Strike creator Jack Mallers to lead new Tether firm with $3,6 billion in bitcoin capital

What’s new? Jack Mallers, the founder of the bitcoin payment app Strike based on the Lightning Network bitcoin protocol, has been appointed CEO of 21 Capital, a joint venture between Tether, broker Cantor Fitzgerald, and SoftBank Holding. Tether owns a controlling stake in the new company, which was created to invest in bitcoin along the lines of Michael Saylor’s Strategy, according to Wednesday’s announcement. 21 Capital will go public with a bitcoin balance sheet of $3,6 billion.

Material by The Block

What else is known? 21 Capital will go public through a SPAC deal with special purpose company Cantor Equity Partners under the ticker CEP. Through its shares, it will offer institutional investors access to the first cryptocurrency without having to hold it directly.

According to the press release, 21 Capital will hold more than 42 000 bitcoins at launch, which is the third largest stock among public companies after Strategy and miner Marathon Digital. That said, many private companies and governments hold far more bitcoins, according to Bitcoin Treasuries.

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The majority stake in the new company will be held by Tether and crypto exchange Bitfinex, which is owned by parent company iFinex, while SoftBank will become a minority shareholder.

Tether has long-standing ties to broker Cantor, founded by US Treasury Secretary Howard Lutnick and headed by his son Brandon. Reuters previously reported that Cantor, which owns 5% of Tether, holds nearly all of the stablecoin issuer’s US Treasury bills.

Tether will contribute $1,5 billion in bitcoins to the new firm, SoftBank will add $900 million, and Bitfinex will add $600 million. These bitcoin investments will eventually be converted into equity at a valuation of $10 per share. The company intends to raise an additional $585 million through a $350 million convertible bond sale and a $200 million private placement.

21 Capital will strategically allocate capital to increase the number of Bitcoins per share, as well as support Bitcoin-based financial products.