(Reuters) – President of the United States, Donald Trump, has announced that a binding deal between Trump Media & Technology Group and another US company has been reached. This new diversification of the company is an attempt to expand into the financial services sector. The agreement stated that a specific set of exchange-traded funds (ETFs) labeled as “America First,” specifically aligned with the ETFs policies, will be offered. This contract further stems from partnerships made between Trump Media and crypto-centered firms. These partnerships include Crypto.com, which provides digital asset services alongside Foris LLC, a broker-dealer company. Another partner, Yorkville America Digital, is an affiliate of Yorkville Advisors, which is located in New Jersey and specializes in investment and asset management.
As of Tuesday’s announcement, ETF filings associated with this proposal have not yet been posted online at the SEC’s website, a prerequisite for these products to be publicly sold. Devin Nunes, the Trump Media CEO, shared his thoughts about the announcement in a press release. Nunes was quoted as stating, “We look forward to bringing ETFs to the market for those investors who subscribe to the American economy and digital assets’ growth potential.” His comment already indicates the broad investor philosophy that these products are aiming to capture.
Pertinent Regulatory Framework and Partner Situation
The announcement of the binding agreement comes along with some relevant regulatory context concerning one of the key partners. On March 27, Crypto.com made the announcement that the SEC had notified the company that it had closed a 2024 investigatory period on the company’s conduct. Crypto.com reported that the SEC confirmed it would file no enforcement action against the digital asset platform stemming from that investigation. As for the binding agreement made on Tuesday, Trump Media, Foris, Crypto.com, and Yorkville could not be contacted by Reuters for immediate comment.
Trump Family’s Expanding Crypto Footprint
Over the past few years, the Trump family has expanded their activity in the cryptocurrency sector, which was a noticeable pivot from their conventional interests centered around real estate, which includes the construction of high-rise buildings and the ownership of luxurious country clubs. Allegedly, the family’s initial ventures into cryptocurrency enabled them to reap hundreds of millions of dollars in profits, earning these forays the name “beachheads.” Other crypto endeavors include Trump NFTs, a stake in a meme coin, shares in a newly established bitcoin producer dubbed American Bitcoin, and some association with a cryptocurrency exchange named World Liberty Financial. Trump’s active engagement in digital assets other than the securities-traded Trump Media branch indicates profound shifts within the family business.
Asset Management and Trust Structure
The Trump Organization’s statement at the beginning of this month provided additional information concerning President Trump’s business activities by announcing the management of his assets. Now it has been made clear that the~ President’s interests in investments and businesses, comprising a $2.7 billion stake in Trump Media, shall be placed within a trust under his children’s management.
The statement further outlined that President Trump would have no involvement in the daily operational functions or any decision-making in regard to the management of these assets and business interests for the duration of his presidential term. This structure attempts to alleviate any concern of conflict of interest by partitioning his government responsibilities from the hands-on oversight of his real estate portfolio, even those that pertain to emerging crypto undertakings.
Current Policy-Based ETFs
In terms of certain political or policy goals, products of a political nature aligned with policies already exist in the form of ETFs. Some already exist that trilaterally invest in a manner that supports President Trump’s policies or investments that are geared towards his policies. The author cites that the largest of these funds is the American Conservative Values ETF, which has $110 million under management and was launched in October 2022. Another example cited is the God Bless America ETF, which was launched in the same month as the American Conservative Values ETF. This fund, as of this writing, has total assets of $79.4 million and describes itself on its website as “an investment for God-fearing, flag-waving conservatives.” These examples demonstrate a need for funds that cater to politically motivated investment strategies, which, it appears, are the model that Trump Media’s proposed ETFs hope to serve in the crypto and other financial services sectors.
