Cantor to work with SoftBank, Tether in $3.6bn crypto venture

London — Cantor Fitzgerald is launching a crypto venture with Tether and Japanese technology investor SoftBank Group to buy bitcoin, underscoring rising institutional adoption of the once-nascent asset class.

The deal, announced on Wednesday, with blank cheque vehicle Cantor Equity Partners values the venture, Twenty One Capital, at $3.6bn.

It will deepen ties between the Wall Street brokerage — chaired by Brandon Lutnick, the son of the former Cantor boss and US commerce secretary — and Tether, the company behind the world's largest stablecoin.

Twenty One will offer investors access to an investment vehicle for exposure to the world’s largest cryptocurrency and expects to launch with more than 42,000 bitcoin.

That would make Twenty One the third-largest bitcoin treasury in the world, it said.

The venture may seek to replicate the success of bitcoin acquirer Strategy, which saw its market value soar late last year as crypto prices jumped after US President Donald Trump's election victory. Trump has promised to support the crypto industry by easing regulations for digital assets.

“We're not here to beat the market, we're here to build a new one. A public stock, built by Bitcoiners, for Bitcoiners,” said Twenty One Co-Founder and CEO Jack Mallers.

Michael Saylor’s Strategy is the biggest corporate holder of bitcoin and held 538,200 units of the digital asset on April 20.

Twenty One will be majority owned by Tether and cryptocurrency exchange Bitfinex. SoftBank will have a minority ownership.

Tether and Cantor have long-standing ties from when Howard Lutnick was the brokerage’s boss.

Cantor holds much of the dollar-denominated reserves Tether said it has for every token it creates for its stablecoin.

Of the US Treasury bills Tether holds, 99% are held with Cantor, Tether CEO Paolo Ardoino said last month.

“Bitcoin is one of the only truly decentralised, immutable and censorship-resistant asset and its role as the foundation of a new financial system is inevitable,” Ardoino said.

The companies will raise $585m in additional capital from investors through a combination of convertible bonds and equity financing.

Twenty One will seek to trade on the Nasdaq under the symbol “XXI” after the deal closes. Reuters