Social media network Reddit has sold the majority of its cryptocurrency holdings in the third quarter of 2024, according to a recent filing with the Securities and Exchange Commission (SEC).
The majority of the sales originated from treasury holdings in Bitcoin (BTC) and Ether (ETH). The 10-Q SEC filing reveals that the net value of the crypto assets and the gains recognized from the sale were deemed insignificant for the period:
“During the three months ended September 30, 2024, we sold the majority of our cryptocurrency portfolio, which consisted primarily of Bitcoin and Ether. The net carrying value of our cryptocurrencies, as well as the gain recognized on sale, was immaterial for the periods presented.”
According to the document, proceeds from the sale of cryptocurrencies were valued at $6.869 million for the three months ending on Sept. 30.
The company previously invested some of its excess cash reserves in Bitcoin and Ether. It also continued to acquire ETH and Polygon’s token MATIC (MATIC) — now known as POL — as a “form of payment for sales of certain virtual goods.”
Reddit's consolidated statements of cash flows in thousands. Source: SEC
Related: Telegram users report massive outages on messenger app
Reddit said its sales of ETH and MATIC “was not material for the year ended December 31, 2023 or the nine months ended September 30, 2024.” The social media company also held digital assets for use by its product and engineering teams limited to specific uses.
Reddit has been using its excess cash to add small amounts of cryptocurrencies to its treasuries since 2022. In a previous filing for its initial public offering (IPO), the company praised crypto and blockchain as having “significant potential.”
According to Reddit’s policies, investments in digital assets for treasury purposes are limited to BTC, ETH, and any other cryptocurrency that United States regulators had identified as “likely not being a security” through public statements or guidance.
Crypto advertising slumps
The filing has also revealed Reddit has seen a decline in advertising demand since the pandemic, citing global economic concerns, rising interest rates and uncertainty in geopolitical conditions:
“Since the three months ended December 31, 2022, we experienced declines in advertising spending in certain macro-challenged sectors, particularly technology, media and entertainment, and cryptocurrency.”
According to the company, the decline in advertisements from these sectors has been partially offset by diversification across “other advertising verticals.”
Magazine: Did Telegram’s Pavel Durov commit a crime? Crypto lawyers weigh in