By the halfway point in 2026, the stock price of Twenty One Capital, Inc. (XXI) has been repeatedly rubbed to the ground — according to various statistics, the cumulative decline this year is about 83%, and the last few straws that broke the camel's back pressed down almost simultaneously. On May 19, as the controlling entity of this publicly listed Bitcoin treasury company on the NYSE, Tether acquired all Class A shares from SoftBank and canceled the corresponding Class B shares, completely taking control, while SoftBank cleanly exited from the shareholder and board levels. Immediately afterward, two directors nominated by SoftBank resigned one after another, at least one of whom was originally serving on the audit committee. The number of independent directors on the audit committee of XXI plummeted from at least 2 to just 1, directly hitting the NYSE's red line that "the audit committee must consist of no fewer than 2 independent directors." Ten days later, on May 29, the NYSE formally issued a non-compliance notice to XXI, specifically citing its number of independent directors on the audit committee as being below the requirements of listing rules. This notification solidified the chain reaction of "controlling party takeover — independent director exits — compliance gap" on the timeline. For investors, this is no longer just the risk of Bitcoin price fluctuations but also calls into question governance structure, minority shareholder protection, and information credibility. Under the pressure of compliance and the collapse of trust, the 83% decline in XXI's stock price feels more like an early vote on this takeover game.
After Tether's takeover: Compliance alarms are triggered
The timeline starts with the transaction on May 19. On that day, Tether acquired all Class A shares of XXI from SoftBank and canceled the corresponding Class B shares, directly becoming the sole controlling shareholder. With this overnight change in ownership, SoftBank no longer had the necessity to continue "standing by" — its nominated two directors resigned one after another, at least one of whom was originally sitting on the audit committee. The result is that the audit committee, which originally had at least two independent directors, was left with only one independent director, revealing the first "hard injury" in the governance structure within a few days after the takeover.
The problem is that the NYSE has almost no flexibility regarding such "hard injuries." According to the guidelines and related regulatory requirements in the NYSE's listing company manual, the audit committee must be entirely composed of independent directors, and typically there should be no fewer than two members; once below this threshold, it will be deemed not to meet the audit committee's independence standards. XXI currently having only 1 independent audit committee member is directly classified by the NYSE as "not meeting the requirements for audit committee independence." From the exit of SoftBank-associated directors to the formal non-compliance notice issued by the NYSE on May 29, only about ten days elapsed; the notice also set a rectification deadline of June 5, warning that if independent directors are not restored by then, starting June 9, a "BC" (Below Compliance) tag will be added next to XXI's stock code, plainly informing the market: this company is currently below compliance standards. For a treasury company centered around Bitcoin reserves, this crisis is not merely about profit and loss at the business level, but rather a compliance vacuum created in the board, audit, and information disclosure processes after the change of control. Once this governance gap is widened, any price fluctuation can become a secondary blow to the foundation of trust.
From market darling to 83% plunge: XXI's backlash moment
Before Tether took over, XXI was regarded as the "model stock of Bitcoin treasury concept" among traders: publicly disclosing the holding of tens of thousands of BTC, its stock price was at times treated as a magnifying glass for on-chain prices, and as long as the coin price rose, its market capitalization was lifted accordingly. At that time, the market was willing to pay a premium for this story of "putting Bitcoin into the balance sheet," ignoring whether the governance structure could withstand drastic fluctuations. As 2026 progressed, this premium began to reverse — according to multiple statistics, the stock price of XXI has accumulated a decline of about 83% this year, significantly underperforming the broader market, with the former darling entirely pulled back to the prototype of "risky assets" at the pricing end.
If only the Bitcoin price is observed, it is hard to fully explain XXI's decline. The company's core asset is inherently highly volatile, something the market is familiar with; the real trigger for severe repricing is the governance score beginning to falter: after Tether completed its full control of XXI in May, SoftBank exited, independent directors were lost, and the number of audit committee members fell below the compliance red line. These technical changes should have appeared in the annual report footnotes but were magnified by stock prices into a collective inquiry of "who is responsible to minority shareholders." In fact, before the NYSE issued its non-compliance notice, the valuation of XXI had already been compressed for some time, and the formal compliance warning from the regulatory body was like the final blow, shifting investors' risk aversion sentiments from concerns over Bitcoin fluctuations to doubts about the governing intentions of the controlling shareholder. With the current stock price and compliance turmoil overlapping, XXI is no longer just a tool betting on Bitcoin's balance sheet, but is forced to become a high-risk sample for the market to observe whether a Bitcoin treasury company under Tether's control can successfully run a governance experiment.
The audit committee vacancy behind: The tug-of-war between Tether and minority shareholders
In the U.S. corporate governance framework, the audit committee serves as a gatekeeper between major shareholders and minority shareholders: it is composed of independent directors responsible for monitoring the quality of financial reports, questioning accounting estimates and significant transactions, and is required in principle to identify potential interest transfers in mergers, asset disposals, and financing arrangements. The NYSE and SEC have set minimum specifications for this gate through rules like Section 303A.07(a) of the Listing Manual and Rule 10A-3 — that members must be independent directors and not too few in number, to prevent controlling shareholders from having unchecked power. After the resignation of SoftBank's two directors, the independent directors of the audit committee fell from at least 2 to just 1, directly crossing this compliance red line, and the NYSE's non-compliance notice on May 29 merely made this structural issue public.
The problem is that after SoftBank exited, the board's decision-making power was almost concentrated on Tether's side, and it was precisely at this time that the independence of the audit committee was weakened. Some market analysts are concerned that under Tether's full control of XXI, in the future, whether in new mergers, asset restructuring, or internal resource allocation, any processes lacking a sufficiently strong independent audit committee oversight may lead to the dilution of minority shareholders' rights regarding valuation and transaction terms. This series of views represents the market's interpretation of potential governance risks rather than established facts. The company publicly responded that it will "promptly appoint additional independent audit committee members" to restore compliance, attempting to signal governance repair to the outside world, but against the backdrop of a stock price that has already dropped by about 83% this year, the safety cushion and bargaining space left for minority shareholders are thinning, leaving them with only the option to continue bearing the discount or voting with their feet to exit while the rules still allow.
Regulatory countdown: Can XXI fill the positions before June 5?
From the NYSE's issuance of the non-compliance notice on May 29 to the rectification deadline of June 5, there is only a week. For XXI, this is not a simple paperwork task of "filling one position," but rather finding audit committee members who meet the legally defined independence criteria and are willing to sit on this "hot seat" within a very short window. After Tether has fully taken control and SoftBank-associated directors collectively exited, any new independent director who comes in will face a situation where there is only one member left on the audit committee, the market is highly sensitive to conflicts of interest, and regulatory agencies have already intervened. This role itself carries asymmetric reputational and legal risks, making truly qualified candidates who are willing to accept the position scarce. Although the company has stated that it will "promptly appoint additional independent audit committee members," as of the current research date, June 2, 2026, publicly available information has not shown that new independent directors have officially been appointed, and the time pressure has transformed from "three days left" on the calendar to "practically no room for error" in operational practices.
If the independent audit committee is not fully constituted by June 5, the NYSE will follow its established timeline and from June 9 will mark XXI's stock code with "BC" (Below Compliance), clearly placing this Bitcoin treasury company in the "below compliance standards" list. "BC" itself does not equate to a delisting decision, but adding a governance shortfall label to a stock that has already dropped by about 83% this year inevitably further damages the company's image, amplifying negative narratives and attracting more scrutiny from regulators and investors regarding its board operations. In the NYSE's consistent phased handling logic, there remains room for maneuvering between written warnings, "BC" markings, and whether to initiate delisting procedures; the ultimate outcome depends on whether XXI can timely fill the positions and the persuasiveness of subsequent governance rectifications. As of June 2, 2026, the events are still evolving, and the real factors determining whether the discount continues to expand are not just the Bitcoin price, but rather when the director appointment announcements will be made, how independent the candidates are, and the NYSE's feedback on these actions.
Compliance red lines closing in on Tether: The test of the Bitcoin treasury model
XXI's encounter with the NYSE's independent audit committee red line essentially marks the first significant clash between Tether's total control and a Bitcoin reserve-based treasury company with the stringent and linear compliance mechanisms of the U.S. stock market, serving as a litmus test on whether crypto-native capital structures can be long-term accepted by Wall Street. From the collective exit of directors nominated by SoftBank to the audit committee's independent directors falling from at least 2 to just 1, to the non-compliance notice on May 29, the rectification deadline of June 5, and the potential marking of "BC" on June 9, a clear regulatory timeline, combined with the approximately 83% decline in stock price this year, has transformed an abstract "governance discount" into tangible losses in valuation and liquidity. For all companies attempting to package Bitcoin assets as a listed vehicle, governance and compliance are transitioning from previously being "plus factors" to becoming survival threshold criteria for valuation. Standing at this juncture on June 2, regardless of whether XXI can fill the independent audit committee by June 5, the market will recalculate whether Tether's assets should enjoy governance premiums or be subjected to governance discounts; for investors, in addition to monitoring Bitcoin price fluctuations, the next things to track are how Tether will rebuild board independence while maintaining control, how it will improve the quality of information disclosure, and how it will respond to minority shareholder protection concerns, as these choices will draw clearer boundaries for the future of the entire Bitcoin treasury model in traditional capital markets.
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