Registered number:
12495288
(England and Wales)
BITGO PRIME UK LTD.
DIRECTORS' REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
|
BITGO PRIME UK LTD.
COMPANY INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZEDRA Corporate Reporting Services (UK) Limited
|
|
|
|
|
|
BITGO PRIME UK LTD.
CONTENTS
|
|
|
|
Independent Auditors' Report
|
|
Statement of Profit or Loss and Other Comprehensive Income
|
|
Statement of Financial Position
|
|
Statement of Changes in Equity
|
|
|
|
Notes to the Financial Statements
|
|
|
BITGO PRIME UK LTD.
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the period ended 31 December 2020.
The Company's principal activity is that of borrowing digital currency assets and lending these to their parent company, BitGo Prime, LLC, for a lending fee.
The directors who served during the period were:
N Carmi
(appointed
3 March 2020
)
|
D Jordan
(appointed
3 March 2020
)
|
J Morgan (appointed
3 March 2020
, resigned
28 May 2021
)
|
R W Rutherford
(appointed
3 March 2020
, resigned
31 January 2021
)
|
The following individual was appointed as director following the year end but before the approval of these financial statements:
M Belshe (appointed 25 May 2021)
The loss for the period, after taxation, amounted to $
38,223,843.
No dividends were paid or payable.
Directors' responsibilities statement
|
The directors are responsible for preparing the Directors' Report and the financial statements, in accordance with applicable law.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006.
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 the financial statements, the directors are required to:
∙
select suitable accounting policies and then apply them consistently;
∙
make judgements and estimates that are reasonable and prudent;
∙
state whether they have been prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements;
∙
assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙
use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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 enable them to ensure that the financial statements comply with the Companies Act 2006. They
|
BITGO PRIME UK LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2020
are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The Company expects to continue its activities in the same format. The directors are monitoring the state of the crypto-regulation in the UK which may have an impact on the business.
Disclosure of information to 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.
Small companies' exemption note
|
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
|
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BITGO PRIME UK LTD.
We have audited the financial statements of BitGo Prime UK Ltd. for the period ended 31 December 2020 which comprise
the Statement of Profit or Loss and Other Comprehensive Income
,
the Statement of Financial Position
,
the Statement of Cash Flows
,
the Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies set out on pages 15 - 17. The financial reporting framework that has been applied in their preparation is applicable law and International Accounting Standards in conformity with the requirements of the Companies Act 2006.
In our opinion the financial statements:
∙
give a true and fair view of the state of the Company's affairs as at 31 December 2020 and of its loss for the period then ended;
∙
have been properly prepared in accordance with International Accounting Standards; and
∙
have been prepared in accordance with the requirements of the Companies Act 2006.
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 auditors' 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 United Kingdom, including the Financial Reporting Council'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. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included but was not limited to:
∙
consideration of the available digital currency assets held by the parent company to facilitate returns to UK lenders; and
∙
consideration of the availability of financing from within the group headed by BitGo Holdings, Inc. based on the most recent financial statements and management accounts.
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.
We draw attention to the nature of the entity as a borrower and lender of digital currency assets. Digital currency assets are commonly called crypto-assets and include a variety of digital assets which exist only in digital format within the blockchain. Presently, there is no formal International Accounting Standard on which to base the recognition and measurement of these digital currency assets and therefore only an accepted approach. The accounting policies at notes 5.5 to 5.9 describe how the Company has recognised these assets and the corresponding liabilities associated with borrowing digital currency assets.
|
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BITGO PRIME UK LTD. (CONTINUED)
The existing accounting policies are a combination of generally accepted practice in accordance with the requirements of International Accounting Standards for intangible assets and the accounting policies adopted by the parent company to meet the requirements of US GAAP.
Our audit approach has been to confirm that the Company are using appropriate accounting policies to present the financial position and performance for the period in a true and fair manner.
The current accounting approach gives rise to a significant mismatch between the borrowed and loaned assets, resulting in a material unrealised loss in the Statement of Profit or Loss.
As explained by the notes to the financial statements, the Company is only liable for the return of digital currency assets in their present form and not a corresponding fiat currency. This means that the differences between the assets and liabilities presented in the Statement of Financial Position are unlikely to be truly reflected on return of the digital assets to lenders.
Our opinion is not modified in this respect.
The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
|
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙
the Directors' Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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 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
|
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BITGO PRIME UK LTD. (CONTINUED)
∙
we have not received all the information and explanations we require for our audit; or
∙
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement on page 3, 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.
Auditors' responsibilities for the audit of the financial statements
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 auditors' 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙
the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙
we identified the laws and regulations applicable to the Company through discussions with directors and other management;
∙
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006 and taxation legislation;
∙
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
∙
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
We identified that non-compliance with relevant financial reporting standards was an area where these financial
|
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BITGO PRIME UK LTD. (CONTINUED)
statements were most susceptible to material misstatement and fraud risk. We identified that there is no specific financial reporting standard relating to digital currency assets and the ongoing trade of the entity. We therefore conducted appropriate reviews of supporting literature and generally accepted approaches used by other audited companies. We have ensured that the financial statements adequately disclose the financial reporting standards adopted and the recognition criteria applied. We have confirmed that the assets and liabilities are recognised in conformity with these standards.
To address the risk of fraud through management bias and override of controls, we:
∙
assessed whether judgements
made in determining the accounting estimates 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;
∙
reviewing contracts with lenders and the parent company; and
∙
enquiring of management as to actual and potential litigation and claims.
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 or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
This report is made solely to the Company's members, as a body, 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 members those matters we are required to state to them in an auditors' 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 members, as a body, for our audit work, for this report, or for the opinions we have formed.
Dominic King ACA
(Senior Statutory Auditor)
for and on behalf of
ZEDRA Corporate Reporting Services (UK) Limited
Chartered Accountants and Statutory Auditors
New Penderel House
4th Floor
283-288 High Holborn
London
United Kingdom
WC1V 7HP
2 March 2022
|
BITGO PRIME UK LTD.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2020
|
|
|
|
10 months ended
31 December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
The notes on pages 15 to 22 form part of these financial statements.
|
|
BITGO PRIME UK LTD.
REGISTERED NUMBER:
12495288
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other liabilities
|
|
|
Digital currency liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued capital and reserves
|
|
|
|
|
|
|
|
|
|
|
|
The financial statements on pages 9 to 22 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 15 to 22 form part of these financial statements.
|
BITGO PRIME UK LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 DECEMBER 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
|
|
|
|
|
|
Total contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
BITGO PRIME UK LTD.
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2020
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net unrealised loss arising on digital currency borrowings designated as at fair value through profit or loss
|
|
|
|
|
|
|
|
|
Movements in working capital:
|
|
|
Increase in trade and other receivables
|
|
|
|
|
|
Increase in trade and other payables
|
|
|
Cash generated from operations
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
Cash flows from investing activities
|
|
|
Acquisition of digital currency assets
|
|
|
Net cash used in investing activities
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Digital currency borrowings
|
|
|
Net cash from financing activities
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
|
|
The notes on pages 15 to 22 form part of these financial statements.
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
BitGo Prime UK Ltd.
(the 'Company') is a limited company incorporated in England and Wales. The Company's registered office is at New Penderel House, 4th Floor, 283-288 High Holborn, London, WC1V 7HP. The Company's principal activity is that of borrowing digital currency assets and lending these to their parent company, BitGo Prime, LLC, for a lending fee.
The financial statements have been prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006.
Details of the Company's accounting policies are included in note 5.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the financial statements and their effects are disclosed in note 4.
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
|
|
|
|
Digital currency borrowings
|
Fair value through profit and loss
|
|
2.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 3 March 2020
|
The following items have not had a material impact on the Company's financial impact:
∙
Conceptual Framework - amendments to references in the conceptual framework in IFRS standards
∙
Definition of a business (amendments to IFRS 3)
∙
Amendments to IAS 1 and IAS 8 - definition of material
∙
Interest Rate Benchmark Reform - amendments to IFRS 9, IAS 39 and IFRS 7
|
|
New standards, interpretations and amendments not yet effective
|
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2020 reporting periods and have not been early adopted by the Company. None of these are expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions.
The directors do not expect any material impact as a result of adopting the standards and amendments
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
2.
Basis of preparation (continued)
|
ii) New standards, interpretations and amendments not yet effective (continued)
|
listed above in the financial year they become effective.
The Company has adopted UK-adopted IAS from 1 January 2021 following the end of the formal transition period for the UK leaving the EU. At the date of application, both UK-adopted and IAS and EU-adopted International Financial Reporting Standards (IFRSs) will be the same.
|
Functional and presentation currency
|
These financial statements are presented in US dollars, which is the Company's functional currency. All amounts have been rounded to the nearest US dollar, unless otherwise indicated.
|
Accounting estimates and judgements
|
4.1
Judgement
Valuation of digital currency assets
Management determine whether digital currency assets are impaired based on the closing price of an asset on a relevant exchange. There is some judgement in considering whether the recoverable amount of the asset has fallen below the carrying value as digital currencies are highly volatile. Therefore, management use their best judgement to record impairments only when the digital assets are not expected to rise before the end of the reporting period. Management have determined that based on the year end prices of digital currencies there is no impairment to be recorded in these financial statements.
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
5.
Accounting policies
The Company is in a net liability position due to the measurement differences arising from the accounting framework for recognising digital currency assets compared to the corresponding digital currency borrowings.
The Company's business activities expose it to a risk of default from its borrower, the parent company, BitGo Prime, LLC. In order to mitigate some of this risk, the Company and its Group obtain collateral from its borrowers as security in the event of borrower default. As of 31 December 2020 the ultimate parent company, BitGo Holdings, Inc., had received $32.6 million in digital currency assets as collateral. The directors regularly monitor this to provide comfort in relation to the Company's ability to return digital currency assets to its lenders. The Company has received written confirmation from its ultimate parent company BitGo Holdings, Inc., that the wider group will continue to support the activities of the Company for at least 12 months from the approval of these financial statements.
The Company generates revenues from lending fees charged to its parent company, BitGo Prime, LLC, these lending fees are a variable mark up on the fees payable to its own lenders.
The directors have considered the working capital requirements of the Company and the available working capital of the parent company to continue supporting the entity for at least 12 months from the date of approval of these financial statements. For these reasons, the directors have prepared these financial statements on the going concern basis.
Revenue is recognised based on a master lending agreement with the parent company, BitGo Prime, LLC. The Company lends digital currency assets to its parent company in return for a lending fee. The lending fee is calculated as a mark up on the Company's cost of borrowing digital currency assets from third parties.
Revenues generated from lending digital currency assets to the parent company are recognised evenly over the period of the loan.
The Company does not have any scenarios where the period between the lending of assets and receipt of payment from the parent company exceeds one year. As a result, the Company does not adjust for the time value of money.
The Company borrows digital currency assets from third party lenders for a borrowing fee. The fee is a percentage calculation based on the daily market rate of assets borrowed. The fee is recognised evenly over the borrowing period and payable to the lender on return of the digital currency asset.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from ‘profit before tax’ as reported in the Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
5.
Accounting policies (continued)
The Company recognises digital currency assets, acquired through borrowing in the normal course of its trade, as intangible assets. This is in line with the generally accepted approach to accounting for digital currency assets which are not held for resale, in the absence of a dedicated International Financial Reporting Standard.
Digital currency assets consist of coins or tokens that are built on a blockchain. The Company acquires digital currency assets through borrowings from lenders.
Where digital currency assets are subsequently loaned to the parent company, BitGo Prime, LLC, these continue to be presented as intangible assets by the Company as they do not meet the derecognition criteria set out by IAS 38.
Digital currency assets are derecognised on disposal of the assets or when no future economic benefit is expected to arise from their use or disposal. Disposal of the asset is considered to be when the Company returns control of the digital currency assets to its lenders. Any gain or loss arising from the disposal of digital currency assets is only expected to be the difference between the cost of the asset and its carrying value, this is recognised in the Statement of Profit or Loss in the period in which the disposal takes place.
The Company reviews for impairment of digital currency assets annually or when evidence of impairment exists. An impairment loss is recorded when the carrying value of the digital currency asset exceeds the estimated fair value based on the closing price on a relevant exchange. Management use a generally accepted tool for obtaining current market values as a basis for their fair value measurement.
Impairment losses can be reversed in accordance with IAS 36 when there is any indication that an impairment loss recognised for an asset no longer exists or may have decreased. If any such indication exists then the Company estimates the recoverable amount of the asset and reverses the impairment loss.
Financial assets are recognised initially at cost and subsequently at amortised cost.
The Company's financial assets include intercompany loans which are unsecured, interest free and repayable on demand.
Financial liabilities are measured initially at fair value when the Company becomes party to the contractual provisions of an instrument. Subsequent measurement is at amortised cost.
|
|
Obligations to return digital currency assets
|
Where the Company enters into arrangements with counterparties to borrow digital currency assets, the Company records a corresponding obligation to return the borrowed asset in the same form. This obligation is measured initially at the cost of the digital asset on the day of borrowing and subsequently using the fair value of the asset based on the closing price recorded on a relevant exchange, the corresponding entry is made to the Statement of Profit or Loss and recognised as unrealised fair value gains or losses.
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
5.
Accounting policies (continued)
Certain lending agreements require the Company to supply the lender with collateral against the borrowed amount. This collateral can be in both fiat currency or as digital currency. The Company's parent supplies the assets to be provided as collateral on a short-term basis.
The Company recognises collateral as a short-term receivable based on expected recoverability with the corresponding entry owed to the parent company.
|
|
|
The following is an analysis of the Company's revenue for the period from continuing operations:
|
|
|
|
|
|
10 months ended
31 December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of revenue by country of destination:
|
|
|
|
|
|
10 months ended
31 December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
|
|
|
7.1 Income tax recognised in profit or loss
|
|
|
|
|
|
10 months ended
31 December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax on profits for the period
|
|
|
|
|
|
The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to losses for the period are as follows:
|
|
|
|
|
|
10 months ended
31 December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax using the Company's domestic tax rate of 19%
|
|
|
Non-deductible unrealised loss on digital currency borrowings revaluation
|
|
|
|
|
Changes in tax rates and factors affecting the future tax charges
In the budget in 2020, the Government confirmed that the main rate of UK corporation tax would remain at 19% for the years starting 1 April 2020 and 2021.
On 24 May 2021, Finance Bill 2021 was substantively enacted. The result of this is that the main rate of corporation tax for the UK will increase to 25% from 1 April 2023.
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
|
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
Receivables from related parties
|
|
|
|
|
|
Total trade and other receivables
|
|
|
|
|
|
Included collateral receivable at the year end is an amount of $2,935,608 which relates to collateral provided by the parent company to secure the Company's borrowing. This balance included $1,430,000 of fiat currency receivable in USD and 52 Bitcoin assets valued at the closing rate on 31 December 2020.
|
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
|
|
|
|
Payables to related parties
|
|
|
|
|
|
|
|
|
|
|
|
Included in payables to related parties at the year end is an amount of $2,935,608 which relates to collateral provided by the parent company to secure the Company's borrowing. This balance included $1,430,000 of fiat currency payable in USD and 52 Bitcoin assets valued at the closing rate on 31 December 2020.
|
|
|
|
|
Digital currency borrowings
|
|
|
Total loans and borrowings
|
|
|
The Company is only liable to return digital currency assets borrowed in their form as digital currency assets. At the year end date the Company had borrowed 1,720 Bitcoin assets, 17,000 Ethereum assets and 1,000,001 USDC assets.
|
|
|
|
|
|
Ordinary
shares of £
1.00
each
|
|
|
|
|
|
|
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
12.
Share capital (continued)
|
Ordinary shares of £
1.00
each
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial instruments - fair values and risk management
|
|
|
|
|
|
13.1 Accounting classifications and fair values
|
|
|
The following table shows the carrying amounts and fair values of financial assets and financial liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.2 Financial risk management objectives
|
The Company's objective for managing financial risks is to safeguard the ability to continue as a going concern by ensuring that its parent company has sufficient resources to support its ongoing activities.
|
13.3 Credit risk management
|
The parent company manages its exposure to credit risk in relation to borrowing digital currency assets by obtaining collateral when those assets are subsequently lent to third parties. The directors of the Company continue to ensure that its parent company has sufficient digital currency assets on hand should borrowings be called upon.
|
BITGO PRIME UK LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2020
|
Related party transactions
|
During the period, the Company received lending fees of $1,430,483 from its parent company, BitGo Prime, LLC. The parent company paid borrowing fees to third parties on the Company's behalf totalling $1,290,636.
At the period end an amount of $139,848 was receivable from the parent company.
Included in payables to related parties at the year end is an amount of $2,935,608 which relates to collateral provided by the parent company to secure the Company's borrowing. This balance included $1,430,000 of fiat currency payable in USD and 52 Bitcoin assets valued at the closing rate on 31 December 2020.
BitGo Holdings, Inc. is the parent of the smallest group for which consolidated financial statements are drawn up of which the Company is a member. The registered office of the parent company is 2443 Ash Street, Palo Alto, California, United States, 94304.
|
Events after the reporting date
|
At the period end, the Company had outstanding digital currency asset borrowings as referred to in note 11. Following the period end the price of each coin has fluctuated significantly. The price of the coins has not fallen below original cost of the assets borrowed and therefore there is no impairment to be recorded.
These fluctuations may result in a significant increase in the fair value of the liabilities presented. The Company's financial statements have not been adjusted to reflect this change in the fair value as the Company's obligation is only to return the digital currency assets and not a corresponding fiat currency.
On 5 May 2021, Galaxy Digital Holdings Ltd (“Galaxy Digital”) announced an agreement to buy BitGo Holdings, Inc., and its subsidiaries. Under the terms of the merger agreement, the consideration to BitGo shareholders will consist of 33.8 million newly issued shares of Galaxy Digital common stock and $265 million in cash, subject to certain adjustments and deferred purchase considerations, implying an aggregate transaction value of approximately $1.2 billion based on Galaxy Digital's closing share price on 4 May 2021.
There were no adjusting or other non-adjusting events occuring between the end of the reporting period and the date of approval of these financial statements.
|