{"investigation":{"slug":"strike","entity_name":"Strike","trust_score":34,"severity_base":null,"score_modifier":-10,"confidence":0.72,"status":"published","content_type":"investigation","summary":"Strike (operated by Zap Solutions, Inc.) is a Bitcoin and Lightning Network payments application founded by Jack Mallers. The platform has faced scrutiny over a 2023 data breach it initially denied, the use of Tether (USDT) as a backing for purported USD cash balances for non-US users, and a 2026 proposed merger with Twenty One Capital (XXI) that raises serious conflict-of-interest concerns given Mallers serves as CEO of both entities.","sections":[{"content":"Strike is a Bitcoin payments application operated by Zap Solutions, Inc. and founded by CEO Jack Mallers. The platform enables peer-to-peer payments over Bitcoin's Lightning Network and supports buying, selling, and sending bitcoin globally. Strike expanded to over 65 countries in 2023 and, as of March 2026, obtained a BitLicense and Money Transmitter License from the New York State Department of Financial Services (NYDFS), completing licensure across all 50 U.S. states. The company had previously relied on compliance consultants to build out its state-by-state licensing program. Strike is incorporated under the parent entity Zap Solutions Holdings, Inc.","heading":"Overview and Background","sources":[{"url":"https://strike.me/blog/strike-launches-global-money-app-to-3-billion-people-in-over-65-countries/","name":"Strike launches global money app to 3 billion people in over 65 countries","type":"official","credibility":1},{"url":"https://www.businesswire.com/news/home/20260305426748/en/Strike-Receives-BitLicense-and-Money-Transmitter-License-from-the-New-York-Department-of-Financial-Services","name":"Strike Receives BitLicense and Money Transmitter License from NYDFS — Business Wire","type":"regulatory","credibility":1},{"url":"https://www.innreg.com/resources/case-studies/strike","name":"Strike Establishes US Compliance Program with InnReg's Support","type":"other","credibility":2}],"severity":"medium"},{"content":"In late October 2023, Strike customers began receiving targeted phishing emails sent to email addresses they had used exclusively to register with Strike, with scam messages impersonating crypto platforms including Etherscan and OpenSea. On approximately October 31, 2023, on-chain investigator ZachXBT published evidence of the breach on Telegram. Strike initially responded to media inquiry by stating 'There's no evidence that Strike was breached,' a denial made despite visible evidence circulating publicly. Within hours of ZachXBT's disclosure, Strike reversed course and sent notifications to affected customers acknowledging that their email list had been compromised by a third-party vendor. The incident drew criticism for the company's initial misleading public statement. This is the primary known ZachXBT involvement with Strike.","heading":"2023 Data Breach: Initial Denial Contradicted by ZachXBT","sources":[{"url":"https://protos.com/jack-mallers-strike-denied-an-email-breach-that-definitely-happened/","name":"Jack Mallers' Strike denied an email breach that definitely happened — Protos","type":"news_article","credibility":2},{"url":"https://www.theblock.co/post/260119/bitcoin-payments-app-strike-says-no-evidence-of-breach-amid-claims","name":"Bitcoin payments app Strike says no evidence of breach amid claims — The Block","type":"news_article","credibility":2},{"url":"https://crypto.news/strike-accused-of-alleged-data-breach/","name":"Strike accused of alleged data breach — Crypto News","type":"news_article","credibility":2},{"url":"https://beyondmachines.net/event_details/strike-reports-data-leak-of-customer-emails-after-initially-denying-any-issues-8-w-8-g-q","name":"Strike reports data leak of customer emails after initially denying any issues — Beyond Machines","type":"news_article","credibility":2}],"severity":"medium"},{"content":"Strike integrated Tether's USDT stablecoin and represents 'cash' balances for non-U.S. customers in USDT rather than fiat currency. According to Strike's official FAQ, any reference to 'cash' or the '$' symbol in the Strike app for non-U.S. users should be interpreted as USDT, not actual fiat currency. Strike discloses this in its terms and FAQ documentation; however, critics have argued the use of 'cash' and '$' symbols in the app interface was insufficiently prominent and could mislead users into believing they held actual USD. When Strike initially assisted El Salvador's Bitcoin adoption in 2021, the reliance on USDT drew criticism from Bitcoin-only advocates, and Mallers indicated at the time that USDT would be phased out. El Salvador's subsequent regulatory clarity enabled Strike to reduce USDT reliance in that market. Separately, Strike announced a $2.1 billion credit facility from Tether to power Bitcoin-backed loans as of 2026, cementing a deep financial relationship between the two entities.","heading":"USDT / Tether Integration and 'Cash' Balance Transparency","sources":[{"url":"https://strike.me/en/faq/what-is-my-cash-or-usdt-balance-wr/","name":"What is my cash or USDT balance? — Strike FAQ","type":"official","credibility":1},{"url":"https://www.theblock.co/post/231714/strike-tether-bitcoin-payments","name":"Bitcoin payments app Strike integrates Tether's USDT stablecoin — The Block","type":"news_article","credibility":2},{"url":"https://bitcoinmagazine.com/business/strike-abandons-usdt-in-el-salvador","name":"With Bitcoin Clarity, El Salvador Allows Strike To Abandon USDT — Bitcoin Magazine","type":"news_article","credibility":2},{"url":"https://bitcoinmagazine.com/news/strike-ceo-jack-mallers-bitcoin-conference","name":"Strike CEO Jack Mallers Announces Lending Proof-of-Reserves and Backs Tether Merger Plan — Bitcoin Magazine","type":"news_article","credibility":2},{"url":"https://www.yahoo.com/now/strike-phasing-usdt-bitcoin-based-194516505.html","name":"Strike Is Phasing Out USDT From Bitcoin-Based El Salvador Remittances, CEO Says — Yahoo Finance","type":"news_article","credibility":2}],"severity":"medium"},{"content":"Strike operated across 49 U.S. states and multiple international markets prior to March 2026, when it received its BitLicense and Money Transmitter License from NYDFS, completing its U.S. state licensing program. The company partnered with compliance specialists to navigate the complex patchwork of state money transmission regulations, including AML, fraud prevention, and cybersecurity frameworks. No formal enforcement actions by the SEC, CFTC, or FinCEN against Strike or Zap Solutions, Inc. were identified at the time of this investigation. Strike's licenses page confirms its regulatory registrations.","heading":"Licensing and Regulatory History","sources":[{"url":"https://strike.me/legal/licenses/","name":"Strike Licenses — Strike.me","type":"official","credibility":1},{"url":"https://www.coindesk.com/business/2026/03/06/strike-secures-new-york-bitlicense-opening-bitcoin-financial-services-to-state-residents","name":"Strike Receives BitLicense and Money Transmitter License from NYDFS — CoinDesk","type":"news_article","credibility":1},{"url":"https://www.innreg.com/resources/case-studies/strike","name":"Strike Establishes US Compliance Program with InnReg's Support","type":"other","credibility":2}],"severity":"medium"},{"content":"In September 2025, JPMorgan Chase sent Jack Mallers a letter closing all his personal accounts, citing 'concerning activity' without providing further detail. Mallers held the letter privately for approximately two months before publicly disclosing the closure in November 2025, posting on social media that JPMorgan 'threw me out of the bank.' Neither Mallers nor JPMorgan publicly disclosed the specific activity flagged. Senator Cynthia Lummis characterized the closure as an extension of anti-crypto banking pressure. Analysts noted potential competitive motivations, as JPMorgan operates JPMCoin, which has functional similarities to Strike's core payment rail. The matter remained unresolved with both parties declining further public comment as of December 2025.","heading":"JPMorgan Account Closure and Debanking Controversy","sources":[{"url":"https://www.theblock.co/post/380099/strike-jack-maller-jpmorgan","name":"JPMorgan Chase closes Strike CEO Jack Mallers' accounts — The Block","type":"news_article","credibility":2},{"url":"https://www.coindesk.com/business/2025/12/01/jpmorgan-and-strike-ceo-jack-mallers-go-silent-leave-debanking-questions-unanswered","name":"JPMorgan and Strike CEO Jack Mallers Go Silent, Leaving Debanking Questions Unanswered — CoinDesk","type":"news_article","credibility":1},{"url":"https://bitcoinmagazine.com/business/jack-mallers-debanked-by-jpmorgan","name":"Strike CEO Jack Mallers Debanked By JPMorgan — Bitcoin Magazine","type":"news_article","credibility":2}],"severity":"medium"},{"content":"In April 2026, Tether Investments proposed a three-way merger combining Twenty One Capital (XXI), Strike, and Elektron Energy under the XXI ticker. Jack Mallers serves as CEO of both XXI and Strike simultaneously, placing him on both sides of the proposed transaction — as acquirer and as head of a primary acquisition target — without an independent committee disclosed to protect XXI minority shareholders. The proposal included no financial terms, valuation, or timeline. Tether holds majority stakes in both XXI and, through this arrangement, Strike. Mallers publicly endorsed the deal the same day Tether announced it. Any completed transaction would require SEC review and shareholder approval. Governance analysts noted the structure creates material conflict-of-interest risks. Strike's Bitcoin lending business, announced in 2026 and backed by a $2.1 billion Tether credit facility, adds further financial interdependence between Strike and Tether ahead of any potential merger.","heading":"Twenty One Capital Merger: Conflict-of-Interest Concerns","sources":[{"url":"https://www.coindesk.com/markets/2026/04/29/jack-mallers-twenty-one-capital-surges-after-majority-holder-tether-proposes-3-way-merger","name":"XXI higher by 8% on merger plans with Strike and Elektron Energy — CoinDesk","type":"news_article","credibility":1},{"url":"https://finance.biggo.com/news/RhjM350BtCxy99G5-qax","name":"XXI Rallies on Tether-Backed Merger Plan — But CEO Jack Mallers Sits on Both Sides of the Table — BigGo Finance","type":"news_article","credibility":2},{"url":"https://tether.io/news/tether-investments-proposes-merger-plans-at-twenty-one-capital-to-accelerate-its-strategic-direction/","name":"Tether Investments Proposes Merger Plans at Twenty One Capital — Tether.io","type":"official","credibility":2},{"url":"https://unchainedcrypto.com/tether-proposes-three-way-merger-to-build-integrated-bitcoin-platform-around-twenty-one-capital-unchained/","name":"Tether Proposes Three-Way Merger to Build Integrated Bitcoin Platform — Unchained Crypto","type":"news_article","credibility":2},{"url":"https://www.theblock.co/post/353319/jack-mallers-bitcoin-payments-app-strike-is-moving-into-the-crypto-lending-business","name":"Jack Mallers' Bitcoin payments app Strike is moving into crypto lending — The Block","type":"news_article","credibility":2}],"severity":"medium"}],"timeline":[{"date":"2020","event":"Strike (Zap Solutions, Inc.) founded by Jack Mallers as a Bitcoin Lightning Network payments application.","source":"","source_url":"https://www.bitstamp.net/en-gb/learn/people-profiles/jack-mallers/","date_original":"2020-01-01"},{"date":"2021-06","event":"Strike supports El Salvador Bitcoin adoption; reliance on USDT draws criticism from Bitcoin community. Mallers says USDT will be phased out.","source":"","source_url":"https://www.yahoo.com/now/strike-phasing-usdt-bitcoin-based-194516505.html","date_original":"2021-06-01"},{"date":"2023-06","event":"Strike announces global expansion to over 65 countries, reaching approximately 3 billion potential users.","source":"","source_url":"https://strike.me/blog/strike-launches-global-money-app-to-3-billion-people-in-over-65-countries/","date_original":"2023-06-01"},{"date":"2023-10-31","event":"ZachXBT publishes evidence on Telegram of a Strike customer email data breach. Strike initially states 'There's no evidence that Strike was breached.' Within hours Strike reverses position, acknowledging a third-party vendor breach.","source":"","source_url":"https://protos.com/jack-mallers-strike-denied-an-email-breach-that-definitely-happened/"},{"date":"2023-11","event":"Strike confirms email list breach by third-party vendor to customers; phishing emails had targeted Strike users with scams mimicking Etherscan and OpenSea.","source":"","source_url":"https://www.theblock.co/post/260119/bitcoin-payments-app-strike-says-no-evidence-of-breach-amid-claims","date_original":"2023-11-01"},{"date":"2025-09-02","event":"JPMorgan Chase closes Jack Mallers' personal accounts, citing 'concerning activity' without elaboration.","source":"","source_url":"https://www.theblock.co/post/380099/strike-jack-maller-jpmorgan"},{"date":"2025-11-23","event":"Mallers publicly discloses JPMorgan account closure on social media, two months after the September letter.","source":"","source_url":"https://www.coindesk.com/business/2025/12/01/jpmorgan-and-strike-ceo-jack-mallers-go-silent-leave-debanking-questions-unanswered"},{"date":"2026-03-05","event":"Strike receives BitLicense and Money Transmitter License from NYDFS, completing licensure across all 50 U.S. states.","source":"","source_url":"https://www.businesswire.com/news/home/20260305426748/en/Strike-Receives-BitLicense-and-Money-Transmitter-License-from-the-New-York-Department-of-Financial-Services"},{"date":"2026-04-29","event":"Tether proposes three-way merger of Twenty One Capital (XXI), Strike, and Elektron Energy. Jack Mallers, CEO of both XXI and Strike, endorses the deal publicly the same day, raising conflict-of-interest concerns.","source":"","source_url":"https://www.coindesk.com/markets/2026/04/29/jack-mallers-twenty-one-capital-surges-after-majority-holder-tether-proposes-3-way-merger"}],"sources_used":[{"url":"https://strike.me/blog/strike-launches-global-money-app-to-3-billion-people-in-over-65-countries/","name":"Strike launches global money app to 3 billion people in over 65 countries","type":"official","archive_url":"http://web.archive.org/web/20260201151312/https://strike.me/blog/strike-launches-global-money-app-to-3-billion-people-in-over-65-countries/","credibility":1,"archive_timestamp":"2026-02-01T15:13:12+00:00"},{"url":"https://www.businesswire.com/news/home/20260305426748/en/Strike-Receives-BitLicense-and-Money-Transmitter-License-from-the-New-York-Department-of-Financial-Services","name":"Strike Receives BitLicense and Money Transmitter License from NYDFS — Business 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