The planned three-way merger of Twenty One Capital, Strike, and Elektron Energy collapsed, triggering rapid management developments, executive resignations, and a broader redistribution of power.
As reported by Bloomberg, Twenty One Capital, Strike, and Elektron Energy no longer plan to merge. Jack Mallers, chief executive officer of Twenty One Capital and Strike, as well as a prominent figure in cryptocurrency circles, resigned from his position at Twenty One Capital, while Elektron chief executive officer Raphael Zagury assumes that position.
Strike intends to remain an independent company, according to an announcement. There are no longer plans to integrate it with Twenty One Capital, although talks between Twenty One and Elektron continue. Tether holds majority stakes in the latter two.
The initial idea, proposed by Tether in April, was to assemble three different cryptocurrency businesses: the digital asset treasury (DAT) of Twenty One Capital, the cryptocurrency trading platform of Strike, and the Bitcoin mining of Elektron. Tether is the world's largest stablecoin issuer, with a broad range of investments.
DATs have fallen into a difficult position as the price of Bitcoin has declined, leading to financial losses and job cuts at major cryptocurrency companies. Few companies possess Bitcoin accumulation, customer trading, and cryptocurrency mining under the same roof, and it is not entirely clear why the deal proposed by Tether collapsed.
Zagury stated to Bloomberg that his companies are still searching for a path.
"The structure evolved as Jack decided to focus entirely on Strike and I stepped up to lead Twenty One," stated Zagury. "Strike continues to develop independently, and Twenty One is focused on building the operational, governance, and capital markets foundations for its next phase." He mentioned that he wants Twenty One Capital to focus not only on buying Bitcoin, but also on generating cash flows and how it allocates its capital.
"Jack played a fundamental role in creating XXI. He believed in Bitcoin and turned it into a public company, and we are grateful for that," stated Paolo Ardoino, chief executive officer of Tether. "Now that we are starting the next chapter, Rapha is one of the best managers in this industry, with a track record of building businesses with strong cash flows and disciplined execution. He brings exactly the operational standards that XXI needs as it enters its next phase of growth."
It is noted that Twenty One Capital launched in December through a special purpose acquisition company (SPAC), backed by Tether, as well as Japanese investment group SoftBank Group Corp. and investment bank Cantor Fitzgerald LP. It held more than 40,000 Bitcoin, the third largest corporate holding at that time.
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