Jack Mallers, the founder and chief executive of Strike, a Bitcoin payments and lending company, is stepping down from Twenty One Capital, a publicly traded Bitcoin holder controlled by Tether, after the companies abandoned plans to combine Strike with Twenty One and Elektron Energy, a Bitcoin mining business, Bloomberg reports.
But calling it a failed deal may be overly generous.
Twenty One told investors in May that there were "no binding commitments or agreements" involving either company, the transaction structure hadn't been agreed and its board hadn't evaluated or approved the acquisitions.
- The filing also warned that the proposal involved potential conflicts because Mallers ran Strike, while Raphael Zagury, a Twenty One director, led the company managing Elektron.
In effect, what collapsed was a publicly announced idea rather than a signed merger.
Tether, the issuer of the world's largest stablecoin, proposed the combination in April as a way to put Twenty One's Bitcoin treasury, Strike's financial services and Elektron's mining operations under one roof.
Mallers later publicly promoted the plan, while Twenty One shares jumped in after-hours trading.
Strike will now remain independent, while Zagury is replacing Mallers as Twenty One's chief executive. Discussions about a possible combination with Elektron are reportedly continuing, though they remain preliminary.
That leaves Tether with more control over what remains.
- In May, Tether bought SoftBank Group's entire stake of more than 89.1 million Twenty One shares.
- SoftBank's representatives then left the board, its voting shares were canceled and a governance agreement dividing influence among the company's original backers was terminated.
- Only 215.7 million voting shares remained afterward, all held by Tether and Bitfinex, a crypto exchange affiliated with the stablecoin issuer.
- Ordinary investors hold Class A shares, which generally carry no voting rights while the special Class B shares remain outstanding.
Zagury was also previously grouped in a regulatory filing with directors belonging to the "Tether Affiliate Group," although he separately qualified as an independent director under stock-exchange rules.
His appointment signals another attempt to turn Twenty One from a large pile of Bitcoin into an actual operating company. Zagury said it should now be judged by the cash flow it generates and how carefully it allocates capital, rather than simply by how much Bitcoin it accumulates.