Wall Street Journal : Derrière l'investissement de 1,5 milliard de dollars de Tethers, les intermédiaires ont fait fortune

Original article by Ben Foldy and Caitlin Ostroff, The Wall Street Journal

Original translation: Luffy, Forest News

Tether, the issuer behind the world’s most popular cryptocurrency USDT, is on a buying spree. It has acquired majority stakes in Northern Data, an artificial intelligence company, and Blackrock Neurotech, a brain-computer chip company. Notably, both deals were brokered by the same German investor, who has had mixed results with deals.

The stablecoin USDT currently has a circulating market value of over $115 billion. Thanks to the considerable interest rates, Tether can earn about $4 billion in revenue each year from the U.S. Treasury bonds that support USDT.

Tether hired tech investor and entrepreneur Christian Angermayer to help invest the vast sum. The versatile financier has also made his fortune through some unconventional investments, including psychedelic drugs, dinosaur fossils and alternatives to the performance-enhancing drugs athletes take during the Olympics.

So far, Angermayer has helped Tether invest about $1.5 billion in two companies in which he holds a stake, and he has earned handsome commissions from the transactions. The companies they invested in have faced perennial losses.

In the past year, Tether acquired a majority stake in Northern Data, a loss-making German data center operator with ambitions to become an artificial intelligence company. Another company Tether acquired was Blackrock Neurotech, a troubled brain-computer implant company based in Utah that competes with Elon Musk’s Neuralink.

Tether did not respond to our request for comment. A Northern Data spokesperson said the company’s revenue growth proves that its strategic investments in artificial intelligence are successful.

Tether is not the first cryptocurrency company to make a big investment. Previously, at its peak, cryptocurrency exchange FTX spent $1 billion to acquire a Bitcoin mining company on the steppes of Kazakhstan and spent $500 million to acquire artificial intelligence company Anthropic.

In October last year, cryptocurrencies generally rose. A cryptocurrency offline trading store in Hong Kong showed the exchange rate of USDT.

Angermayers history is controversial

Angermayers family office, the Malta-based Apeiron Investment Group, is a business line that connects investors and companies. Apeiron has a history of arranging large investments for cash-rich buyers that ultimately underperformed.

In 2017, Angermayer’s family office helped China’s HNA Group become the largest shareholder in troubled German lender Deutsche Bank. After the deal, the bank’s shares fell further. A few years later, HNA sold some of its shares as it ran out of cash. Ultimately, HNA, heavily indebted and under scrutiny from the Chinese government, filed for bankruptcy.

HNA Group, headquartered in Haikou, China, filed for bankruptcy in 2021

Angermayer then began working with SoftBank Group, a Japanese conglomerate that raised the world’s largest venture capital fund to date, and introduced Wirecard, a German payments processor that was facing allegations of accounting fraud.

SoftBank helped stabilize Wirecard by issuing $1 billion in convertible bonds. Both SoftBank and Wirecard paid millions of dollars in finder fees to Angermayers family office.

A few months after receiving the SoftBank investment, Wirecard signed a long-term cooperation agreement with cybersecurity company Cyan AG, in which Angermayer and a business partner held a 27% stake. The business partner also served as HNAs representative on the board of Deutsche Bank. In this cooperation, Angermayer was responsible for introducing executives from Cyan and Wirecard to each other.

A year after the deal with SoftBank was struck, Wirecard collapsed in an accounting scandal, and SoftBank sold the bonds to investors, who suffered heavy losses.

Apeiron was paid to facilitate the deal but was not involved in the negotiations or the transaction itself, said a person familiar with the matter. Angermayer also brokered several other less controversial deals, the person said.

More recently, Angermayer and Apeiron have focused on what he calls “the next big agenda for human society,” building a portfolio of investments in areas such as cryptocurrency, longevity, and psychedelics. With the backing of tech investor Peter Thiel, Angermayer co-founded Enhanced Games, which calls for sports events to adopt performance-enhancing drugs.

Angermayer and Northern Data

Angermayer often wears garish shirts emblazoned with mushrooms. He has a tattoo of the chemical symbol for psilocybin, a neurotoxin with psychedelic effects, on his forearm. He has hosted lavish birthday parties at a 17th-century Austrian palace and at a crypto conference in the Bahamas. On Instagram, Angermayer shows off his collection of fossilized dinosaur bones and ancient sculptures.

Angermayer’s personal life and work sometimes intertwined. In 2022, Apeiron pitched investors a new fund, called Apeiron Jurassic Fund One, that aimed to raise $30 million to invest in dinosaur fossils. Draft promotional materials said the fund would tap “a unique global network of bounty hunters” starting with Angermayer’s fossil collection, which included a juvenile Tyrannosaurus rex and a Diplodocus. The fund was eventually abandoned.

Angermayer’s other investments include a large stake in Northern Data, a German-listed bitcoin miner that recently pivoted to AI cloud hosting services. Northern Data acquired two cryptocurrency mining companies in which Angermayer held a stake, and Angermayer received a stake in the new companies. One of them was co-founded by a former employee of his family office.

After that, Angermayer began raising money for Northern Data and charging fees for his services. Apeiron also charged Northern Data fees for introducing investors. The fees included sponsorship and promotion at a crypto rave in the Bahamas, where former One Direction star Liam Payne performed topless.

A passageway in Northern Datas data center, an abandoned Norwegian mine.

According to Northern Data’s financial statements, the company paid Apeiron 840,000 euros (about $940,000) in 2022 for fundraising activities. Northern Data said it lost a total of 420 million euros on the acquisition of the two cryptocurrency mining companies. According to current and former employees, combined with the general decline in crypto assets in 2022, Northern Data’s financial situation was precarious in early 2023.

A Northern Data spokesman said the company was operating normally and that its financial audit results showed it was adequately capitalised.

Angermayer found Tether with deep pockets

Tether first invested in Northern Data in the spring of 2023, spending €32.3 million to acquire a stake in the company. Tether wanted to keep its involvement confidential, according to people familiar with the matter. Angermayer received a fee equal to 5% of the deal value, the first payment he received for introducing the deal between the two companies.

A few months later, Tether acquired another 48 million euros in Northern Data shares. Again, Northern Data did not publicly acknowledge Tether as an investor. A Northern Data spokesperson said both companies met the disclosure requirements for the transaction.

Angermayer received another 5% fee from the second deal, bringing his total compensation for the two deals to 4 million euros, according to fee invoices reviewed by The Wall Street Journal.

Since then, Tether has publicly helped Northern Data enter the field of artificial intelligence. Tether founded an Irish company called DaMoon and lent Northern Data 400 million euros to purchase advanced Nvidia H100 processors.

Tether CEO Paolo Ardoino calls the firm’s investment in Northern Data a “perfect deal”

Northern Data then took over DaMoon. In return, Tether received newly issued Northern Data shares. Tether CEO Paolo Ardoino described the investment in Northern Data as a perfect deal in a podcast. He praised the companys management, structure and team.

Later, Tether provided Northern Data with a 575 million euro credit line, which has now been fully used. These transactions made Tether the controlling shareholder of Northern Data. Last month, Northern Data said it would raise another 214 million euros (110 million of which came from Tether) to buy more processors.

A Northern Data spokesman declined to answer whether Angermayer or Apeiron received fees for the subsequent deal. He said any fees paid by the company were disclosed as required by law and accounting rules.

Tether, based in the British Virgin Islands, has been a huge success. Investors like it because its cryptocurrency is stable and its value is always $1. It has good liquidity and is well suited for commercial transactions. USDT is also widely used for drug smuggling, terrorist organizations and sanctioned countries, according to government indictments. Government and bank officials said regulators have stepped up scrutiny and some banks have refused to do business with Tether.

Investors like Tethers cryptocurrency because it is stable

Tether said it cooperates with law enforcement around the world and has built and maintained world-class compliance processes to guard against money laundering, terrorist financing and other risks.

Angermayer also helped Tether invest in another venture, Blackrock Neurotech. He is co-chairman of the board and largest shareholder of Blackrock Neurotech, a maker of brain-computer interfaces, small electronic devices that are implanted in the brains of paralyzed patients. The Salt Lake City-based company has been developing the technology since 2008.

Apeiron led a $10 million round of financing for Blackrock Neurotech in 2021. Former employees said that when Angermayer was chairman of the board, Blackrock Neurotech wanted to take advantage of the industry enthusiasm caused by Musks Neuralink and actively promote the companys listing.

But Blackrock Neurotechs business development has run into trouble. Former employees said that Blackrock Neurotech expanded rapidly after receiving investment, more than doubling its workforce and developing new business lines. But then the company carried out a series of layoffs in 2022 and 2023.

Last summer, Angermayer and Apeiron led a $37 million investment round in Blackrock Neurotech. The company burned through more cash, then laid off more people, former employees said.

Blackrock Neurotech has not yet responded to a request for comment.

In April, Tether bought a majority stake in Blackrock Neurotech for $200 million, valuing the company at $350 million. Tether said its business has expanded from simply providing a digital dollar alternative to brain chips that will empower humans in the future evolution.

The entrance to a data center in western Norway that houses Northern Datas computing center

Northern Data, which trades on the German stock market and is considering a U.S. listing, could be worth $20 billion in a few years, according to a slide deck reviewed by The Wall Street Journal. Northern Data declined to comment on a possible U.S. listing.

This article is sourced from the internet: Wall Street Journal: Behind Tethers $1.5 billion investment, the middlemen made a fortune

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