The Wall Street Journal: Tether invests $1.5 billion, "middlemen" make a fortune

Authors: Ben Foldy, Caitlin Ostroff, The Wall Street Journal

Compiled by: Luffy, Foresight News

The issuer behind the world's most popular cryptocurrency, USDT, Tether, is making significant acquisitions. It has acquired a majority stake in the artificial intelligence company Northern Data and the brain-computer chip company Blackrock Neurotech. Notably, both transactions were facilitated by the same German investor, whose referrals have had mixed results.

The stablecoin USDT currently has a circulating market value of over $115 billion, and thanks to substantial interest rates, Tether can earn about $4 billion annually from the U.S. Treasury bonds backing USDT.

Tether has enlisted tech investor and entrepreneur Christian Angermayer to help invest this massive sum. This versatile financier has also made a fortune through some unconventional investments, including psychedelics, dinosaur fossils, and alternatives to performance-enhancing drugs used by athletes during the Olympics.

So far, Angermayer has helped Tether invest about $1.5 billion in the two companies he has stakes in, earning substantial commissions from the transactions. However, the companies they invested in have faced perennial losses.

Over the past year, Tether has acquired a majority stake in Northern Data, a German data center operator that is currently operating at a loss and aims to become an AI company. The other company Tether acquired, Blackrock Neurotech, is a struggling brain-computer interface company based in Utah, which competes with Elon Musk's Neuralink.

Tether did not respond to our request for comment. A spokesperson for Northern Data stated that the company's revenue growth proves that its strategic investments in the AI field are successful.

Tether is not the first cryptocurrency company to make large-scale investments. Previously, the peak-time cryptocurrency exchange FTX spent $1 billion to acquire a Bitcoin mining company in the Kazakh steppe and invested $500 million in the AI company Anthropic.

Last October, as cryptocurrencies surged, a cryptocurrency offline trading store in Hong Kong displayed the exchange rate of USDT.

Angermayer's Controversial Track Record

Angermayer's family office, Apeiron Investment Group, is based in Malta and specializes in connecting investors and companies with talent. Apeiron has facilitated some large investment deals for cash-rich buyers, but these investments have ultimately performed poorly.

In 2017, Angermayer's family office helped China's HNA Group become the largest shareholder of the struggling German bank Deutsche Bank. After the deal was completed, the bank's stock price fell further. A few years later, HNA Group sold part of its stake due to cash shortages. Ultimately, the debt-laden HNA Group, under scrutiny from the Chinese government, filed for bankruptcy.

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

Angermayer then began collaborating with Japan's SoftBank Group, which has raised the largest venture capital fund in the world to date. He introduced SoftBank to the German payment processor Wirecard, which was facing accounting fraud allegations at the time.

SoftBank helped stabilize Wirecard by issuing $1 billion in convertible bonds. Both SoftBank and Wirecard paid millions in brokerage fees to Angermayer's family office.

Months after receiving SoftBank's investment, Wirecard signed a long-term cooperation agreement with cybersecurity company Cyan AG, in which Angermayer and a business partner held a 27% stake. This business partner had also served as HNA's representative on Deutsche Bank's board. In this collaboration, Angermayer was responsible for introducing executives from Cyan and Wirecard to each other.

A year after the deal with SoftBank was finalized, Wirecard collapsed due to an accounting scandal. SoftBank sold the bonds to investors, who suffered significant losses.

An insider stated that Apeiron received compensation as the introducer of the deal but did not participate in the negotiations or the deal itself. The insider also mentioned that Angermayer facilitated several other less controversial transactions.

Recently, Angermayer and Apeiron have begun focusing on what he calls "the important agenda for the next human society," building a portfolio in areas like cryptocurrency, longevity, and psychedelics. With the support of tech investor Peter Thiel, Angermayer co-founded Enhanced Games, advocating for the use of performance-enhancing drugs in sports events.

Angermayer and Northern Data

Angermayer is often seen wearing flashy shirts adorned with mushroom patterns. He has a tattoo of the chemical symbol for psilocybin (a neurotoxin with psychedelic effects) on his forearm. He has hosted lavish birthday parties in 17th-century Austrian palaces and at a cryptocurrency conference in the Bahamas. On Instagram, Angermayer showcases his collection of dinosaur skeletons and ancient sculptures.

Angermayer's personal life and work sometimes intertwine. In 2022, Apeiron marketed a new fund to investors called "Apeiron Jurassic Fund One," aiming to raise $30 million to invest in dinosaur fossils. Draft promotional materials stated that the fund would leverage "a unique global network of bounty hunters," starting with Angermayer's fossil collection, which includes a juvenile Tyrannosaurus rex and a Brachiosaurus. The fund was ultimately abandoned.

Angermayer's other investments include a significant stake in Northern Data, a publicly traded Bitcoin miner in Germany that has recently pivoted to AI cloud hosting services. Northern Data acquired two cryptocurrency mining companies in which Angermayer held stakes, and he received a portion of the new company's shares. One of these companies was co-founded by a former employee of his family office.

After this, Angermayer began raising funds for Northern Data and charging service fees. Apeiron also charged Northern Data fees for introducing investors. The fees included sponsorship and promotion at a cryptocurrency bash in the Bahamas, where former One Direction star Liam Payne performed shirtless.

A corridor in a Northern Data data center, which is located in an abandoned Norwegian mine.

According to Northern Data's financial statements, the company paid Apeiron €840,000 (approximately $940,000) for fundraising activities in 2022. Northern Data reported a total loss of €420 million from acquiring the two cryptocurrency mining companies. Current and former employees stated that, coupled with the general decline in crypto assets in 2022, Northern Data's financial situation was precarious at the beginning of 2023.

However, a spokesperson for Northern Data stated that the company has been operating normally, and financial audits show that the company is currently well-capitalized.

Angermayer Found a Wealthy Partner in Tether

Tether first invested in Northern Data in the spring of 2023, spending €32.3 million to acquire shares in the company. According to insiders, Tether wanted to keep its involvement confidential. Angermayer received a fee equivalent to 5% of the transaction value, marking the first payment he received for facilitating the deals between the two companies.

Months later, Tether acquired an additional €48 million in Northern Data stock. Similarly, Northern Data did not publicly acknowledge Tether as its investor. A spokesperson for Northern Data stated that both companies met the disclosure requirements for the transaction.

Angermayer earned another 5% fee from the second transaction. According to invoices reviewed by The Wall Street Journal, he received a total of €4 million in fees from these two transactions.

Subsequently, Tether began publicly assisting Northern Data in its foray into the AI sector. Tether established an Irish company called DaMoon and lent Northern Data €400 million to purchase advanced Nvidia H100 processors.

Tether CEO Paolo Ardoino described the company's investment in Northern Data as "a perfect deal."

Northern Data then took over DaMoon. In return, Tether received newly issued shares of Northern Data. Tether CEO Paolo Ardoino described the investment in Northern Data as "a perfect deal" in a podcast, praising the company's management, structure, and team.

Afterward, Tether provided Northern Data with a €575 million credit line, which has now been fully utilized. These transactions made Tether the majority shareholder of Northern Data. Last month, Northern Data announced plans to raise an additional €214 million (of which €110 million comes from Tether) to purchase more processors.

A spokesperson for Northern Data declined to comment on whether Angermayer or Apeiron received fees from the later transactions. He stated that any fees paid by the company have been disclosed in accordance with legal and accounting standards.

Tether, headquartered in the British Virgin Islands, has achieved significant success. Investors favor it because its cryptocurrency is stable, maintaining a value of $1. Its liquidity is excellent, making it suitable for commercial transactions. According to government indictments, USDT is also widely used in drug trafficking, terrorist organizations, and sanctioned countries. Government and banking officials have stated that regulators have intensified scrutiny, with some banks refusing to do business with Tether.

Investors favor Tether's cryptocurrency because of its stable value.

Tether claims it collaborates with global law enforcement and has established and maintained world-class compliance processes to guard against money laundering, terrorist financing, and other risks.

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

In 2021, Apeiron led a $10 million funding round for Blackrock Neurotech. Former employees stated that while Angermayer served as chairman, Blackrock Neurotech sought to capitalize on the industry hype generated by Musk's Neuralink to aggressively push for an IPO.

However, Blackrock Neurotech's business development has faced challenges. Former employees indicated that after receiving investment, Blackrock Neurotech rapidly expanded, doubling its workforce and developing new business lines. However, the company underwent a series of layoffs in 2022 and 2023.

Last summer, Angermayer and Apeiron led a $37 million investment round for Blackrock Neurotech. Former employees stated that the company burned through more cash and then laid off more staff.

Blackrock Neurotech has not responded to requests for comment.

In April of this year, Tether acquired a majority stake in Blackrock Neurotech for $200 million, valuing the company at $350 million. Tether stated that its business scope has expanded from merely providing a digital dollar alternative to brain chips, aiming to "empower humanity in the future evolution process."

An entrance to a data center in western Norway, which houses a Northern Data computing center.

Northern Data's stock is traded on the German securities market and is currently considering a U.S. listing. According to a slide seen by The Wall Street Journal, some bankers advocating for Northern Data's U.S. listing estimate that the company's value could reach $20 billion in a few years. Northern Data declined to comment on the potential U.S. listing.