Tether, SoftBank, and Mallers Launch ‘Twenty One’ Bitcoin Company

  • Cantor Fitzgerald Chairman Brandon Lutnick announced a new Bitcoin acquisition company called Twenty One (XXI), backed by Tether and SoftBank with Jack Mallers as CEO.
  • The new venture aims to directly compete with MicroStrategy by acquiring over 42,000 BTC through $585 million in funding.
  • Tether/Bitfinex will maintain 71% voting control of the company, while CEP shareholders might only receive about 2.7% ownership of the Bitcoin holdings.

Brandon Lutnick, who took over Cantor Fitzgerald when his father Howard became U.S. Commerce Secretary in the Trump administration, has announced a major new Bitcoin venture. Revealed this week, Twenty One (NASDAQ: XXI) will be led by Tether and aims to acquire over 42,000 Bitcoin (BTC), establishing itself as a direct competitor to MicroStrategy.

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The new company represents a collaboration between Tether, SoftBank, and Jack Mallers, founder of Strike, who will serve as CEO. According to business wire reports, Twenty One will raise $585 million through $385 million in convertible senior secured notes and an additional $200 million in PIPE financing. The Roman numeral XXI symbolizes Bitcoin’s 21 million supply limit.

Tether’s Controlling Stake

The partnership is particularly significant given Cantor Fitzgerald’s existing relationship with Tether, as the firm manages many of the bonds backing the USDT stablecoin. Twenty One is structured as a special purpose acquisition company (SPAC) business combination that requires SEC and shareholder approval before completion.

While the boards of directors for both Twenty One and Cantor Equity Partners (CEP) have unanimously approved the combination, the ownership structure heavily favors Tether. According to SEC filings, Tether/Bitfinex will maintain approximately 71% voting power in the new venture, with SoftBank being the only other entity with voting rights.

CEP’s Market Performance and Ownership Structure

CEP shareholders may receive only about 2.7% ownership of the Bitcoin holdings based on pro forma ownership tables in SEC disclosures. Despite this relatively small stake, CEP’s stock has seen extraordinary price movement since the announcement, closing at $16.50 on announcement day before surging to $39.29 in subsequent trading.

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This performance has raised questions about valuation, as CEP’s market capitalization of approximately $290 million (at $28 per share) substantially exceeds the $106 million value of its projected Bitcoin holdings at current prices.

The Twenty One venture comes with complex financial arrangements that critics have suggested run counter to Bitcoin’s fundamental principles. One observer noted on Twitter that these arrangements would make Satoshi Nakamoto "roll in his grave," highlighting the tension between Bitcoin’s decentralized ethos and the highly structured corporate control being implemented by Tether and its partners.

Twitter user Liam J. Kelly commented on the venture’s structure, highlighting concerns about how the arrangement conflicts with Bitcoin’s original ethos.

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