Chinese language-linked agency raises $300M from non-public investor to purchase TRUMP memecoin
A bit of-known tech firm with ties to China is pledging as much as $300 million to buy Bitcoin and the Trump-themed memecoin TRUMP, in keeping with a Might 11 submitting with the US Securities and Alternate Fee.
The transfer instantly raised alarms over potential conflicts of curiosity and regulatory gaps, because it might enrich the Trump household. On the identical 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 staff and no recorded income final 12 months. The corporate claims to function an e-commerce platform by way of TikTok, however seems to be shifting technique.
In a latest submitting, GDC stated it plans to allocate its finances to Bitcoin and TRUMP utilizing proceeds from a non-public inventory placement to an unnamed entity primarily based within the British Virgin Islands, a jurisdiction recognized 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 lots of of hundreds of thousands of {dollars} via a two‑12 months “fairness line” (additionally referred to as a dedicated‑fairness facility) with a single accredited investor.
Each time the corporate chooses, it could 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 elevate to 9.99 % with 61 days’ discover). Till shareholders approve extra, GDC could not difficulty greater than 3,357,407 shares (19.99 % of the present float), the “Alternate Cap.”
On the $0.44 flooring value, elevating the total $300 million would require ~682 million new shares, way over the present 16.8 million excellent and properly above the 19.99 % Alternate Cap.
Subsequently, except GDC’s inventory value rises sharply or shareholders vote to waive the cap, the corporate can’t instantly faucet the whole $300 million.
Ought to the transaction proceed as filed, GDC’s property might balloon from simply $14 million on the finish of 2024 to doubtlessly greater than $300 million. It will 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 very contentious. Lawmakers in Washington are debating a proposed ban on TikTok, citing nationwide safety considerations 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 specialists argue that any monetary achieve for the Trump household linked to such a choice 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 workers assertion about memecoins not being unregistered securities, commenting,
“It’s the Division’s view that transactions within the sorts of meme cash described on this assertion, don’t contain the provide 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 supplied a timeline for the purchases, any escrow protections, or the id of the non-public 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 might considerably affect the token’s liquidity and valuation, particularly if the customer enters the market aggressively.
Nevertheless, the whole finances is unlikely to be allotted to TRUMP alone, and the proportion earmarked for Bitcoin might have much less dramatic results, given the scale and maturity of that market.
Whether or not this wager pays off for GD Tradition Group or the Trump household could rely as a lot on Washington’s selections on the ethics of president-owned memecoins.
With digital property within the highlight, this unlikely marriage of a Chinese language-linked TikTok participant and a MAGA-themed memecoin in another 12 months would turn out to be one among 2025’s strangest monetary storylines.
