Crypto Tycoon Justin Sun's Tron Group to Go Public in U.S. via Reverse Merger — WSJ

By Alexander Osipovich, Vicky Ge Huang and Connor HartCrypto billionaire Justin Sun's Tron group will go public through a reverse merger with a small Nasdaq-listed toy company, the latest move by the Chinese-born tycoon to bring his digital-currency empire to the U.S.SRM Entertainment said Monday that it would change its name to Tron and that Sun had been named an adviser to the company. SRM also said that it had signed a securities purchase agreement for a $100 million investment to be used to acquire Tron's TRX digital tokens.The announcement comes after Sun attended a gala dinner with President Trump last month for the largest holders of Trump's memecoin — an event that was criticized by Democrats and government-watchdog groups as a brazen act of self-enrichment, allowing big crypto investors to buy access to the president. Sun amassed more than $20 million of the memecoin to earn his spot at the dinner."This time the big one is finally here," Sun said in a social-media post in Chinese on Monday about the SRM deal. Representatives of Tron didn't immediately respond to requests for comment.Winter Park, Fla.-based SRM currently designs and manufactures toys, souvenirs and plush items for theme parks and entertainment ventures. Its products include Smurfs water bottles and stuffed animals such as "Hanna Hedgehog" and "Gideon Gator," according to SRM's online catalog.SRM shares surged on the disclosure, rising more than 500% on Monday to close at $9.19.The toy company said it was acquiring TRX to establish a Tron "treasury strategy," referring to the growing ranks of publicly traded companies that have announced plans to add cryptocurrencies for their balance sheets. Dozens of companies with no previous ties to crypto have embraced the strategy, in which they typically sell shares and debt to buy digital tokens.Many of these companies have acquired bitcoin — the oldest and largest cryptocurrency — but some have announced plans to buy smaller tokens such as ether, solana and Trump's memecoin.Dominari Securities, a small investment firm that leases office space in the Trump Tower, is the sole firm responsible for finding investors and managing the capital-raising process for SRM's token deal. In February, Dominari shares rallied after the company named President Trump's sons Eric Trump and Donald Trump Jr. as advisers.Sun has pursued close ties to the Trumps since the November election. He invested $75 million in World Liberty Financial, the crypto venture backed by the Trump family, and became an adviser to the project. HTX, a crypto exchange that Sun effectively leads, recently became the first trading venue to list World Liberty's USD1 stablecoin, a type of cryptocurrency pegged to the U.S. dollar.Just a few months ago, Sun faced charges from the Securities and Exchange Commission, which in 2023 accused him of manipulating the market for Tron's TRX token. In February, the SEC asked a court to pause its fraud lawsuit against Sun and three of his companies. The move was part of a broader rollback of crypto enforcement under the Trump administration.Sun has said that his investment in World Liberty wasn't politically motivated. He has called the SEC's lawsuit meritless.Under the terms of the agreement, SRM will issue 100,000 shares of its Series B Convertible Preferred Stock, which can be converted into 200 million shares of common stock at 50 cents per share. Additionally, the company will issue 220 million warrants, allowing SRM to acquire up to about 220 million shares of common stock at an exercise price of 50 cents per share.The investment, valued at $210 million upon full exercise of the warrants, will allow SRM to develop a substantial Tron treasury strategy, it said. The company added that the move aligns with its objective to create long-term shareholder value by leveraging the global adoption of blockchain and digital innovation.As part of its Tron treasury strategy, SRM also intends to implement a dividend policy."As blockchain technology gains wider adoption globally, Tron has become the industry leader for cross border settlement in U.S. dollar stablecoin," said Chief Executive Rich Miller. "We are excited to invest into the future of the world's next generation financial infrastructure."Write to Alexander Osipovich at [email protected], Vicky Ge Huang at [email protected] and Connor Hart at [email protected]