Tether's XXI Capital abandons three-way crypto merger
Jack Mallers is stepping down as CEO of Tether-backed XXI Capital, scrapping a planned three-way merger and leaving the firm to pursue a narrower, lending-focused acquisition strategy.
Jack Mallers stepped down as CEO of Twenty One Capital (XXI) on July 20, effectively scrapping a planned consolidation of three major bitcoin companies. The Tether-controlled firm has abandoned its proposed three-way merger with Mallers' payments company, Strike, and mining outfit Elektron Energy.
Raphael Zagury will assume the role of CEO, replacing Mallers as XXI recalibrates its corporate strategy. Strike will remain a standalone company, with Mallers returning to focus entirely on the bitcoin financial services firm he founded. Tether, XXI's controlling shareholder, confirmed the leadership transition and the collapse of the broader merger in a separate announcement.
When Tether first proposed the combination in April, the goal was to place bitcoin treasury operations, financial services, and mining infrastructure under the umbrella of a single listed company. The dissolution of that plan means investors will no longer get exposure to the Strike payments network through a XXI equity position. For market participants, the unraveling highlights the difficulties of executing complex, multi-headed crypto mergers that attempt to span vastly different operational verticals.
XXI is now pivoting to a narrower two-way combination that would pair it exclusively with Elektron Energy. Under this revised strategy, the company intends to focus its capital on acquiring operating businesses rather than pursuing broad horizontal integration. It also plans to expand its capital markets capabilities and develop a bitcoin-backed lending business.
The strategic pivot toward lending and capital markets represents a more targeted operational focus compared to the initial conglomerate pitch. For Tether, retaining a listing vehicle oriented around treasury management and credit still provides a public market avenue for specific bitcoin financialization, just without the consumer payments layer.
The market reaction to the scaled-back ambitions was notably muted. XXI shares were little changed in pre-market trading, indicating that investors had largely discounted the likelihood of the original three-way deal reaching completion. The immediate priority for Zagury will now be demonstrating that a standalone lending and capital markets strategy can deliver value to shareholders.
