Exchange. The Company operates a number of deposit bank accounts and holds customer funds in multiple currencies to facilitate transactions in a timely manner. Deposits are maintained at financial institutions in Europe, the US and other countries.

Custodial funds due to customers represent the corresponding liability in respect of such customer deposits.

For the purposes of the Statement of Cash Flows, cash and cash equivalents include cash held at bank and in hand and custodial cash held at bank.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The Company’s financial statements are presented in US Dollars, or USD, which is also the Company’s functional currency as this is the currency used in the primary economic environment in which the Company operates. Foreign currency transactions are translated at the rates ruling when they occurred. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet dates. Foreign exchange gains and losses are recognised in the Statement of Comprehensive Income, in other operating (expense)/ income.

Other assets

Other assets are comprised of the following:

Loan receivable

The Company provides lending facilities in government issued currency (“fiat”) to customers and earns a lending fee. Loans are initially recognised at fair value, which is the cash given to originate the loan, net of transaction costs and subsequently measured at amortised cost, less any impairment charges. Fiat loans may be collateralised by digital assets, and the Company may have rehypothecation rights over the digital assets posted as collateral. When digital assets are initially received as collateral they are not recognised as an asset by the Company, in line with the requirements of FRS 102, section 11.35. Once the collateral received has been rehypothecated, lent or sold, as permitted by the terms of the agreement, the Company records the proceeds from the transaction with a corresponding collateral payable liability representing the Company’s obligation to return the collateral to the counterparty.

Investments in derivatives

Investments in derivatives comprise derivative financial instruments held by the Company. Such instruments are initially recognised at fair value and are subsequently measured at fair value at each reporting date. Realised and unrealised gains and losses arising from changes in fair value, settlement, exercise, expiry or disposal of derivative instruments are recognised in profit or loss.

Amounts owed in digital assets

Amounts owed in digital assets comprises amounts held on behalf of third-party investors and amounts owed on the Company’s lending business, including digital assets borrowings. These balances are carried at the amounts that are equal to the best estimate of the amount that would be required to settle the obligation as of the reporting date, which approximates the fair value. Fair value is derived from www.coinmarketcap.com. Interest expense on amounts owed in digital assets is included in cost of sales. Digital assets held in custody on behalf of customers and other group companies are not recognised in the balance sheet. The beneficial interest in those assets is retained by the counterparty and the economic benefits accrue to them, and accordingly neither the assets nor a corresponding obligation is recognised.

Laws and regulation

The directors of the Company each received a court summons dated 30th May 2024 relating to their failure to submit the Company’s annual financial statements to the UK company registrar, Companies House, in respect of its financial year ending 31st December 2022 in accordance with section 441 and 442 of the England & Wales Companies Act 2006. The case management hearing has been adjourned multiple times, and is now scheduled for 8 December 2026. The directors are working with their legal advisers to defend the matter. Based on legal advice received from the Company’s external legal counsel, the Directors do not believe there is any potential impact to the Company directly because of the court summonses received by the Directors. The directors are not aware that any action is being taken against the Company at this time related to the late filing of its annual financial statements. The Directors are also confident that there is no direct impact on the Company as a result of the court summonses received by the Directors anticipated in the foreseeable future, based on the external legal advice received.

The reasons that the directors of the Company are late submitting the financial statements are the result of two key challenges faced by themselves and impacting the Directors and the Company’s finance function. The first being the need to restructure the wider Blockchain group’s business model as a result of the Financial Conduct Authority’s (‘FCA’) implementation of certain key regulations that were unforeseeable by the Company. Secondly, the well-documented 2022 crypto sector market collapse had significant consequences for the Company, including a significant reduction in the wider group’s workforce. This had a significant impact on management, administrative and finance functions’ time and availability, which has taken a period of time to stabilise and ensure that the required resources are in place.

This non-compliance does not have an impact on the Company’s financial position and performance as at 31 December 2021. The Directors of the Company and the Parent Company are fully committed to remediate the Company’s compliance with respect to all statutory annual filings of the Company. As part of their commitment, the Directors are taking appropriate steps to remediate the Company’s compliance with all statutory annual filing requirements as efficiently as possible. The steps that have been or will be put in place include:

• Recruiting additional appropriately qualified members of staff in the accounting function to provide the capacity and skills to prepare their financial statements and underlying books and records to be audited;

• Engaging an external professional accounting firm to further enhance the Company’s accounting functions;

• Establishing specific cross-functional groups within the Company, including the Directors, to prioritise, oversee and assign ownership of responsibilities to expedite the remediation process;

• Establishing a dedicated Company Secretarial function with the responsibility for corporate governance matters across the wider group, including the Company;

• Actively engaging with the Company’s external auditors regarding the completion of the audits for future years;

Should the Directors need to take additional action above those already in place, such as further recruitment, appointment of additional directors to provide greater capacity to support the working groups or expanding the scope of the external professional accounting firm’s project, they will do so.

There is a possibility that separate direct action may be taken against the Company directly as a result of the failure to submit financial statements to Companies House in the future. Based on legal advice received, the directors believe that this is unlikely, given the steps put in place, and the plans to continue to operate the business on the existing operating model for the foreseeable future.

However, the remediation process may take longer than the Directors anticipate, given the complexities in the business and the length of time that an audit of each year may take. Should further delays occur, this could cause further uncertainty over the potential actions Companies House could take against the Directors. This may result in further unforeseen actions against the Directors.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The Company's critical accounting judgements and estimates include the following:

The Company assesses impairment of non financial assets, including digital assets, regularly and at least on each reporting date by evaluating conditions specific to the Company and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined, which is primarily based on an observable fair value of an asset less cost of disposal, if any, and incorporates a number of key estimates and assumptions.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for impairment. If evidence of impairment is found, an impairment loss is recognised in Other operating expenses. The impairment loss for these financial assets is measured as the difference between the asset’s carrying amount and the present value of estimated cash flows discounted at the asset’s original effective interest rate, which incorporate a number of key estimates and assumptions.

The impairment loss for financial assets measured at amortised cost is measured as the difference between the asset’s carrying amount and the present value of estimated cash flows discounted at the asset’s original effective interest rate.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset’s carrying amount and best estimate of the recoverable amount, based on the Company’s estimate of the amount it would receive for the asset if it was sold as of the balance sheet date.

The Company receives digital assets as collateral for digital assets lent. When digital assets are initially received as collateral they are not recognised as an asset by the Company, in line with the requirements of FRS 102, section 11.35. Once the collateral received has been rehypothecated, lent or sold, as permitted by the terms of the agreement, the Company records the proceeds from the transaction with a corresponding collateral payable, measured at fair value, representing the Company's obligation to return the collateral to the counterparty.

At 31 December 2021, the Company held a loan receivable of $230,145,848 from Three Arrows Capital Ltd, unsecured at the reporting date. The directors have concluded that objective evidence of impairment existed at that date within FRS 102 paragraph 11.22, principally the impairment of the borrower’s largest disclosed asset throughout the year and the absence of any recovery of principal at successive amendments of the facility. That conclusion, and the treatment of the borrower’s subsequent liquidation as an adjusting event under paragraph 32.5, are significant judgements.

The impairment loss of $171,569,053 has been measured under paragraph 11.25(a) as the carrying amount less the present value of estimated future cash flows discounted at the original effective interest rate of 3.86%. The estimated cash flows are the distributions expected from the borrower’s liquidation, of which $68,511,313 is expected on the Company’s total claim attributable to loans outstanding on 31 December 2021. The expected total recovery and the timing of the remaining distributions are key sources of estimation uncertainty; the liquidation remains in progress and the amount ultimately recovered may differ.

For the majority of Exchange transactions, the Company’s role is to match customers who are buying and selling crypto currency on the Exchange and facilitate the delivery of crypto currency from the seller to the buyer. For the transactions in which the Company is fulfilling the customer order, judgment is required in determining whether the Company is the principal or the agent in fulfilling the customer order, based on whether the Company controls the crypto currency before it is transferred to the buyer. The Company concluded it does not control the crypto currency in Exchange transactions as, (1) the seller remains the beneficial owner of the crypto currency until the transaction is executed, and (2) the Company does not have the ability to direct the use of the crypto currency in customers’ accounts. As part of our evaluation of control, the Company also reviewed other specific indicators of control to support our conclusion, including that the Company is not primarily responsible for delivering the crypto currency to the buyer, nor does the Company bear any inventory risk before or after the crypto currency is delivered to the buyer. The Company also does not have discretion in establishing the settlement price for the crypto currency, which is determined by the market exchange rate on the Exchange. As a result, the Company acts as the agent in fulfilling the customer order for these transactions and recognises the related revenue on a net basis. For transactions where the Company acts as the counterparty to the customers by fulfilling the orders from the Company’s own inventory, no third party is involved in delivering crypto currency to the customer and therefore, the Company has concluded it is acting as a principal to fulfilling crypto sale trades. As a result, the Company recognises revenue from these transactions on a gross basis.

Custodial cash held at bank represent restricted cash and cash equivalents maintained in segregated Company bank accounts that are held for the exclusive benefit of customers. The Company restricts the use of the customer deposits held at bank to meet regulatory requirements and classifies the assets as current based on their purpose and availability.

The average monthly number of persons (including directors) employed by the company during the year was:

There were no staff costs during the year. The Company's Directors were remunerated by another group Company. Total directors' remuneration allocated to the Company for services provided, including intercompany recharges, is $412k (2020: $803k).

The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

In 2021, the Company made investments totalling $5.37m in two unlisted private companies. At 31 December 2021, the fair market value of investments was $14.9m (2020: $15.3m).

Digital assets primarily comprise crypto currency assets, including but not limited to Bitcoin, Bitcoin Cash Stellar, Ethereum and USDT. As at 31 December 2021, digital assets were stated at the lower of cost and net realisable value, resulting in the recognition of an impairment charge of $73.1m (2020: $52.8m). The net book value of digital assets as at 31 December 2021 was $492.2m (2020: $272.5m).

Digital assets totaling $79.9m were pledged as collateral for borrowings the company has received as at 31 December 2021 (2020: $93.8m). Digital assets pledged as collateral are generally calculated as a percentage of the borrowed amount, if during the term of the loan the borrowed amount increases, the Company may be required to pledge additional collateral. Upon repayment of the borrowed amount, the collateral pledged is returned to the Company.

Digital assets held in custody on behalf of customers and other group companies are not recognised in the balance sheet. At 31 December 2021 digital assets held in custody amounted to $462.4m (2020: $179m), with an obligation to return those assets of the same amount.

Digital assets lent to customers comprise short-term crypto loan receivables. As at 31 December 2021, the gross carrying value of these loans amounted to $1,257.m (2020: $400.5m). An impairment provision of $297.6m (2020: $187.2m) has been recognised against these balances, resulting in a net carrying value of $960.2m (2020: $213.3m). The loans are either callable on demand or due within one year. No loans had a maturity date greater than one year but within two years (2020: $nil).

Loans receivable, net of impairment, consist of $124.9m (2020: $83.8m) of loans that are repayable on demand or fall due within one year. No loans (2020: $nil) had a contractual maturity date greater than one year.

At 31 December 2021, the Company held loans and advances of $10.8m to Clark, Sharp & Reynolds, LLC, trading as Coinsource. The loans were unsecured and did not have a contractual repayment date. Management concluded that objective evidence of impairment existed at the reporting date and recognised an impairment loss of $10.8m, reducing the carrying amount of the loans to nil.

The Company held derivative financial assets of $24.7m (2020: $15.6m) at 31 December 2021. An unrealised gain of $11.6m (2020: gain of $3.0m) and a realised gain of $24.7m (2020: gain of $2.9m) were recognised in the Statement of Comprehensive Income.

Payables in digital assets comprise amounts due to institutional counterparties of $35.0 million (2020: $0.2 million).

Custodial funds due to customers comprise liabilities in respect of customer interest-bearing accounts of $755.5 million (2020: $99.5 million) and customer fiat balances held within Blockchain.com wallets of $57.1 million (2020: $32.7 million).

Accruals and deferred income comprise accrued interest payable on borrowings of $9.9 million (2020: $16.4 million) and other accrued liabilities of $1.6 million (2020: $0.4 million).

Comparative amounts have been reclassified to enhance the presentation of liabilities and better reflect the nature of the underlying balances. As at 31 December 2020, fiat borrowings of $29.4 million, previously included within crypto borrowings, have been presented separately as fiat borrowings. In addition, liabilities relating to customer interest-bearing accounts of $99.5 million, previously included within accruals and deferred income, have been reclassified to custodial funds due to customers to reflect the substance of the underlying obligation. These reclassifications had no impact on total liabilities, net assets, profit for the financial year, or shareholders' funds as previously reported.

Crypto borrowings balances are carried at the amounts that are equal to the best estimate of the amount that would be required to settle the obligation as of the reporting date, which approximates the fair value, which is derived from www.coinmarketcap.com. The range of interest rates for these loans is between 0% and 18%.

The following are the major deferred tax liabilities and assets recognised by the company:

Deferred tax assets of $112.7m (2020: $54.2m) have not been recognised, comprising; $103.9m in respect of tax losses with no expiry date of $415.5m, $8.8m in respect of interest restrictions and $25k in respect of fixed assets. The deferred tax assets are not recognised until it becomes probable that there will be future taxable profit available for offset.

The Finance Act 2021, substantively enacted on 24 May 2021, increased the main rate of UK corporation tax from 19% to 25% with effect from 1 April 2023. Deferred tax balances at 31 December 2021 have therefore been measured at 19% or 25% (2020: 19%), depending upon the rate which will apply when the timing differences are expected to reverse.

The company's share capital consists of one ordinary share with a par value of $0.013 (£0.1p) that is fully owned by the parent.

In 2021, the Company executed transactions with related parties, which included key management personnel and related parties with significant influence over the Company.

Key management personnel include all directors and certain senior managers across the group who together have the authority for planning, directing, and controlling the activities of the group. No key management personnel received remuneration from the company during the year (2020: $nil). For director’s remuneration, refer to Note 6. The Company has taken advantage of the disclosure exemption under Section 33.1A of FRS 102 not to disclose transactions with other wholly owned members of the Group.

In addition to compensation paid, transactions with key management personnel primarily consisted of exchange sales and purchase of digital assets. Included in revenue is $567k and $148k for the years ended 31 December 2021 and 31 December 2020, respectively.

During the reporting period, related parties with significant influence sold to, and purchased from, the Company digital assets totaling $9.2m (2020: $63m). Loans receivable include loans to related parties of $nil, and $2.5m, for the years ended 31 December 2021 and 31 December 2020, respectively. Digital assets lent to related parties of $54.9m and $24.4m, for the years ended 31 December 2021 and 31 December 2020, respectively.

Post reporting date events

In accordance with accounting standards affecting disclosures of subsequent events, the Company evaluated subsequent events for recognition and disclosure to 22 September 2026, the date at which these financial statements were available to be issued. Management concluded that, other than those noted below, no material subsequent events have occurred since 31 December 2021 that require recognition or disclosure in the financial statements.

In February 2022, the Company underwent a global restructuring to align with the changing regulatory landscape in crypto. Beginning in March 2022 and ending in July 2023, the Company restructured its activities. The result being Group subsidiaries abroad housing contractual relationships with clients, while the Company retained the intellectual property of the digital platform to continue to provide custodial infrastructure services to those subsidiaries.

Three Arrows Capital (3AC), a Singapore-based hedge fund, filed for bankruptcy in July 2022. The Company incurred a loss as a result of lending to 3AC which was ultimately recognised by the 3AC joint liquidators in the bankruptcy estate at $599,593,557. The Company sold a portion of the claim in order to recoup some of the loss. The Company remains a creditor in the insolvency estate. Distributions made against the claim have totaled $105,790,061 to date.

In November 2022, FTX, a Bahamas-based cryptocurrency exchange, filed for bankruptcy. FTX was a leading centralised cryptocurrency exchange specializing in derivatives and leveraged products. The Group’s loss position amounted to $3,664,872.76 and was borne by the Company’s affiliated entity, located in Singapore. On 31 March 2023, the Group assigned its claims against FTX to a credit company for an aggregate amount of $549,730.93. The financial impact on the Company was immaterial, at around $24,000.

March 2023 saw the collapse of Silvergate and Signature Bank. The Company moved all funds held at banks affected by these closures and did not incur any losses.

On March 5, 2024, Moov.law (Belgium law firm) sent a demand letter to various Blockchain entities, including the Company, on behalf of Geoffroy Brixhe threatening legal action concerning a purported unauthorized transaction from January 2021 of 1.10810062 BTC in the user’s non-custodial wallet. The Company’s internal diligence revealed no wrongdoing on the Company’s part and suggested that the user’s wallet was likely compromised by a bad actor. A legal action was initiated in Belgium court on September 18, 2025. The parties have exchanged preliminary evidence. The court is expected to issue an order providing a timetable for the exchange of written submissions through 2026 and 2027, with a hearing for oral pleadings anticipated to take place sometime in 2027.

The Directors of the Company each received a court summons dated 30th May 2024 relating to the Company’s failure to submit its accounts to Companies House in respect of its financial year ending 31st December 2022. The case management hearing has been adjourned multiple times, and is now scheduled for 8 December 2026. The directors are working with their legal advisers to defend the matter. See Note 1.15 for further details.

An agreement with Griid Infrastructure LLC came to an end in June 2024, when the Company agreed to a full release of debt, security interests and other claims to the value of $68m inclusive of $10.8m of interest. The settlement was reached under the Griid Credit Agreement at a substantial discount, with the Company receiving $15m as full and final consideration for the release of all obligations under the agreement.

On July 13, 2024, Celsius Network LLC, et al (post-effective date debtors) filed a preference action against the Company seeking recovery of purported Avoidable Transfers (which the debtors claim is valued $12,905,828.21) and unauthorized setoffs. The parties reached a settlement in principle for an installment plan totaling $1.75m.

The immediate and ultimate parent company and controlling party is Blockchain.com Group Holdings, Inc. (formerly known as Blockchain Luxembourg S.A.). The address of the registered office of the Company is P.O. Box 144, Suite 3119, 9 Forum Lane, Camana Bay, George Town, Grand Cayman, KY1-9006, Cayman Islands.