The Layer 1 blockchain plans to go public via reverse merger with a Trump-linked company.
Layer 1 blockchain Tron, which boasts a total value locked (TVL) of $5 billion, on Monday announced plans to go public, raising political questions about President Donald Trump’s possible influence due to founder Justin Sun’s ties to the Trump family.
According to the Financial Times (FT), Tron plans a reverse merger with SRM Entertainment, a company that was listed on the NASDAQ in 2023. A reverse merger allows a company to go public at a lower cost and with less stock dilution than a traditional initial public offering (IPO).
The deal is being managed by Dominari Securities, an investment firm with ties to the Trump family – Bloomberg reported earlier this year that both Donald Trump Jr. and Eric Trump had joined as backers.
Moreover, Eric Trump is expected to take a role in the new company (Tron, Inc.), which will hold $210 million worth of Tron’s native token, TRX, FT reported. Shortly after the announcement, TRX spiked by 3% to $0.28, while SRM shares jumped more than 500% on the day to $9.
The announcement has sparked backlash on social media, largely due to Sun’s well-known ties to the Trump family. He has invested around $75 million in World Liberty Financial, a crypto project backed by President Trump. This move, Forbes reported, netted the Trump family around $400 million.
The relationship has also raised questions about Trump’s influence over Sun’s decision to IPO – and even whether it played a part in the dismissal of previous regulatory challenges. In 2023, Sun was charged by the US Securities and Exchange Commission (SEC) with civil fraud – however, earlier this year, following Sun’s massive purchase of WLFI tokens, the SEC paused its probe.
“Am I getting this right?” a popular crypto trader who goes by Clemente said on X this morning. “1. Tron investigated by SEC for market manipulation, 2. Justin Sun becomes top holder of $TRUMP and World Liberty Fi, 3. Investigation is dropped, 4. Tron goes public via reverse merger, with Eric Trump taking a role at the company. Crime season is here.”
Meanwhile, some wonder if this deal will become a talking point for Democrats, who have called for tighter crypto regulation lately.
“There’s a lot of political complexities given Dominari Securities and Eric Trump’s involvement, and given the current political environment in the US, this may polarize institutional sentiment,” Chuck Zhang, CFO of PolyFlow, told The Defiant.
He added that if the deal is well-executed, it could elevate TRX’s institutional profile, but cautioned that “investors should watch for legacy liabilities, political framing and execution risks very carefully.”
Tron did not immediately respond to The Defiant’s request for comment.
