Tron to Go Public in the US, Copying Strategy’s Playbook, But with TRX Bet

Tron blockchain, founded by crypto entrepreneur Justin Sun in 2017, is ready to go public in the United States. However, it will avoid a traditional initial public offering (IPO) thanks to a planned merger with a small company that is already listed on the Nasdaq exchange.

SRM Entertainment produces toys and souvenirs, but after the upcoming merger with Tron, it will rebrand as Tron Inc. to give up on producing toys and move on to the new role as a publicly traded platform focused on Tron’s cryptocurrency ecosystem.

Tron to go public, copying Strategy, but using TRX, not BTC

The main condition of the transaction which lies at the core of the deal is SRM’s agreement to acquire $100 million worth of TRX tokens and include them into its broader project of accumulating $210 million in TRX for its future crypto-backed strategy similar to the path taken by Michael Saylor’s Strategy firm (formerly known as Microstrategy). Tron Inc. will issue preferred shares and warrants to raise capital, which will fuel the company. Instead of Bitcoin, as is the case with Strategy, Tron Inc. will be virtually putting its own TRX tokens into its treasury, placing a large bet on them.

This happened four months after the new SEC chairman, Paul Atkins, who praised DeFi in his recent speech, agreed to put a fraud scrutiny on several of Sun’s companies on hold.

The merger deal will be orchestrated by Dominari Securities, a private investment bank linked to Donald Trump’s family and having Donald Trump Jr. and Eric Trump on its advisory board. The company will act as the exclusive agent for the SRM token investment, according to the Financial Times article.

In February this year, the common stock of Dominary spiked by 580% within six weeks before the official announcement of Trump Jr. and Eric Trump joining the company’s board, which was a distinct sign of the market’s attention to this remarkable event.

This merger move reflects the broader trend with public companies that are putting focus on crypto, especially on Bitcoin, such as Strategy, Metaplanet, and others, which hold BTC as core assets on their balance sheets.

Eric Trump denies involvement with Tron Inc.

SRM will allow Tron to avoid the traditional IPO scheme by joining forces with an existing public company. Justin Sun will join the newly formed Tron Inc. as an adviser. According to the SRM’s management board, the TRX purchase agreement is an integral part of their strategy to bring together blockchain and crypto-based infrastructure to offer more value to shareholders.

Once the news about the upcoming Tron and SRM Entertainment merger came out, SRM’s share price exploded, rising as high as 647% within a single trading day, showing that investors decided to bet on Tron Inc. setting its foot on the American ground and the potential value of its future TRX reserve.

The involvement of Trump’s family with the intermediary in the aforementioned deal, Dominari Securities, has drawn significant public attention. Citing an unnamed source, the Financial Times alleged that Eric Trump would be taking a formal role at Tron Inc.

However, he rushed to reject that allegation on his X page, stating that he respected Justin Sun as a friend and a big figure in the crypto space. However, he denied taking any formal role at the Tron Inc. venture.

Eric Trump’s tweet stated: 

“I’m the biggest fan of Tron and love @justinsuntron — he is a great friend and an icon in the crypto space. That said the below is inaccurate — I don’t have public involvement.”

Still, many X users expressed their doubts in the comments that Eric Trump will not have any involvement at all, asserting that if it’s not “public involvement”, then, perhaps, a private one would take place, which may mean personal and advisory ties to this remarkable deal.

Justin Sun steps deeper into Trump’s business universe

Lately, the Tron founder, Justin Sun, has been actively deepening his connection to the Trump business universe. He has invested $75 million in Trump’s World Liberty Financial DeFi venture. He also spent approximately $20 million on buying millions of TRUMP meme coins through private sales.

This allowed Sun to attend an exclusive dinner for TRUMP holders organized by the US president, who granted his presence to the largest investors in his meme coin.

Still, the Tron founder has used similar tactics before, when he paid around $4.6 million in 2019 to win a chance to attend a private lunch with the legend of the investment world, Warren Buffett. The bid was paid to his wife’s charity fund, making Sun the highest bidder. He was allowed to bring along several friends to the lunch, so he invited a dozen bigwigs from the crypto space, including the CEO of eToro and the founder of Litecoin, Charlie Lee. During lunch, Sun tried to convert Buffett, who is a renowned Bitcoin critic, into a crypto supporter, but he did not succeed.

Still, it all depends on whether the SEC will eventually choose to proclaim TRX to be a security or not. If the former happens, Sun’s Tron Inc. in the US will face significant regulatory and compliance challenges. However, considering the fact that Sun has become close to Trump’s family and the pro-crypto position of the SEC’s chairman, odds are that Justin Sun is likely to avoid troubles with the US regulator. Investors around the world are now closely following any new developments in this case.