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

ETHZilla Secures Strategic Position in Auto-Loan Tokenization

Crypto treasury company ETHZilla has acquired a 20% fully diluted stake in Karus, an automotive-finance AI startup specializing in auto finance decisioning and portfolio analytics 1

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. The $10 million transaction, which closed on December 2, 2025, consists of $3 million in cash and $7 million in ETHZilla common stock 2

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. The deal positions ETHZilla to integrate AI-driven underwriting capabilities into its blockchain infrastructure and launch tokenized auto-loan portfolios targeting early 2026.

AI Credit Platform Brings Sophisticated Risk Modeling Onchain

Karus operates an AI decisioning engine trained on more than 20 million historical auto-loan outcomes, analyzing over 1,000 variables across credit, vehicle, collateral, and macroeconomic data 2

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. The platform has already evaluated over $5 billion in loans at origination, providing ETHZilla with a pre-modeled data set to structure AI-segmented pools with onchain settlement 1

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. This extensive loan origination network includes over 20,000 car dealerships, credit unions, and banks, creating a substantial pipeline for future securitization 2

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. McAndrew Rudisill, chairman and CEO of ETHZilla, emphasized that Karus's AI models are advancing the pricing and management of loan-level credit risk and cash flows.

Real World Asset Integration Targets Institutional Returns

The integration aims to democratize access to automotive loans, a significant segment of the US asset-backed securities market valued at approximately $1.6 trillion as of December 2024 1

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. ETHZilla estimates that every $100 million deployed into Karus-modeled tokens could generate $9 to $12 million in adjusted EBITDA 1

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. John Kristoff, head of investor relations at ETHZilla, told Cointelegraph the acquisition provides access to loan exposures previously limited to large institutional investment firms involved in complex securitization structures. The first tokenized portfolios will be available exclusively on Liquidity.io, offering transparent, risk-tiered exposure to auto credit with blockchain rails for settlement and analytics 2

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Strategic Governance and Market Context

Under the agreement, ETHZilla will take a seat on Karus's board and receive certain governance rights 1

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. Karus's backers include Stage Global Partners as lead investor, along with Tacoma Venture Fund and Capital Eleven . ETHZilla, currently the sixth-largest Ether treasury company with 94,030 ETH on its balance sheet, is valued at $227.68 million with shares trading near $10.64 2

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. The company maintains strong asset management capabilities with a current ratio of 10.07, indicating liquid assets substantially exceed short-term obligations.

Tokenized Debt Markets Show Accelerated Growth

The move comes as tokenized debt markets accelerate in 2025, with institutions increasingly using blockchain infrastructure to issue and trade fixed-income products 1

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. Tokenized US Treasurys have grown to $9.21 billion, more than tripling from $2.68 billion a year earlier, with BlackRock's BUIDL fund holding about $2.3 billion and Franklin Templeton's US Government Money Fund holding roughly $827 million 1

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. The tokenized private credit market has reached $19.02 billion, dominated by Figure with $13.98 billion in market cap. This expansion signals growing institutional confidence in bringing Real World Asset exposure onchain, with auto-loan tokenization representing the next frontier in accessible, transparent fixed-income investments for global investors.