6 hours ago
A little-known tech institution with ties to China is pledging up to $300 cardinal to acquisition Bitcoin and the Trump-themed memecoin TRUMP, according to a May 11 filing with the US Securities and Exchange Commission.
The determination instantly raised alarms implicit imaginable conflicts of involvement and regulatory gaps, arsenic it could enrich the Trump family. At the aforesaid time, the president is considering whether to prohibition TikTok successful the US.
It besides comes conscionable weeks after the president was criticized for hosting a gala meal for the apical 200 TRUMP holders and offering a gathering with the president for the apical 25 holders.
The announcement came from GD Culture Group, a Nasdaq-listed steadfast with conscionable 8 employees and nary recorded gross past year. The institution claims to run an e-commerce level via TikTok, but appears to beryllium shifting strategy.
In a caller filing, GDC said it plans to allocate its fund to Bitcoin and TRUMP utilizing proceeds from a backstage banal placement to an unnamed entity based successful the British Virgin Islands, a jurisdiction known for its secrecy and favorable taxation status.
Turning a penny banal into a crypto whale
Until now, GD Culture Group has had a minimal nationalist footprint. Its operations successful China and reliance connected a Chinese-owned level similar TikTok gave it small visibility successful Western superior markets. But that changed dramatically erstwhile it revealed plans to rise hundreds of millions of dollars done a two‑year “equity line” (also called a committed‑equity facility) with a azygous accredited investor.
Whenever the institution chooses, it tin nonstop the capitalist a Purchase Notice telling the capitalist to bargain recently issued GDC communal shares. Cash from those stock sales, up to $300 million, volition beryllium the root of funds.
The capitalist tin ne'er clasp much than 4.99 % of the outstanding shares (with an enactment to assistance to 9.99 % with 61 days’ notice). Until shareholders o.k. more, GDC whitethorn not contented much than 3,357,407 shares (19.99 % of the existent float), the “Exchange Cap.”
At the $0.44 level price, raising the afloat $300 million would necessitate ~682 million caller shares, acold much than the existent 16.8 million outstanding and good supra the 19.99 % Exchange Cap.
Therefore, unless GDC’s banal terms rises sharply oregon shareholders ballot to waive the cap, the institution cannot instantly pat the full $300 million.
Should the transaction proceed arsenic filed, GDC’s assets could balloon from conscionable $14 cardinal astatine the extremity of 2024 to perchance much than $300 million. It would besides presumption the steadfast arsenic 1 of the largest holders of the TRUMP token, a memecoin launched earlier this twelvemonth that has funneled much than $320 cardinal successful fees to entities associated with Donald Trump and his family.
Politics, crypto, and TikTok successful the aforesaid frame
The timing of the determination is particularly contentious. Lawmakers successful Washington are debating a projected prohibition connected TikTok, citing nationalist information concerns implicit its Chinese ownership. President Trump has expressed enactment for a woody allowing the level to proceed operating successful the US, a presumption astatine likelihood with galore successful Congress.
GD Culture Group’s announcement straight intersects with this argumentation debate. Ethics experts reason that immoderate fiscal summation for the Trump household linked to specified a determination would correspond an evident struggle of interest.
The firm’s newfound crypto strategy echoes the playbook of Strategy (formerly MicroStrategy), the bundle institution turned Bitcoin mega-holder nether Michael Saylor. However, portion Strategy is simply a profitable endeavor with a agelong way record, GDC has nary gross and small nationalist accountability.
Still, successful February, the SEC issued a unit statement astir memecoins not being unregistered securities, commenting,
“It is the Division’s presumption that transactions successful the types of meme coins described successful this statement, bash not impact the connection and merchantability of securities nether the national securities laws.”
Questions linger, markets respond
Despite the announcement’s headline-grabbing nature, the existent logistics of the concern stay opaque. The institution has not provided a timeline for the purchases, immoderate escrow protections, oregon the individuality of the backstage investor, raising the anticipation that the determination is much symbolic than substantive.
Still, the TRUMP token has surged successful activity, with implicit 287 on-chain holders and beardown trading volume. A $300 cardinal infusion could importantly interaction the token’s liquidity and valuation, particularly if the purchaser enters the marketplace aggressively.
However, the full fund is improbable to beryllium allocated to TRUMP alone, and the percent earmarked for Bitcoin could person little melodramatic effects, fixed the size and maturity of that market.
Whether this stake pays disconnected for GD Culture Group oregon the Trump household whitethorn beryllium arsenic overmuch connected Washington’s decisions connected the ethics of president-owned memecoins.
With integer assets successful the spotlight, this improbable matrimony of a Chinese-linked TikTok subordinate and a MAGA-themed memecoin successful any different year would go 1 of 2025’s strangest fiscal storylines.
The station Chinese-linked steadfast raises $300M from backstage capitalist to bargain TRUMP memecoin appeared archetypal connected CryptoSlate.
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