ETHZilla Corporation closed a deal on December 2, 2025 to acquire a 20 % fully‑diluted interest in Karus, Inc., a leading artificial‑intelligence platform for auto‑finance decisioning and portfolio analytics. The transaction was financed with $3 million in cash and $7 million in ETHZilla common stock, giving the company a 20 % ownership stake and a seat on Karus’s board of directors.
Karus’s AI underwriting engine is trained on more than 20 million historical auto‑loan outcomes and analyzes over 1,000 variables. The platform has processed $5 billion in auto‑loan volume and serves a network of more than 20,000 auto‑loan originators. By integrating this technology with ETHZilla’s blockchain infrastructure, the company plans to tokenize auto‑loan assets and launch the first tokenized portfolios in early 2026.
The acquisition is a strategic pivot for ETHZilla, which has moved from a biotechnology focus to a corporate treasury model centered on Ethereum accumulation and yield generation. Adding Karus expands the company’s revenue mix beyond DeFi staking and incentive‑token income, positioning it to capture a share of the $1.6 trillion U.S. asset‑backed‑securities market through tokenized credit.
In its Q3 2025 earnings, ETHZilla reported a net loss from continuing operations of $208.7 million, driven largely by one‑time non‑cash items related to July 2025 transaction expenses and write‑downs. However, the company generated $8.5 million in adjusted EBITDA and $4.1 million in revenue from staking yields, underscoring that core operations remain cash positive.
Management highlighted the strategic value of the deal, noting that “Karus’s AI models are bringing the pricing and management of loan‑level risk and cash flows into the future.” The company projects that for every $100 million deployed in Karus‑enabled assets, it could generate $9–12 million of adjusted EBITDA, a margin that could significantly boost ETHZilla’s profitability once the tokenized portfolios launch.
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