ETHZilla acquires 20% stake in Karus to bring AI-modeled auto loans onchain by 2026

ETHZilla takes stake in Karus to tokenize AI-modeled auto-loan portfolios

The deal grants ETHZilla access to Karus's AI underwriting engine and loan origination network, positioning the crypto treasury company to offer auto credit onchain in 2026. Crypto treasury company ETHZilla (ETHZ) has taken a strategic step into onchain credit with the acquisition of a 20% fully diluted stake in automotive-finance AI startup Karus. The $10 million deal includes $3 million in cash and $7 million in ETHZilla stock, and will allow the company to integrate Karus's underwriting AI models into its blockchain stack to issue tokenized auto-loan portfolios. According to Wednesday's announcement, Karus's decisioning engine is trained on more than 20 million historical auto-loan outcomes and has evaluated over $5 billion in loans at origination, giving ETHZilla a pre-modeled data set to structure AI-segmented pools with onchain settlement. The first tokenized portfolios are slated for early 2026. Karus's network of car dealers, banks and credit unions gives ETHZilla a large pipeline of potential loan portfolios for future onchain securitization. ETHZilla estimates that every $100 million deployed into Karus-modeled tokens could generate $9 to $12 million in adjusted EBITDA -- a measure of operating profit before interest, taxes, depreciation and amortization. Under the agreement, ETHZilla will take a seat on Karus's board and receive certain governance rights. Karus's backers include lead investor Stage Global Partners, as well as Tacoma Venture Fund and Capital Eleven. Automotive loans comprise a significant segment of the US asset-backed securities market, which had approximately $1.6 trillion outstanding as of December 2024, according to SEC data. John Kristoff, head of investor relations at ETHZilla, told Cointelegraph that the acquisition provides access to loan exposures that were previously limited to large institutional investment firms involved in complex securitization structures. "By bringing auto loans onchain, we are able to open up these high-quality, income-generating assets to a global base of investors for the first time." ETHzilla is currently the sixth-largest Ether treasury company, with 94,030 Ether (ETH) on its balance sheet, according to CoinGecko data. Related: Ethereum treasury demand collapses: Will it delay ETH's recovery to $4K? Tokenized debt markets have accelerated in 2025, with institutions increasingly using blockchain rails to issue and trade fixed-income products. Tokenized US Treasurys and tokenized private credit, which bring government debt and corporate loans onchain, have become two of the largest segments of the emerging tokenized-debt market. According to RWA.xyz data, tokenized Treasurys have grown to $9.21 billion, more than tripling from $2.68 billion a year earlier. The shift has been driven by major asset managers, with BlackRock's BUIDL fund currently holding about $2.3 billion in tokenized Treasurys and Franklin Templeton's US Government Money Fund holding roughly $827 million. The tokenized private credit market has been dominated by Figure, which accounts for $13.98 billion of the sector's $19.02 billion market cap. The blockchain-based lender debuted on the Nasdaq on Sept. 11 after raising its list price several times as demand for its IPO soared.

ETHZilla acquires 20% stake in AI credit platform Karus for $10 million By Investing.com

PALM BEACH - ETHZilla Corporation (NASDAQ:ETHZ) has acquired a 20% fully-diluted interest in Karus, Inc., an artificial intelligence platform for auto finance decisioning and portfolio analytics, according to a press release issued Wednesday. The blockchain company, currently valued at $227.68 million, has seen its shares trading near $10.64, close to InvestingPro's calculated Fair Value. The transaction, valued at $10 million, consists of $3 million in cash and $7 million in ETHZilla common stock. The deal closed on December 2, 2025, and will grant ETHZilla a seat on Karus's board of directors along with certain governance rights. This acquisition comes as ETHZilla maintains a strong liquidity position with a current ratio of 10.07, indicating its liquid assets substantially exceed short-term obligations, according to InvestingPro data. ETHZilla plans to integrate Karus's AI-driven underwriting into its blockchain infrastructure to enable the tokenization of auto-loan assets. The company will gain access to Karus's network of auto loan originators, including over 20,000 car dealerships, credit unions, and banks as potential sources for tokenization portfolios. "Karus's AI models are bringing the pricing and management of loan-level risk and cash flows into the future," said McAndrew Rudisill, chairman and CEO of ETHZilla. The integration aims to provide investors with transparent, risk-tiered exposure to auto credit with on-chain settlement and analytics. The first tokenized portfolios are expected to launch in early 2026, with Liquidity.io serving as the exclusive digital-asset exchange for trading these portfolios. Karus's AI decisioning engine is trained on over 20 million historical auto loan outcomes and analyzes more than 1,000 variables across credit, vehicle, collateral, and macroeconomic data. The company has already processed over $5 billion in auto loan volume through its point-of-origination decisioning engine. Karus is backed by investors including Stage Global Partners, Tacoma Venture Fund, and Capital Eleven, as well as Tacora Capital CEO Keri Findley, who is funded by Peter Thiel. In other recent news, EthZilla Corp reported its third-quarter 2025 earnings, revealing a net loss from continuing operations of $208.7 million and revenues of $4.1 million from staking yields. This financial update comes amidst the company's strategic shift from biotech to digital asset management. In addition, EthZilla announced the cancellation of 2,099,741 treasury shares repurchased under a previously approved share repurchase program. Following this cancellation, the total number of EthZilla's issued and outstanding common shares stands at 19,301,223. Further developments include the cancellation of restricted stock awards to CEO McAndrew Rudisill and the company's directors, following shareholder feedback. This decision was formalized through rescission agreements, with no consideration paid. These recent actions reflect EthZilla's ongoing response to shareholder concerns and strategic adjustments. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.