Trump Media makes another big crypto play in a $6.4 billion deal
In a separate partnership, Trump Media agreed to buy $105 million in CRO in exchange for Crypto.com’s purchase of $50 million Trump Media shares
Yuri Gripas/Abaca/Bloomberg via Getty Images
Trump Media is launching a digital asset treasury company to acquire the cryptocurrency token CRO in a new partnership with Yorkville Acquisition Corp. and Crypto.com.
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President Donald Trump is the majority owner of Trump Media, which owns and operates the social media platform Truth Social.
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The partners are putting about $6.4 billion into the Trump Media Group CRO Strategy, Inc., its new crypto company “focused on acquisition of the native cryptocurrency token of the Cronos ecosystem,” according to a statement released Tuesday. Cronos launched a partnership with Crypto.com in February.
This latest announcement of Trump Media’s crypto expansion isn't the president's first foray into crypto finance. In January, the president’s company launched its fintech platform Truth.Fi. At the time, Nunes said, “Truth.Fi is a natural expansion of the Truth Social movement” adding that making “American First investment vehicles” is another step to helping “American patriots” protect themselves from threats from “Big Tech and woke corporations.”
Trump also signed the GENIUS Act into law in July, which provides a framework for digital tokens backed by conventional assets such as Treasury bills or bank deposits. Then he signed an order to create a strategic Bitcoin reserve, though Treasury Secretary Scott Bessent revealed it would not be purchasing more of the digital asset than was already on hand.
The new Trump-backed treasury firm will partially be funded by an affiliate of Yorkville, YA II PN, Ltd., with a $5 billion equity line of credit. The rest of the company’s expected funding will come from $200 million in cash, $220 million in cash-in mandatory exercise warrants, and $1 billion in CRO, which it said represents 19% of CRO’s total market cap.
The group said that this investment would make it the “first and largest publicly traded CRO treasury company” and the “largest digital asset treasury company to market cap ratio in history.”
Trump Media and Crypto.com also announced a new partnership between the two on Tuesday in which Truth Social and Truth+ will offer a rewards system that uses Crypto.com’s digital wallet infrastructure and offers CRO as a utility token, a release said.
According to the agreement, Trump Media plans to buy about $105 million in CRO, which it said makes up about 2% of CRO’s total market cap. Crypto.com will buy $50 million shares of Trump Media’s common stock. The release said both entities are subject to a lockup period.
In the future, the two plan to let Truth Social users pay for subscriptions and services with their Crypto.com CRO balance. Plus users who open a Crypto.com account can get a free or discounted Truth+ subscription.
“As the first company to widely implement CRO across social media and TV streaming platforms, Trump Media is proud to be an early adopter of this best-in-class digital network,” Trump Media's CEO and chairman Devin Nunes said in the release.
CRO has shot up more than 26% in the last 24 hours. Trump Media’s stock has risen nearly 6.5% as of 1:15 p.m. Eastern on Tuesday.
The affiliate of Yorkville that is giving billions to the new crypto initiative is also entering a “backstop agreement” to buy Yorkville’s Class A ordinary shares “capped at no more than 9.9% of beneficial ownership of the shares.” The release also said that Yorkville will apply to change its Class A ordinary shares to trade under the symbol “MCGA” on Nasdaq. It said the symbol would then transfer to the newly formed crypto group.
The group said that all participating parties agreed to a “mandatory one-year initial lock-up period” on their shares followed by a “3-year restrictive release schedule.”