Trump Media signs deal with crypto trading platform
President Trump’s social media company has moved one step closer to transforming itself into a financial services firm that intends to market investment products, including crypto, to retail investors.
Trump Media & Technology Group, the parent company of Truth Social, which has become Mr. Trump’s main online megaphone, said on Tuesday that it had signed a binding agreement with a crypto trading platform and a newly created Florida investment firm to launch a series of exchange-traded funds, or E.T.F.s, by the end of the year.
The move to market E.T.F.s to investors is part of a strategy by Trump Media to generate a more reliable source of revenues after failing to attract sufficient advertising dollars to Truth Social.
In the deal, Trump Media will team up with Crypto.com, a digital asset trading platform with more than 140 million customers, and Yorkville America Digital, a company with ties to the founders of Yorkville Advisors, an investment firm based in Mountainside, N.J.
Davis Polk & Wardwell, a big New York law firm, will advise the parties in developing the investment products. Over the past month, Mr. Trump has been targeting some of the nation’s biggest law firms for failing to take on conservative clients, or for taking on clients with causes the president opposes.
“This agreement is a major step forward in diversifying TMTG into financial services and digital assets,” said Devin Nunes, Trump Media’s chief executive and a former California congressman.
Yorkville America Digital was incorporated in Florida this month and is affiliated with Yorkville America and has ties to Yorkville Advisors. Yorkville America and Yorkville Advisors, which specializes in investing in small publicly traded companies, have the same principals.
Last year, Trump Media entered into an “equity line of credit” with Yorkville, an arrangement in which the firm can acquire discounted shares of the company in return for cash. According to regulatory filings, Yorkville has acquired just over 17 million shares in Trump Media, as part of a long term financing arrangement. Republicans now hold a 3-to-1 majority on the commission.
Initially a crypto critic, Mr. Trump went on to fully embrace the industry during last year’s presidential campaign and vowed that his administration would take a more welcoming approach to digital assets than the Biden administration did.
One of the first things the S.E.C. After Mr. Trump’s return to office, the SEC dismissed a dozen lawsuits against crypto companies and closed pending investigations. On March 27, Crypto.com released a press release stating that the commission had informed it that an investigation into its activities had been closed. He owns 115 million shares or 53 percent of the company. Donald Jr. is a board member of Trump Media and his eldest child, Donald Trump, transferred the shares to a trust before his inauguration. That stake is currently worth about $2.7 billion.
Shares of Trump Media were up nearly 5 percent, to $23.59, in midday trading. The stock has fallen 31 percent in the past year.
