After selling off a significant portion of its crypto stash over the past few months, Ethereum-focused treasury firm ETHZilla has added a jet engine to its balance sheet.
The company, through its newly formed subsidiary ETHZilla Aerospace LLC, purchased two CFM56-7B24 aircraft engines for $12.2 million, according to a Friday filing with the U.S. Securities and Exchange Commission.
The engine is currently leased to a major airline, and ETHZilla asked Aero Engine Solutions to manage it in exchange for a monthly fee, according to the documents. The agreement includes a buy-sell option agreement, which allows either party to request the other party to buy or sell the engine for $3 million each upon the expiration of the lease term, subject to the engine being in suitable condition.
This move may sound strange, but Ethereum Finance companies buying jet engines and leasing them to aircraft operators is part of normal aerospace business outside of the crypto world.
Airlines lease jet engines as spares so that if the main engine fails, the aircraft can continue to fly uninterrupted. Companies such as AerCap, Willis Lease Finance Corporation, and SMBC Aero Engine Lease operate in this space.
The aerospace business is also currently facing a tight supply of large engines, with IATA saying airline members will be forced to pay around $2.6 billion to lease additional spare engines in 2025. In fact, the global aircraft engine leasing market is expected to grow from $11.17 billion in 2025 to $15.56 billion by 2031 at a CAGR of 5.68%, according to TechSci Research.
Tokenization pivot
The bizarre ploy comes as digital assets government bonds face increasing pressure amid a slide in crypto markets over the past few months.
Many publicly traded companies that aggressively raised funds to accumulate tokens last year are now trading well below the net asset value (NAV) of their crypto assets on their books, leaving little room to raise new capital.
ETHZilla itself previously sold $40 million Ethereum In October, the company funded its share buyback program and in December set aside another $74.5 million to retire outstanding debt. Meanwhile, the company’s stock price has fallen about 97% from its August high.
Still, the aircraft engine purchase could be part of ETHZilla’s broader ambitions to bring tokenized real-world assets (RWA) on-chain.
In a letter to shareholders in December, the company outlined plans to tokenize its assets in partnership with Liquidity.io, a regulated broker-dealer and SEC-registered alternative trading system (ATS). Prior to that, ETHZilla acquired a 15% stake in Zippy, a lender focused on manufactured mortgage loans, with plans to tokenize these loans as compliant tradable products. It also acquired a stake in Karus, an auto financing platform, and plans to offer loans on-chain.
“We are building a scalable tokenization pipeline across asset classes with predictable cash flows and global investor demand,” the company said in an X post on Wednesday. The company plans to list its first tokenized asset product in the first quarter of this year.
