Jack Mallers is no longer CEO of Twenty One (XXI), a company that manages Bitcoin holdings with support from Tether. He left his position a few months after publicly questioning Michael Saylor about the calculations behind mNAV and the returns on digital credits.
According to the founder of Strike, he left the company because he disagreed with the board about its future plans. Some observers believe his departure is connected to concerns he voiced publicly a few months ago.
Board Disagreements End Jack Mallers’ Twenty One Tenure
Mallers revealed the news this week. XXI launched on December 9th, 2025, meaning Mallers served as CEO for only seven months. The company initially held around 43,500 Bitcoin, valued at approximately $4 billion when it went public. It was supported by Tether, Bitfinex, and SoftBank.
Tether took full control in May 2026 by buying SoftBank’s entire stake.
I’m leaving my position as CEO of Twenty One. It was a difficult choice, but I believe it’s the best path forward – this experience has helped me understand my priorities and what I want to focus on. Ultimately, my passion remains Bitcoin, and I’m continuing that work at my company, Strike. The journey isn’t over; I’m still dedicated to building in this space.
— Jack Mallers (@jackmallers) July 21, 2026
In later posts, he explained his departure further. He stated that he left because he and the company’s board had differing visions for its future.
He also refuted reports from X’s Grok chatbot stating he earned $140.8 million in compensation, adding that stock options he gave up are now valueless.
So, XXI, one of the biggest corporate holders of Bitcoin, has completely exited its position, and now Tether owns everything. It’s a big shift, and the new CEO, Raphael Zagury, is signaling they’re moving away from just accumulating Bitcoin. He’s focused on generating actual cash flow for the company instead, which is a pretty different approach. As an investor, it makes me think they might be re-evaluating their entire strategy.
The Saylor Questions That Resurfaced After His Exit
Knowing the history makes Saylor’s recent departure especially painful. Back at the BTC Prague conference earlier this year, Mallers questioned Saylor about mNAV – a measurement of how much value the market assigns to each dollar of Bitcoin held by a company.
He was worried about a common practice: some companies include certain investments as if they were actual stock, even though those investments haven’t yet become shares. This makes their financial figures look better than they are. He shared in an interview that this led to the question he asked Michael Saylor.
Mallers questioned whether categorizing securities currently considered worthless as equity would artificially increase a company’s equity value and consequently improve its Modified Net Asset Value (MNAV) calculation.
In my research, I looked at XXI’s convertible bond as a case study. This bond essentially allows holders to exchange it for stock at a price of $13 per share. However, when I examined the market, the stock was actually trading around $5, meaning that conversion wasn’t even remotely profitable at that time.
I was listening to a panel discussion today, and one of the speakers, Mallers, really went after these new digital credit products. He was pointing out that they offer investors a really high, continuous annual return – basically, a never-ending dividend. It sounds too good to be true, and he seemed to think so too.
Stretch, a product from Strategy, initially charged a fee of 11.5% when Mallers raised concerns. Documents filed with the Securities and Exchange Commission reveal this rate increased to 12% in July. Mallers simply asked: who covers this cost when there isn’t actual income?
He questioned where the money would come from, pointing out that without earning income, it’s impossible to support someone like a grandmother. He asked, “If you aren’t generating any cash flow, how can you afford to give her money?”
Saylor gave a detailed response back then. He explained that mNAV was just one of many figures to consider and also supported the calculations used in the model.
Those videos are circulating widely again, and many people are interpreting them as evidence that Mallers had concerns about the fundamental calculations behind the industry well before he departed.
Rug Pull Claims Meet a Firm Denial
The market reacted swiftly to XXI’s performance. The stock closed at around $4.60 on Tuesday, a significant 13.5% drop in a single day. Investors who initially purchased shares at $10 have now lost over half of their investment.
People on X (formerly Twitter) are reporting significant losses on the stock – as high as 85% from its highest value. Some have also criticized Mallers for allegedly prioritizing other interests over those who invested in the company.
He pushed back hard.
Responding to claims of a ‘rug pull,’ Mallers stated he voluntarily resigned from his position, receiving no severance pay and giving up any stock options. He emphasized that this decision was made out of principle, and also clarified that Twenty One never used an automated teller machine (ATM) to sell shares during his time as CEO.
People had different reactions to the news. Some, like investor Mike Alfred, saw it as a positive step towards clear communication and shared goals. Others, including Simon Dixon of BnkToTheFuture, believed it meant Mallers was completely distancing himself from wrapped securities.
Another group believes the digital asset treasury space should be cautious. They say things look good now with increasing profits, but the true challenge will come when net asset value decreases and funding becomes scarce.
Jack Mallers leaving Twenty One should serve as a warning about the dangers of focusing on Designated Market Makers (DMMs). DMMs appear attractive when the market is booming and investment money is flowing freely. However, their true value is tested when market optimism fades. The question is: can they still deliver results when times get tough?
— Moonchaser ☀️🪝 (@Moonchaser2020) July 21, 2026
The current standings might change soon. Metaplanet now holds almost as much Bitcoin as XXI – over 43,000 each – which means they’re close to competing for second place.
As a researcher following the cryptocurrency space, I’ve observed that Bitcoin is currently trading around $66,600 – its highest point in five weeks. Interestingly, Jack Mallers seems to be refocusing all his energy on Strike, his payment platform. His priority isn’t raising capital through selling shares; instead, he aims to use actual cash flow from the platform itself to purchase more Bitcoin.
It remains to be seen if his concerns will ultimately be valid, as the future of XXI depends on how it performs under Tether’s new leadership. If the company succeeds despite his previous criticisms, those concerns may be forgotten as the initial issues that sparked them are resolved.
2026-07-21 21:58