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Brandon Lutnick, son of U.S. Secretary of Commerce Howard Lutnick, has partnered with SoftBank, Tether and Bitfinex to take advantage of the cryptocurrency revival under US President Donald Trump.
The consortium is creating a multi-billion-dollar Bitcoin acquisition vehicle that absorbs billions of dollars of cryptocurrency from other partners and uses the funds to replicate the success of microstrategy.
The vehicle is an attempt by Brandon Lutnick, who was appointed chairman of securities firm Cantor Fitzgerald when his father resigned to become Trump’s top trade envoy and stayed at the centre of the crypto investment boom.
The micro-tactics have become a public market feeling after they began issuing stocks and speculative debts to buy large stocks of Bitcoin. He has grown into an industry giant with tens of billions of dollars in Bitcoin and earned a public market capitalization of $91 billion.
A special purpose acquisition company, Lutnick’s Vehicle, is looking to create publicly available alternatives along with some of Crypto’s largest and most controversial traders.
The vehicle, called Cantor Equity Partners, will raise $200 million in January and use cash to create a new company called 21 Capital. People say they receive $3 billion in Bitcoin from other cryptocurrency investors and trading companies.
People added that Tether will donate $1.5 billion in Bitcoin, while SoftBank and Bitfinex will donate $900 million and $600 million in digital currencies respectively. Tether and Bitfinex are owned by the same parent company and share some of the same leadership.
Lutnick’s vehicles will also raise $350 million convertible bonds and separate private arrangements of equity to buy additional Bitcoin. Ultimately, SoftBank, Tether, and Bitfinex will convert Bitcoin investments into stocks at $10 per share at 21 capital, and value the digital currency at $85,000 per coin.
The deal is likely to be announced in the coming weeks, but it still fails to materialize, warning that numbers could change.
In 2021, Tether and Bitfinex resolved a massive regulatory investigation with the New York State Attorney General and the Commodity Futures Trading Commission.
The Trump administration has promised a more regulating attitude towards cryptocurrency trading.
Cantor Fitzgerald is already a beneficiary and advises on a $775 million investment in Tether’s video sharing company Rumble.
Bitcoin prices peaked at around $106,000 the month after winning the Trump election in November, and were taken over the next few months, but remained close to an all-time high at $92,000 per coin. MicroStrategy fell fifth from the record high that reached in November.
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The Crypto partnership is the first of a potential wave of SPAC trading led by Cantor Fitzgerald. In addition to the Cantor Equity Partners SPAC, they created two other vehicles led by young Lutnick, who is seeking a deal.
The brokerage also undertakes several SPACS in the last few months issued by third parties.
Cantor and Softbank declined to comment. Tether and Bitfinex did not respond immediately to requests for comment.
