In brief
- Trump Media plans to distribute new crypto tokens to shareholders.
- It set a cutoff date of Feb. 2 for investors.
- The company has said the tokens won’t represent a stock, and will be non-transferrable.
Trump Media and Technology Group plans to airdrop or distribute tokens to shareholders, and on Tuesday set a cutoff date for investors in the Truth Social operator.
The company linked to U.S. President Donald Trump will treat Feb. 2 as the record date for an initiative involving “new digital tokens” for investors, according to a press release. The company added that “various rewards” will be made available for them in the future.
The Sarasota, Florida-based firm previously disclosed that the tokens will not represent interest in Truth Social, nor any company. Tump Media also doesn’t expect tokens to be transferable, exchangeable for cash, or doled out to shareholders that aren’t beneficial owners.
The company suggested that shareholders contact their brokerage to ensure that they aren’t designated as an objecting beneficial owner, noting that the classification could cause delays in its process for determining who is eligible for the distribution. Investors must also own at least one full share to be eligible, it added.
Trump Media has shared little details about what purpose the token will serve, but it underscores the company’s efforts to integrate crypto across its businesses, which include fintech brand Truth.Fi, and products like prediction market Truth Predict.
Trump Media said the tokens would be “minted” in partnership with Crypto.com, the crypto exchange that powers Trump Media’s prediction market product, via the Cronos blockchain. The crypto exchange said in August that its infrastructure for digital wallets would be integrated with Truth Social.
Trump Media’s shares recently changed hands around $14.19 a 2.2% increase, according to Yahoo Finance. The price of Cronos (CRO) had fallen 5% over the past day to $0.09, according to CoinGecko.
That announcement said Trump Media was adopting Cronos as a “utility token,” with plans to let Truth Social users purchase subscriptions and services using the token. Tuesday’s press release noted that the token initiative could include discounts related to Trump Media products.
In a statement, Trump Media’s CEO and Chairman Devin Nunes said the company’s planned use of Crypto.com’s blockchain is in accordance with SEC regulations. Under Trump, the regulator closed an investigation into Crypto.com last March.
Crypto.com’s parent company, Foris DAX, spent $2.8 million lobbying on Capitol Hill last year, according to Open Secrets. The company also donated funds to PACs that supported Trump’s bid for re-election, a fact scrutinized by Democratic lawmakers in a recent letter.
The initiative detailed by Trump Media comes as Wall Street giants, including the New York Stock Exchange, are preparing to support tokenized securities. However, the Trump-linked firm has made it clear that the tokens it will give shareholders are not digital representations of equity.
Under the SEC’s previous leadership, companies like Coinbase were wary of creating a token for Base, the Ethereum-based, layer-2 scaling network that it incubated. The company has since said the move has come under consideration, but it hasn’t provided a timeline yet.
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Source: https://decrypt.co/355174/trump-media-airdrop-crypto-tokens-shareholders-february
