Latest news with #JustinSun
Coin Geek
6 hours ago
- Business
- Coin Geek
TRON eyes IPO: Justin Sun bets on crypto treasury strategy
Getting your Trinity Audio player ready... On the heels of Circle's relatively successful initial public offering (IPO), it didn't take long for another crypto company to step up to the plate and announce its plans to go public on the United States stock market. This time around, Justin Sun, the founder of TRON, announced he would be taking TRON public through a reverse merger with Nasdaq-listed SRM Entertainment ($SRM) (NASDAQ: SRM). Once the deal is complete, SRM Entertainment will change its name to TRON, and its business model/strategy will switch to the relatively new, increasingly popular business model of owning and operating a crypto treasury. Once finalized, the company will buy and hold the TRON token. To kickstart the treasury, the newly formed company plans to issue 100,000 shares of its Series B Convertible Preferred Stock, which can be converted into 200 million shares of common stock at 50 cents per share. Additionally, the company will issue 220 million warrants, allowing SRM to acquire up to 220 million shares of common stock at an exercise price of 50 cents per share. If fully exercised, the company will take in $210 million which they will then use to buy TRON and begin building their treasury. Why public companies are racing to build crypto treasuries Recently, it has become increasingly popular for publicly traded companies to build crypto treasuries. Trump Media & Technology Group (NASDAQ: DJT), GameStop (NASDAQ: GME), and, of course, MicroStrategy (NASDAQ: MSTR) have all either announced that they are beginning to build or continuing to top up their Bitcoin treasuries. There are various reasons a company might want to build a crypto treasury. Some argue it's a hedge against inflation. Others say it aligns with their company's values of being tech-forward and innovative. But regardless of what the companies are telling the public, no company would be doing this if it didn't believe it would be good for its bottom line. The obvious economic benefit of a crypto treasury is that the price of the cryptocurrency it holds could appreciate, increasing its overall value and making the company richer. But so far, there has been a secondary effect that has been even more beneficial than crypto-price appreciation. When companies announce they're building or topping up crypto treasuries, they start getting media attention. Once the headlines roll in, the company's stock price usually climbs. Most of the time, the price of the crypto asset they're buying increases too. Although both the stock and the crypto asset rise, historically this strategy, and the media attention that comes with it, has been more beneficial for the company's stock price than it has for the underlying digital asset itself. TRON, which hasn't completed its merger with SRM yet, is a perfect example. When the company announced its plans to merge and build a TRON treasury, the price of $SRM increased by over 500%, while the price of the TRON token increased by just 3.4%. Why crypto treasuries are a double-edged sword Admittedly, these crypto treasuries are a unique feat of financial engineering. The companies that own and operate them have found a way to pump their bags, and essentially double-dip on revenue generation since their stock price and crypto treasury rise when they announce that they're adding to their treasury. But we haven't really seen this play out in the long term; just like there are supporters of the crypto treasury model, there are critics who have been scrutinizing the strategy since August 2020, when MicroStrategy became the first publicly traded company to add cryptocurrency to its corporate treasury. Cryptocurrencies are notorious for their volatility. When a publicly traded company builds a crypto treasury on top of its other business activities (if it even has other business activities), shareholders are suddenly exposed to cryptocurrency price swings. Depending on the size of the crypto treasury, this can put companies at significant risk. When times are good, they'll thrive. But when the market takes a downturn, it's possible for these companies to incur substantial losses that harm the financial health of the business, all thanks to their crypto treasury. For instance, earlier this year, MicroStrategy reported an unrealized loss of $5.91 billion due to a drop in BTC's price. If a smaller company follows this strategy and gets caught on the wrong side of a price swing, it could result in them having to close shop. All of this raises the question: Are crypto treasuries sustainable on a long enough time horizon? The answer is, we don't know yet. The oldest crypto treasury from a publicly traded company, MicroStrategy, is approaching five years old. Although it's previously reported unrealized losses, the treasury still exists, it's still being topped up, and MicroStrategy is still afloat. At the same time, the economics of a company whose sole 'product' is a crypto treasury don't look great. When a company isn't creating anything of value, anything that solves a real problem in the world, and therefore isn't generating customer demand or building a reliable customer base, the entire business model becomes shaky. The 'value' of the company is reduced to one speculative idea: that it'll be worth more tomorrow because the crypto they're holding is expected to go up. These flawed economics put companies with crypto treasuries—especially those whose only product is the treasury itself—at extreme risk. They are essentially living and dying by the price of the crypto they're accumulating. Tesla sold its BTC; what happens when others do? One thing we've seen very little of is companies expressing their exit strategy. Every company undoubtedly views its crypto treasury strategy as profitable—but unless they one day exit the position, that profit will never be realized. Only one publicly traded company has explicitly accumulated Bitcoin for their crypto treasury and then subsequently sold it for a realized revenue. On March 31, 2021, Tesla (NASDAQ: TSLA) sold ~4,320 BTC, representing roughly 10% of its holdings, generating about $272 million, and then, a little more than one year later, in July of 2022, Tesla sold approximately 75% of its remaining BTC and argued that they did this to prove the liquidity of BTC as an alternative to holding cash, essentially testing that BTC was a fully functional treasury asset. Whatever the reason may be, you'd imagine that companies are stockpiling crypto to one day sell it, which in and of itself could unwind the entire financial engineering play. If a company sells a large chunk of its treasury, that could cause the price of the crypto asset to fall, which then reduces the overall value of the remaining treasury. That decline could impact the company's perceived value and hurt the stock price, triggering a negative spiral that reverses all the gains that made the strategy so attractive in the first place. There still isn't enough data to know how this plays out. Only a handful of companies have tried the publicly traded crypto treasury model, and even fewer have liquidated their positions, which makes it hard, and arguably too early, to call the crypto treasury a winning strategy. As more time passes and the price of BTC continues to move, we'll find out whether this strategy truly is a feat of financial engineering or if it's just another buzzword financial gimmick. Watch: Teranode & the Web3 world with edge-to-edge electronic value system title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Yahoo
6 hours ago
- Business
- Yahoo
Coinbase, Circle, SRM lead stock rally as Trump cheers GENIUS Act in another dream week for crypto
It was another dream week for the crypto world. Here's what happened. A few days back, the Senate passed a bill that would establish a federal framework for dollar-backed cryptocurrencies known as stablecoins. While this bill, known as the GENIUS Act, still needs approval from the House and President Trump, its swift progress has already been lauded by the crypto industry as a major step toward opening the doors for stablecoins to be used more widely in traditional financial services. Meanwhile, shares of Circle (CRCL), issuer of the world's second-largest stablecoin (USDC), is up more than 77% through the week. In total, the stock is up more than seven times its initial June 5 IPO price. Major US crypto exchange and crucial Circle partner Coinbase Global (COIN) has also ridden the wave, climbing more than 25% through the week. Coinbase owns a minority stake in Circle and also earns a share of revenue from Circle's USDC. Read more: Can you buy crypto with a credit card? But nothing compares to the weekly rise of little-known Winter Park, Fla.-based theme park and entertainment industry merchandiser SRM Entertainment (SRM), which is up roughly 777% since announcing on June 16 that it had struck a deal with crypto platform Tron to begin purchasing Tron tokens, rename itself Tron Inc., and bring on Tron founder Justin Sun as an adviser. President Trump joined the fun too. A day after the GENIUS Act passed in Congress's upper chamber by a vote of 68-30, the president, in a post, called the legislation 'an incredible Bill that is going to make America the UNDISPUTED Leader in Digital Assets.' No secret why the president is so cheery. As the crypto world has been racking up wins in Washington this year, Trump and his family have deepened their ties with the industry. (See chart below.) Corporations tied to Trump or his family have ventured into everything from issuing memecoins and dollar-backed stablecoins to mining bitcoin. After announcing a $2.5 billion fundraise to purchase cryptocurrencies, Trump Media and Technology Group (DJT) was declared effective a week ago by the SEC to issue equity and debt to begin buying and holding bitcoin. In an updated financial disclosure published a week ago, the president reported earning $57 million last year from his ownership of tokens tied to World Liberty Financial, a decentralized finance project that lists him and his sons as advisers. Led by CEO Zach Witkoff, son of Steve Witkoff, the president's envoy to the Middle East, that same venture launched a stablecoin earlier this year that was chosen as the payment method for UAE sovereign wealth fund MGX to deliver $2 billion in fundraising to crypto exchange Binance. Its founder, Changpeng Zhao, has been seeking a pardon, according to a Wall Street Journal report. Earlier this month, the SEC announced the dismissal of an ongoing civil enforcement action against Binance entities and Zhao filed in June 2023 that alleged securities violations. Tron founder Sun is also a big backer of two crypto ventures tied to the president. As the largest holder of Trump's memecoin, Sun attended an exclusive dinner hosted at Trump's Virginia golf course last month. Before that, he poured $75 million into World Liberty tokens. Crypto's success in D.C., with President Trump and the passage of the GENIUS Act, has been cheered in the crypto world as a 'watershed moment that signals digital assets are now a part of the financial fabric,' said Yat Siu, executive chairman of Hong Kong-based crypto developer and venture firm Animoca Brands. 'The bill's bipartisan support gives stablecoin issuers, including banks, tech, and gaming companies, the green light to innovate within a clear regulatory framework.' The Trump administration has been telegraphing its desire to see the stablecoin market grow. Last week, Treasury Secretary Scott Bessent told lawmakers that this legislation could help push the US stablecoin market beyond $2 trillion by the end of 2028. Because the GENIUS Act requires companies issuing stablecoins to hold $1 in cash or short-term US Treasurys for every $1 in stablecoins they give out, the stablecoin market's growth is expected to mean more demand for US debt obligations. Recent analyst estimates from Standard Chartered and Morgan Stanley put the stablecoin market's current US Treasury holdings between $166 billion and just under $200 billion. But the bill was not without some criticism. Some Democrats, including Sen. Elizabeth Warren, have expressed their frustration with their inability to get through amendments to the bill that would bolster consumer protections — and specifically bar the president and his family from having ties to businesses that would benefit from the legislation. "The GENIUS Act has a major loophole allowing Big Tech companies and major retailers to issue their own private currencies structured as stablecoins," Warren said ahead of the bill's passage. "This bill shouldn't pass without amendments preventing these risks," she added. David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Newsweek
a day ago
- Business
- Newsweek
Barron Trump's Crypto Investor Nears Cash Bonanza
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Crypto billionaire Justin Sun is taking his company, TRON, public on the U.S. market, in a deal worth as much as $210 million. The top Trump investor, who has a $75-million stake in the first family's crypto bank World Liberty Financial, announced the reverse merger with merchandise supplier SRM Entertainment on Monday. Newsweek has contacted SRM Entertainment via email for comment. The Context Sun has been a vocal backer of the Trump administration's cryptocurrency embrace, and has invested heavily in World Liberty Financial, the Trump family's crypto venture that lists Barron Trump as one of its ambassadors, alongside Eric and Donald Jr, despite the age difference of almost three decades between the half-brothers. What To Know President Donald Trump has long touted Barron, his youngest child, as the family's cryptocurrency expert, saying: "He knows so much about this" during an interview last year. Barron Trump has reportedly earned nearly $40 million from cryptocurrency ventures and has multiple "wallets," a kind of portfolio used to manage blockchain transactions. This would make him the richest of any of Trump's sons at the age of 19. Barron's position at World Liberty Financial, where he ranks the same as other members of his family, is his first big foray into the business world. Barron is currently enrolled in New York University's Stern School of Business, where fees set students back $99,000 per year, which indicates he intends to follow his father into the same business background which made the Trump name. The merger appears to be taking formalizing ties between Sun and the Trump family one step further, with the Financial Times reporting that Eric Trump is expected to take up a role in the new company, which will rebrand to Tron Inc. However, in statement on X, formerly Twitter, Eric Trump rejected the report, saying: "I'm the biggest fan of Tron and love Justin Sun—he is a great friend and an icon in the crypto space. That said, the below is inaccurate—I don't have public involvement." Shortly after the merger was reported, shares in SRM Entertainment, a Nasdaq-listed company, soared by as high as 647 percent. The company's market cap was $146.24 million at time of writing. CEO of TRON Justin Sun attends Consensus 2019 at the Hilton Midtown on May 15, 2019, in New York City. CEO of TRON Justin Sun attends Consensus 2019 at the Hilton Midtown on May 15, 2019, in New York City. Getty Images The merger will involve TRON injecting $210 million of crypto assets into the newly-formed Tron Inc, with SRM's statement on the deal reading: "The strategic investment, valued at $210,000,000 upon full exercise of the warrants, enables SRM to build a substantial TRON Treasury Strategy. "This transaction aligns with the company's vision of creating long-term value for shareholders by capitalizing on the global adoption of blockchain and digital innovation. As a part of its TRON Treasury Strategy, the company intends to implement a dividend policy upon the successful implementation of the TRX staking program." TRON was founded in 2017 to manage the blockchain of the same name. Sun, the company's founder, was previously charged with securities fraud by the SEC, before the charges were dropped after Trump entered office in January. A blockchain is a digital, decentralized, and distributed ledger, like a spreadsheet, that records transactions across a number of computers. What People Are Saying Justin Sun, founder of TRON, said in a statement on the merger: "Stablecoins and blockchain are revolutionizing global payments, enabling faster, cheaper, and more transparent transactions. "With over 310 million international user accounts and average daily transactions YTD [year to date] exceeding $20 billion, TRON strives to be the protocol of choice for onchain settlement serving the mass populations worldwide." Rich Miller, SRM Entertainment's CEO, said: "As blockchain technology gains wider adoption globally, TRON has become the industry leader for cross-border settlement in U.S. dollar stablecoin. We are excited to invest into the future of the world's next generation financial infrastructure." What Happens Next The reverse merger is set to take place over the next few months.
Yahoo
2 days ago
- Business
- Yahoo
Tron Inc. Deal Gives Justin Sun's Father Control of Public Firm Via $100M Token Deal
A Securities and Exchange Commission (SEC) filing posted Monday night outlines the relationship between Tron DAO, Justin Sun, and SRM Entertainment, a Nevada company in the process of changing its name to Tron Inc. The filing details a $100 million private investment in public equity (PIPE) deal, paid entirely in TRX TRX tokens, that gives Sun's father, Weike Sun, board control and positions Tron-aligned advisors in key governance roles. Weike was named chairman, while Zhihong Liu, also known as Steve Liu, a strategic adviser to Tron DAO and the CEO of stablecoin issuer Techteryx, and Zi Yang, a senior executive at Tronscan, joined the board's audit, compensation, and nominating committees, according to the filing. The deal was structured as a private investment in public equity (PIPE) deal. An investment vehicle owned by Weike purchased 100,000 shares of SRM Series B preferred Stock via TRX tokens, convertible into 200 million common shares, and received 220 million warrants at a strike price of $0.50. Despite the appearance of alignment, Tron DAO has no direct investment, governance rights, or formal role in the SRM deal, said Liu. "Tron DAO is not really any part of the deal for SRM. It's more of the senior Sun's transaction." The DAO itself is not mentioned in the 8K filing either. Its influence appears to be indirect, reflected through the backgrounds of newly appointed board members tied to the Tron ecosystem. According to the Financial Times, the renamed firm plans to buy and hold up to $210 million worth of TRX, similar to how MicroStrategy built a bitcoin-based corporate treasury. The deal was arranged by Dominari Securities, a brokerage affiliated with Dominari Holdings, whose advisory board includes Donald Trump Jr. and Eric Trump and is located within Trump Tower in Manhattan. Dominari Securities was paid $50,000 for the counsel for the transaction, according to the 8K filing. SRM, the listed Tron entity, is down 15%, trading at $7.73 as the market closed in New York. The TRX token is down 2.5%, trading at $0.27. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Arabian Post
2 days ago
- Business
- Arabian Post
FalconX Prepares for Market Debut Amid Crypto IPO Surge
FalconX, a leading cryptocurrency prime brokerage, has initiated informal talks with bankers and advisers to explore an initial public offering in 2025, signalling a significant move to satisfy burgeoning institutional demand for digital assets. The firm, which last raised $150 million in 2022 at an $8 billion valuation, is not yet retaining an underwriter—an early but strategic step toward going public. Founded in 2018, FalconX began as a crypto-focused prime broker, enabling clients to trade directly on exchanges. Today it spans three verticals—markets, custody and staking, and direct market access prime brokerage—positioning itself as a full-spectrum financial services provider for institutional clients. This evolution reflects growing investor interest in digital assets and the firm's expansion through deals and strategic integration. In early 2025, FalconX acquired Arbelos Markets, marking its entry into the derivatives segment, a lucrative but highly competitive space. It also forges partnerships with established players such as Standard Chartered, integrating global banking and foreign-exchange capabilities, and with Cantor Fitzgerald, accessing a credit facility collateralised by Bitcoin—its 'first step in a broader credit framework' to bolster institutional offerings. ADVERTISEMENT The broader crypto sector is experiencing an IPO wave. Several digital-asset platforms, including Fold, Exodus and eToro, have listed in 2025. Notably, stablecoin issuer Circle achieved a landmark $1.1 billion IPO on 5 June, marking the largest crypto-market debut in history and fuelling expectations of further listings. Following Circle's success, firms such as Bullish and Gemini filed for public listings, with Kraken and Justin Sun's Tron Group also preparing filings. Amid this sector-wide momentum, FalconX is working to enhance its public profile, seeking to craft a compelling narrative ahead of a potential IPO. The firm's strategy, according to one insider, emphasises readiness to appeal to public-market investors, including both strategic partnerships and public relations positioning. The firm's track record underpins its IPO ambition. In June 2022, it secured a $150 million Series D led by Singapore's GIC and B Capital at an $8 billion valuation. That round also involved Thoma Bravo, Wellington Management, Adams Street Partners and Tiger Global Management. CEO Raghu Yarlagadda emphasised FalconX's market‑neutral model, rigorous risk‑management and profitability amid volatility—a rarity in the crypto space. With over $430 million in capital raised to date, FalconX has demonstrated resilience, continuing to hire and expand services even as competitors retrench. GIC's commitment and the firm's strategic posture reflect stable investor confidence. Institutional demand for crypto is rapidly growing, and FalconX's moves align with this shift. The acquisition of Arbelos, banking collaboration and credit facility signal a broader ambition to integrate traditional and digital finance infrastructures, broaden offerings and close service gaps. As co-head of markets Joshua Lim observed, strategic partnerships and acquisitions enable FalconX to fill missing links that would otherwise force customers to assemble services piecemeal. Within this context, launching an IPO emerges as both a capital‑raising tool and a visibility lever. As one adviser noted, 'When you launch an IPO, you need to have a story…. You're selling yourself to the investing public'. FalconX's groundwork suggests readiness to craft that narrative, aligning with its strong financial position and strategic trajectory.
