This crypto firm lost $13M operating, but paper gains on its own token cleared a path to major payout bonuses

The9’s second-quarter profit was driven by accounting for its 9BIT token holdings rather than its operating businesses, with one fair-value gain alone exceeding the company’s bottom line.The Nasdaq-listed company reported $32.4 million of net income for the quarter ended June 30, up from $22.6 million in the first quarter. Yet The9 recorded only $712,000 of revenue, zero cryptocurrency-mining revenue and a $13.4 million loss from operations.Token income outweighed operationsBelow the operating line, The9 recognized a $47.2 million fair-value gain on 9BIT tokens and an additional $11.1 million cryptocurrency reward. Together, those two items totaled $58.3 million, more than the quarter’s net income.The comparison with the first quarter sharpens that divide. The9’s 9BIT reward and fair-value income rose from $37.6 million in the first quarter to $58.3 million in the second. Its operating loss narrowed by less than $1 million.The9’s first-quarter filing reported $22.6 million of net income. The company described the second-quarter increase using rounded figures as more than 39%, while the exact statement values imply a larger percentage gain.The accounting treatment separates the toke...