FG Nexus (FGNX) shares surge 8% after completing Ethereum treasury liquidation

Highlights Overview

The company liquidates its cryptocurrency portfolio and confirms a huge loss.

Cryptocurrency clearing generated more than US$75 million in cash.

The strategic focus shifts to investment in artificial residential real estate.

FG Nexus (FGNX) liquidates its cryptocurrency portfolio amid huge losses

FG Nexus (FGNX) completely liquidates all cryptocurrency assets before the quarter ended on June 30, thereby completely abandoning its digital asset reserve strategy. The strategic shift comes as the company confirmed a loss of $45.207 million in the first half of 2026 due to the closure of its digital assets division. The company's shares closed at $7.59 on Wednesday, up 8.43% from the previous trading day.

Cryptocurrency liquidation brings in more than $75 million in cash

The Nasdaq-listed company disclosed its final cryptocurrency liquidation in its quarterly earnings report filed on August 12. FG Nexus has reclassified its previous digital asset operations as terminated operations. As of the end of the June quarter, there were no cryptocurrency positions on the company's balance sheet.

Financial statements show that losses related to Ethereum digital assets amounted to US$41.167 million. In addition, an impairment loss of $2.793 million was charged against the remaining digital intangible assets. Administrative and operating expenses related to terminated operations added another $1.789 million to total costs.

Certain offsetting factors mitigated the overall impact of the terminated department throughout the reporting period to some extent. The company recognized US$398,000 in digital intangible asset trading gains and earned US$144,000 in revenue through pledge activities. As a result, the total loss of $45.207 million covers all terminated digital asset operations, not just the gains from Ethereum liquidation.

Strategic focus shifts to artificial residential real estate investment

FG Nexus raised US$60.956 million in cash through the sale of Ethereum tokens over a six-month period. In addition, as of the end of the June quarter, there was US$14.983 million in digital asset disposal payments that had not been recovered as receivables. Management successfully recovered the balance in July.

These numbers reflect total cash inflows from asset liquidations rather than net gains from transactions. Consolidated results showed a net loss of $56.928 million for all businesses in the first half. As a result, the terminated cryptocurrency business has contributed significantly to the company's overall losses.

Management will begin to establish an Ethereum reserve strategy in the second half of 2025. As of the end of September, the company disclosed holding 50,770 ETH tokens, valued at approximately US$207 million at the time. The average cost of all purchases is approximately $3860 per piece.

The company initially received US$200 million in funding and made Ethereum its core reserve asset. Management had expected additional revenue through pledge agreements and related blockchain opportunities. However, the company has begun to systematically reduce its exposure to cryptocurrencies before implementing a complete liquidation.

On July 1, authorization was obtained from the board of directors to allow management to reallocate resources from digital assets to real estate investments. FG Nexus plans to focus on investing in land-leasehold artificial residential communities through its newly established operating subsidiary. This shift in direction marks a fundamental departure from the previous reserve framework with cryptocurrencies at its core.

Meanwhile, discussions about a potential merger with FG Communities are still ongoing. However, negotiations are still in their preliminary stages and no binding transaction agreement has yet been signed. An independent special committee, supported by external financial advisers, oversees the proposed merger.

Following the reorganization of reserves, Ethereum's full liquidation has significantly enhanced the company's available liquidity. At the end of the second quarter, total cash and equivalents were US$24.9 million. Available cash resources had expanded to approximately $51.4 million at the end of July following receipt of outstanding sales payments. [TAG FGNX shares closed Wednesday at $7.59, up 8.43 percent for the day. Management previously disclosed its intention to exit cryptocurrency positions on July 1. As a result, the recent share price gains cannot be attributed solely to quarterly reports filed in August.