Bitmine Says Its Controls Are Still Not Effective as ETH Ended the Year $5.4 Billion Below Cost

Bitmine Immersion Technologies (BMNR), the ether treasury company chaired by Tom Lee, told investors its internal controls over financial reporting were still not effective at the close of its fiscal year. It is the second annual report in a row to reach that conclusion.

Bitmine filed the annual report (Form 10-K) with the SEC on Nov. 10, covering the 12 months through Aug. 31, 2026. It shows the company’s 5,901,837 ETH carried a fair value of $14.56 billion at year-end against a cost basis of $19.95 billion, roughly $5.4 billion below the cost.

The company is also nearing its stated goal of holding 5% of ETH supply. Zero Knowledge Group founder Austin Campbell said on Unchained’s Bits + Bips in October that “Tom Lee said he won’t hold more than 5% of ETH supply. Currently he holds about 4.9%.” The 10-K puts the Aug. 31 stake at about 4.9% of circulating supply, and a Nov. 9 holdings update put it at 6,070,092 ETH, or 4.97%.

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Management first reported material weaknesses as of Aug. 31, 2025, spanning all five components of the internal-control framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). During fiscal 2026, Bitmine said it brought in outside advisors, installed an enterprise resource planning (ERP) system and added accounting staff. Many of the new controls, however, had not operated long enough to show they work, and the filing states that “management concluded that material weaknesses continued to exist as of August 31, 2026.” Bitmine also replaced its auditor, Bush & Associates, with KPMG in April.

For the year, Bitmine reported a net loss of $6.31 billion, against net income of $348.6 million a year earlier, mostly from unrealized markdowns on its digital assets. Revenue rose to $124.8 million from $6.1 million, with staking and validation making up about 97%. The company also booked a $143.7 million net loss on ETH-referenced derivative contracts and had none open at year-end.

After the fiscal year closed, Bitmine ended its management services agreement with Ethereum Tower LLC, effective Sept. 3, without paying a termination fee. A day later, MAVAN, Bitmine’s Ethereum staking platform, signed a 10-year advisory deal with American Validator LLC, an Ethereum Tower affiliate, for 1.5% of staking rewards on Bitmine’s staked ETH. The company described the new fee as a simpler, lower arrangement.

Bitmine is also moving its fiscal year-end to Dec. 31 and expects to file a transition report covering Sept. 1 through Dec. 31, 2026.

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