Empery sells 1,635 BTC, shrinking treasury reserves 76% in weeks

Empery Digital sold 1,635 BTC for $102.2 million from July 1 to Aug. 6, cutting its Bitcoin treasury to 1,279 BTC, per its quarterly SEC filing.

The filing shows 954 BTC remains pledged as collateral against $35 million of debt, leaving just 325 BTC unrestricted — down from 1,375 at June 30.

The post-quarter sales follow 1,167 BTC sold for $80.1 million during the first half, when Empery spent $54 million on share repurchases, repaid $50 million on its Repo Facility and made a $10 million repayment under its master loan arrangement. The company said both equity and Bitcoin-sale proceeds supported the Repo Facility repayment but did not allocate the amounts or trace one pool of sale proceeds to every use.

The sell-down exposes the fragility of the "never sell" treasury model as leveraged Bitcoin holders face collateral pressure. Empery's amended loan terms set a 174% collateral target, with margin calls triggered below 153% and liquidation below 143% if not cured within 12 hours.

Collateral calls and the 12-hour liquidation window

Empery transferred 576 BTC to its lender on Feb. 4 and another 186 BTC on June 3 after collateral calls. The filing did not report an executed lender liquidation, so the disclosed transfers were collateral top-ups rather than forced sales.

The company eased pressure after June 30 by repaying $20 million. Its lender returned 585 BTC, reducing pledged collateral from 1,539 BTC to 954 BTC as debt fell from $55 million to $35 million.

Data-center commitment adds another $62.1 million claim

A proposed data-center property acquisition could put another $62.1 million claim on Empery's cash. The company has already contributed $2.9 million to EMHU, a separate property venture managed by TexStack. The additional commitment applies only if the acquisition closes.

TexStack controls the closing process and can make mandatory pro-rata capital calls backed by Empery's guarantee. The property commitment is distinct from Empery's closed $20 million investment in Cardinal Data Power, which gave Empery an approximately 8% stake.

At June 30, Empery reported $3.7 million of cash, including restricted cash, and a $5.7 million working-capital deficit. Management said a mix of cash, operations, derivatives proceeds, borrowing and potential Bitcoin sales should cover planned operations, debt and the conditional property contribution for more than one year. Management listed Bitcoin sales as one of several funding sources, not a certainty.

The sell-down comes as the broader Bitcoin treasury trade faces stress. Bitcoin was up 0.31% over the past 24 hours with the total crypto market valued at $2.22 trillion and $35.35 billion in 24-hour volume. Bitcoin dominance sits at 58.92%. The institutional bear market is unfolding through ETF redemptions and treasury-company sales, with other US treasury firms also facing debt pressure. Further collateral pressure or a closing of the property acquisition would still leave Empery managing a liquid BTC cushion that had fallen to a derived 325 BTC by Aug. 6.

This article is for informational purposes only and does not constitute investment advice.