Trump’s Crypto Cash Grabs Are Getting Weirder

Photo: Al Drago/Bloomberg/Getty Images

Since the beginning of his second administration, Donald Trump has been pursuing opportunities to make a quick buck in cryptocurrency at nearly every chance he can get. He and his team have already taken care of the obvious stuff, like meme coins and stablecoins and Trump-branded exchange-traded funds, which have earned him billions. So to keep the good times rolling, the Trump crypto brain trust needed to get more creative. On Tuesday, Trump Media and Technology Group — a.k.a. the company behind Truth Social — announced they were doing just that.

The plan combines several popular ideas in cryptocurrency right now, beginning with a special-purpose acquisition company — a way to take a company public without the protections of a traditional IPO. Trump Media is going to team up with a blank-check company called Yorkville Acquisition Corp. to launch a new firm called Trump Media Group CRO Strategy, Inc. This tongue-twister of a company will then focus on buying up as much of the cryptocurrency cronos as it can — a strategy known in the crypto world as a “strategic reserve” or a “treasury.”

You may be forgiven for not knowing cronos. It is not a benchmark cryptocurrency like bitcoin or ethereum or solana or anything else that your more financially cavalier family members have told you about. Cronos is the cryptocurrency of the exchange crypto.com, most famous for its 2022 Super Bowl crypto-bubble commercial with Matt Damon, and for owning the naming rights to the Los Angeles Lakers’ arena, and for losing a bunch of money after the collapse of Sam Bankman-Fried’s FTX.

After it goes public, Trump Media Group CRO Strategy, Inc. is going to buy up as much cronos as it can. Why? Over the past seven months, thanks to a white-hot crypto market buoyed by Trump’s friendly policies, the idea of a corporation buying cryptocurrency has, for now, become a good bet. The concept was championed by billionaire Michael Saylor and his firm Strategy, which owns more than 3 percent of all bitcoin in existence after a number of huge bitcoin purchases this spring. In Saylor’s wake, GameStop is now buying bitcoin. Cantor Fitzgerald is doing it, too. There is a company in Japan that used to run hotels that now just buys bitcoin.

Trump’s crypto team is also in the crypto treasury business, with World Liberty Financial buying up bitcoin and ethereum since February. But Trump’s decision to extend the treasury model to cronos, the 23rd largest token by market cap, is a new frontier in his crypto cash grabs. It is a Frankenstein’s monster of cryptocurrency ideas. A (poorly operating) social-media company is raising money to go public via a backdoor route, asking investors to give it cash so it can then buy a mid-tier cryptocurrency that those investors could just buy on their own.

So will it work? There are some long-term questions about the health of corporate crypto reserves; a business plan touted by its supporters as an “infinite money glitch” could be a disaster if the market were to cool off. But for now, it’s more money in the president’s wallet. The deal netted Trump Media $50 million in cash.