The bitcoin treasury company controlled by Tether risks a “Below Compliance” flag from the New York Stock Exchange by Friday, June 6.
Twenty One Capital, the bitcoin treasury company controlled by Tether and with Jack Mallers as its public face, has until Friday, June 6 to remedy a violation of NYSE rules regarding the composition of its independent audit committee. If it fails to do so, the XXI stock will receive a BC – Below Compliance – indicator visible on all market profiles, data, and news pages starting June 9, with further disciplinary measures to follow.
The root of the problem traces back to the May 19 transaction: on that date, Tether acquired SoftBank’s entire position in Twenty One, consisting of 89,106,748 Class A shares, simultaneously canceling the corresponding Class B shares. The transaction also terminated a governance agreement that had granted SoftBank veto rights over the composition of the board of directors and other significant corporate decisions. The two directors appointed by SoftBank, Jared Roscoe and Vikas Parekh, resigned on the same day.
The critical point is that Roscoe was a member of the audit committee. His departure reduced the independent members of that committee to just one, whereas the NYSE requires at least two during the post-listing transition period. On May 29, the New York Stock Exchange formally sent Twenty One a non-compliance notification. The company stated it expects to appoint an additional independent audit committee member “promptly”, without specifying, however, who holds the authority to select a sufficiently independent director.
Meanwhile, the company’s financial backdrop is far from favorable. Twenty One holds 43,514 BTC, an asset worth approximately 3.1 billion dollars, yet the entire company’s market capitalization stands below 2.5 billion dollars. The stock has lost more than 83% of its value over the past twelve months, against a backdrop marked by uncertainty over internal leadership, the arrival of Raphael Zagury — a figure close to Tether — who has taken on many of the responsibilities previously held by Mallers, and the failure to launch the promised commercial operations.
