In a new move to bring his blockchain empire into the U.S. public markets, crypto mogul Justin Sun has inked a reverse merger deal between his Tron network and SRM Entertainment, a little-known toy company listed on the Nasdaq.
Announced Monday, SRM Entertainment revealed plans to rebrand as “Tron Inc.” and welcomed Sun as a strategic adviser. The company also disclosed a $100 million equity investment earmarked to purchase TRX, the native token of the Tron blockchain. Upon full exercise of associated warrants, the investment could reach $210 million in value.
SRM, based in Winter Park, Florida, specializes in manufacturing and distributing themed toys and souvenirs, with products ranging from Smurfs water bottles to custom plush animals. However, the company now aims to pivot into the blockchain space, adopting a so-called “Tron treasury strategy” that will see it allocate significant capital to crypto holdings, mirroring a growing trend among publicly listed companies.
The merger comes amid renewed interest in digital assets and their institutional adoption, as well as increased scrutiny over Sun’s political and regulatory entanglements. Notably, Sun made headlines last month after attending an exclusive dinner for high-level holders of a Trump-branded memecoin, sparking debate over potential pay-to-play dynamics in U.S. politics. To secure his seat, Sun reportedly acquired more than $20 million worth of the token.
SRM’s shares surged over 300% on the announcement, briefly topping $9 in intraday trading, before settling at $6.70, still a dramatic leap from Friday’s close of $1.45.
The reverse merger strategy allows Tron to go public without the complexities of a traditional IPO, at a time when regulatory headwinds for crypto firms remain significant. Though SRM did not confirm the identity of the investor behind the $100 million capital injection, reports from the Financial Times suggest the funds will originate from Tron itself.
The transaction was orchestrated by Dominari Securities, a boutique investment bank based in Trump Tower. In February, Dominari drew attention after naming Donald Trump Jr. and Eric Trump as board members of its parent company, Dominari Holdings.
The SRM agreement includes the issuance of 100,000 shares of Series B Convertible Preferred Stock, convertible into 200 million common shares at $0.50 per share. Additionally, SRM will issue warrants for another 220 million shares, also priced at $0.50 each, paving the way for one of the most significant crypto-related stock transitions in recent months.
Rich Miller, SRM’s CEO, expressed confidence in the strategic shift, “As blockchain technology gains wider adoption globally, Tron has become a leader in cross-border settlement using U.S. dollar stablecoins. This investment positions us to build long-term value through digital innovation.”
The deal also strengthens Sun’s alignment with Trump-affiliated crypto ventures. Earlier this year, Sun increased his stake in World Liberty Financial, a Trump-backed crypto startup, to $75 million, and his exchange, HTX, became the first to list its USD1 stablecoin. USD1, pegged to the U.S. dollar, is now part of Tron’s expanding financial ecosystem.
Sun’s growing ties to political power have raised eyebrows. Critics argue that his investments in projects linked to President Trump could create conflicts of interest, especially given that Trump stands to benefit financially from some of the entities involved. While President Trump claims to have placed his business holdings in a trust managed by his children, ethics experts remain skeptical.
It is worth noting that Sun, who is Chinese-born, remains under legal scrutiny. In 2023, the U.S. Securities and Exchange Commission filed a civil lawsuit accusing him of market manipulation related to TRX. However, that lawsuit was paused earlier this year as part of what appears to be a broader shift in crypto enforcement policy under the current administration.
