A bit-known tech firm with ties to China is pledging as much as $300 million to buy Bitcoin and the Trump-themed memecoin TRUMP, based on a Might 11 submitting with the US Securities and Change Fee.
The transfer instantly raised alarms over potential conflicts of curiosity and regulatory gaps, because it may enrich the Trump household. On the similar time, the president is contemplating whether or not to ban TikTok within the US.
It additionally comes simply weeks after the president was criticized for internet hosting a gala dinner for the highest 200 TRUMP holders and providing a gathering with the president for the highest 25 holders.
The announcement got here from GD Tradition Group, a Nasdaq-listed agency with simply eight workers and no recorded income final 12 months. The corporate claims to function an e-commerce platform through TikTok, however seems to be shifting technique.
In a latest submitting, GDC mentioned it plans to allocate its funds to Bitcoin and TRUMP utilizing proceeds from a personal inventory placement to an unnamed entity based mostly within the British Virgin Islands, a jurisdiction identified for its secrecy and favorable tax standing.
Turning a penny inventory right into a crypto whale
Till now, GD Tradition Group has had a minimal public footprint. Its operations in China and reliance on a Chinese language-owned platform like TikTok gave it little visibility in Western capital markets. However that modified dramatically when it revealed plans to lift a whole lot of thousands and thousands of {dollars} via a two‑12 months “fairness line” (additionally known as a dedicated‑fairness facility) with a single accredited investor.
Every time the corporate chooses, it might ship the investor a Buy Discover telling the investor to purchase newly issued GDC widespread shares. Money from these share gross sales, as much as $300 million, would be the supply of funds.
The investor can by no means maintain greater than 4.99 % of the excellent shares (with an choice to carry to 9.99 % with 61 days’ discover). Till shareholders approve extra, GDC might not situation greater than 3,357,407 shares (19.99 % of the present float), the “Change Cap.”
On the $0.44 flooring value, elevating the complete $300 million would require ~682 million new shares, way over the present 16.8 million excellent and effectively above the 19.99 % Change Cap.
Subsequently, except GDC’s inventory value rises sharply or shareholders vote to waive the cap, the corporate can’t instantly faucet your complete $300 million.
Ought to the transaction proceed as filed, GDC’s belongings may balloon from simply $14 million on the finish of 2024 to doubtlessly greater than $300 million. It might additionally place the agency as one of many largest holders of the TRUMP token, a memecoin launched earlier this 12 months that has funneled greater than $320 million in charges to entities related to Donald Trump and his household.
Politics, crypto, and TikTok in the identical body
The timing of the transfer is particularly contentious. Lawmakers in Washington are debating a proposed ban on TikTok, citing nationwide safety issues over its Chinese language possession. President Trump has expressed help for a deal permitting the platform to proceed working within the US, a place at odds with many in Congress.
GD Tradition Group’s announcement instantly intersects with this coverage debate. Ethics consultants argue that any monetary acquire for the Trump household linked to such a call would characterize an obvious battle of curiosity.
The agency’s newfound crypto technique echoes the playbook of Technique (previously MicroStrategy), the software program firm turned Bitcoin mega-holder beneath Michael Saylor. Nevertheless, whereas Technique is a worthwhile enterprise with an extended monitor report, GDC has no income and little public accountability.
Nonetheless, in February, the SEC issued a employees assertion about memecoins not being unregistered securities, commenting,
“It’s the Division’s view that transactions within the kinds of meme cash described on this assertion, don’t contain the supply and sale of securities beneath the federal securities legal guidelines.”
Questions linger, markets reply
Regardless of the announcement’s headline-grabbing nature, the precise logistics of the funding stay opaque. The corporate has not offered a timeline for the purchases, any escrow protections, or the id of the personal investor, elevating the chance that the transfer is extra symbolic than substantive.
Nonetheless, the TRUMP token has surged in exercise, with over 287 on-chain holders and powerful buying and selling quantity. A $300 million infusion may considerably impression the token’s liquidity and valuation, particularly if the client enters the market aggressively.
Nevertheless, your complete funds is unlikely to be allotted to TRUMP alone, and the share earmarked for Bitcoin may have much less dramatic results, given the dimensions and maturity of that market.
Whether or not this guess pays off for GD Tradition Group or the Trump household might rely as a lot on Washington’s selections on the ethics of president-owned memecoins.
With digital belongings within the highlight, this unlikely marriage of a Chinese language-linked TikTok participant and a MAGA-themed memecoin in every other 12 months would turn out to be considered one of 2025’s strangest monetary storylines.
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