Faraday Decouples Crypto Volatility from EVs to Attract Diverse Investors

Faraday Future Intelligent Electric (NASDAQ: FFAI) has announced a strategic restructuring of its cryptocurrency holdings through the creation of a new, separately listed entity called CXC10. The spin-off, approved by the company’s board, aims to isolate its “crypto flywheel” assets—including the C10 Treasury, digital asset holdings, and Web3 initiatives—from its core electric vehicle (EV) operations. This move is designed to provide clearer investor visibility for both businesses while enabling distinct capital-raising strategies tailored to their respective risk profilestitle1^[1]. The separation is expected to be finalized by September 19, 2025, during the company’s “919 Futurist Day & Stockholders’ Community Day” eventtitle2^[2].

The C10 Treasury, a cornerstone of the spin-off, has allocated approximately $10 million in crypto assets to date. According to management, the portfolio has outperformed a benchmark index, with its 20% actively managed allocation generating unrealized gains exceeding the broader C10 Index. Four core selections within this active allocation have individually outperformed the index as of September 12, 2025title2^[2]. However, audited financials for the C10 Treasury remain pending, and the entity’s current scale is modest compared to the company’s long-term ambitions to scale into a broader Web3 ecosystem.

The spin-off addresses key investor concerns by decoupling the high-volatility crypto assets from Faraday’s EV business, which is yet to turn a profit. The EV segment, which includes the FF 91 and upcoming FX Super One models, is projected to begin revenue generation by late 2025. By separating the two entities, the company aims to reduce the “conglomerate discount” often applied to diversified firms with mixed risk profiles. For CXC10, the standalone listing could allow it to capitalize on the current bullish crypto market, potentially fetching premium valuations aligned with Web3 sector trendstitle1^[1].

Strategic rationale for the spin-off includes operational clarity and regulatory preparedness. CXC10 will operate under its own governance and compliance structures, a critical consideration given the evolving regulatory landscape for crypto assets. The company also emphasized that the separation would enable the EV team to focus on production milestones and market expansion without the distraction of crypto-related volatility. Founder and Co-CEO Jia Yueting highlighted that CXC10’s independent fundraising capacity would prevent further dilution of FFAI shareholders while attracting investors specifically aligned with Web3 risk-return profilestitle2^[2].

Market reactions to the spin-off have been mixed. While analysts acknowledge the potential for value unlocking through business segmentation, they caution about execution risks. CXC10’s small asset base and lack of audited financials raise questions about its ability to scale into a leading Web3 entity. Additionally, historical precedents, such as Long Island Iced Tea’s failed blockchain rebrand, underscore the regulatory challenges of sudden crypto pivotstitle3^[3]. Despite these concerns, Faraday’s management remains optimistic, citing Bitcoin’s 14.67% 90-day gain and Ethereum’s 106.19% surge over the same period as indicators of a favorable market environmenttitle4^[4].

The spin-off is part of a broader $41 million investment strategy involving Qualigen Therapeutics, which is being rebranded as CXC10. This includes a $30 million private investment in public equity (PIPE) transaction and a $4 million personal contribution from Jia Yueting, who will serve as CXC10’s chief advisortitle5^[5]. The company has also begun recruiting blockchain talent and engaging with potential strategic partners to bolster its Web3 ambitions.