Cronos Jumps as Trump Media Forms Treasury Initiative with Crypto.com

Trump Media and Technology Group (TMTG) said it will spend about $105 million on more than 685 million Cronos tokens for its balance sheet, while crypto.com will acquire $50 million in shares of common stock in Trump Media, according to a joint 26 Aug press release. TMTG's purchase covers about 2% of the total market cap of CRO, according to that document.

New entities

A few new legal entities were involved in achieving the alliance’s goals. Trump Media Group CRO Strategy, Inc. entered a “business combination” with Yorkville Acquisition Corp, a special-purpose acquisition company (SPAC) listed on the Nasdaq stock exchange under the ticker YORKU. Yorkville Acquisition Corp is "a blank check company" incorporated in the Cayman Islands, according to a filing with the US Securities & Exchange Commission (SEC).

The Trump arrangement with Crypto.com is intended “to form a digital asset treasury company focused on acquisition of CRO,” according to the statement.

Cronos surged 31% on Tuesday and increased an extra 10% to about $0.22 as at 06:18 UTC on Wednesday, for a total market cap of about $7.5 billion. The token remains overshadowed by the larger altcoins such as the $551 billion worth of Ether (ETH) and $178 billion total value of XRP.

>$6 Billion for CRO

Confusingly, TMTG issued an additional statement the same day, expanding on the ambitions for the CRO treasury.

According to the second statement, the expected funding for the digital asset treasury will include $1 billion in CRO (6.3 million CRO, representing about 19% of the total CRO market cap as of announcement), $200 million in cash and $220 million cash-in mandatory exercise warrants. TMTG has also fixed an additional $5 billion equity line of credit from an affiliate of Yorkville, YA II PN, Ltd., with which to purchase CRO. This means that more than $6 billion total will flood into acquiring Cronos tokens.

Elevated role for Cronos

While the focus is on the crypto corporate treasury play, the initiative creates an elevated role for Cronos in several different ways:

• CRO will be used as a “utility token” for a rewards system on the Trump family’s Truth Social networking channel and its Truth+ streaming platform.
• Trump Media also hopes to encourage subscriptions by facilitating payment in CRO.
• Crypto.com, which has long been involved with the Cronos blockchain project, will provide digital wallet infrastructure.

The Trumps and their associates have also rallied around other cryptocurrencies since the President took office near the start of this year, though Cronos was clearly flavour of the day on Tuesday:

“We believe CRO is poised to become a foundational network for the next generation of asset exchange and money transfers for a world-leading, digital-first America,” TMTG CEO Devin Nunes said.

Blockchain advantages

Cronos is an interoperable system that echoes many of the other advantages associated with blockchains, such as speed, scalability and connectivity between networks. It is set to unlock “widescale adoption of decentralized applications in finance, commerce, and public infrastructure, without the congestion or costs of legacy networks,” according to the press release. 

Crypto.com Co-Founder and CEO Kris Marszalek called Trump Media an “innovator” in digital media, adding:

“This CRO integration is a historic moment for the Cronos blockchain and a testament to the loyal community of builders dedicated to broadening access to the benefits and opportunities of crypto,” said.

The project is subject to approvals from the US Securities & Exchange Commission (SEC).