Trump Media and Crypto.com's $6 Billion Cronos Treasury Inches Closer to Public Debut

MCGA -0.14%

Trump Media and Technology Group and Crypto.com are one step closer to a business combination that will mark them as affiliates in a publicly traded Cronos (CRO) treasury—one that has ambitions of holding over $6 billion worth of the cryptocurrency.

Yorkville Acquisition Corp., now trading on the Nasdaq as MCGA, confidentially filed an S-4 with the SEC to establish Trump Media Group CRO Strategy, Inc. via a business combination, it announced on Monday. 

The firm also appointed two key executives, Steve Gutterman as CEO and Sim Salzman as CFO, who are expected to take their roles in Q1 with the anticipated business combination closing. The business combination is subject to customary closing costs.

“MCGA is uniquely positioned to scale and create shareholder value. No one else has the partners or the positioning that we do,” said Gutterman in a statement. “Sim and I could not be more excited to lead MCGA and to work with the teams at Yorkville, Crypto.com, and Trump Media to Make CRO Great Again.”

First announced in August, the treasury focuses on the Crypto.com platform’s native token, CRO, and is expected to initially open with 6.3 billion CRO, $200 million in cash, $220 million in warrants, and an additional $5 billion equity line of credit (ELOC).

At the time of the announcement, the treasury’s anticipated CRO holdings were valued around $1 billion, but the present day value of 6.3 billion CRO tokens is now around $636 million—a loss of around 36% as CRO has slid more than 30% in the last month of trading.

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A representative for the firm did not immediately respond to Decrypt's request for comment and clarification on the current treasury holdings.

Note that with CRO's recent price decline, the asset's market cap sits at $3.7 billion, though the fully diluted valuation including locked tokens tops $9.7 billion. But the treasury plan is likely built around the expectation that CRO's price will rise over time, and perhaps that its own purchases would help fuel that growth.

The treasury will also establish and operate a Cronos validator node, delegating its CRO assets to the validator with expectations of earning around 6% APY in staking rewards, according to an investor presentation.

“The founding partners believe CRO offers a unique opportunity,” the firm said in a written statement from September. “It represents the backbone of a growing blockchain ecosystem (Cronos). CRO enables both utility (transactions, fees, governance) and yield generation (staking rewards).”

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In August, Trump Media, which bought around $2 billion worth of Bitcoin and related equities in July, said it would buy $105 million of CRO and use the token in a rewards program across its Truth Social and Truth+ platforms. 

Shares of Trump Media (DJT) are down around 6% on Monday, recently changing hands at $10.88. DJT has now fallen 49% in the last six months. 

Shares of MCGA are flat on the day, but the firm’s treasury asset, CRO, has fallen 8.3% in the last 24 hours and recently traded at nearly $0.10—around 90% off its 2021 all-time high of $0.96.