Justin Sun's Tron to test public stock appetite for edgier crypto
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Allie Carl/Axios
Supporters of the Tron blockchain, the $26 billion network founded by Justin Sun, the crypto billionaire who ate the multi-million dollar banana, looks set to take over a public company in the U.S.
Why it matters: Tron is a top-10 blockchain, but it's a project that — like its founder — has been mired in controversy, making it an awkward target for mixing into traditional portfolios.
Catch up quick: Tron is set to go public via a reverse merger with Nasdaq-listed SRM Entertainment, a small merchandising company.
- SRM will change its name to Tron, Inc, and has inked a deal to raise $100 million from a private investor, which it will use to buy Tron's token to park in its treasury, the company said Monday.
- Sun has also signed an advisory agreement with the new firm.
Between the lines: Sun seems to be following the trend of crypto asset treasury companies using public equity markets to support the long-term value of a crypto asset.
- Many companies this year have begun emulating Strategy, Inc.'s long standing bitcoin acquisition approach, using leverage to increase crypto holdings per share of an underlying stock over time.
Yes, but: Sun is one of the most divisive figures in the cryptocurrency industry, one who has been known for jumping on every trend that starts to make money in the space, from DeFi to NFTs to algorithmic stablecoins.
- He also has a contentious history with U.S. regulators, and more recently, has made very public moves to cozy up to the Trump administration.
Flashback: Sun and Tron were under investigation by the SEC since 2023, until the suit went on pause back in February. Unlike many of the cases brought by the Biden-era leadership of the agency, this case included serious allegations of market manipulation.
- Shortly after the election, Sun invested $75 million in a token issued by Trump linked company World Liberty Financial.
- He was also the #1 holder of the Official Trump meme coin going into the private dinner with the president.
Friction point: The proximity of the investments and the SEC's decision to halt Sun's case has sparked questions from Democratic lawmakers.
- Spokespeople for the Tron Network did not reply to a request for comment.
The intrigue: The Tron deal was arranged by Dominari Holdings, a company that counted Donald Trump Jr. and Eric Trump as two of its largest shareholders as of April 15.
- Dominari also backed American Bitcoin, the bitcoin mining venture led by the two Trump brothers.
- So the SRM/Tron deal raised a lot of eyebrows this week when the Financial Times reported that Eric Trump would have a role in the new venture.
- He denied it on X.
What we're watching: Tron's profile is likely to heighten in coming years — it's one of the most popular platforms for transacting in stablecoins, representing an estimated 61% of all payments made on chain with stablecoins.
- SRM's share price has jumped over 400% since the deal was announced, giving it a $130 million market cap.
- Tron's coin-of-the realm, TRX, has barely moved.
