Trump Media and Technology Group, the company majority-owned by US President Donald Trump that runs his Truth Social media platform, filed with the US Securities and Exchange Commission (SEC) to launch a Bitcoin exchange-traded fund (ETF).
TMTG filed an initial registration statement on Form S-1 for its Truth Social Bitcoin (BTC) ETF on June 5, according to an announcement by the company. The filing reads:
“The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust. The Trust seeks to reflect generally the performance of the price of Bitcoin.“
The filing comes after stock exchange NYSE Arca submitted a proposal to the SEC to list the Truth Social Bitcoin ETF on behalf of crypto asset manager Yorkville America Digital, a partner of TMTG, the owner of Truth Social.
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The ETF’s setup
If approved, the Truth Social Bitcoin ETF will see cryptocurrency exchange Crypto.com act as its exclusive custodian, prime execution agent and liquidity provider. The ETF is part of an increasing number of crypto products seeking regulatory approval in the US.
The new fund features exclusivity clauses. According to the filing, Crypto.com will offer certain services exclusively to the trust behind the product. The product fees are still to be determined.
Related: Trump memecoin wallet in ‘absolute chaos’ as family org unaware of launch
Front-running? Yes please
The filing also seemingly reserves the right for the ETF’s sponsor to front-run transactions. The document reads:
“Prospective Shareholders should be aware that such persons may take positions in bitcoin which are opposite, or ahead of, the positions taken for the Trust. There can be no assurance that any of the foregoing will not have an adverse effect on the performance of the Trust.“
While many Bitcoin ETF filings acknowledge potential conflicts of interest, they typically include measures to mitigate such conflicts.
In the case of a fork, ETF holders will also have no right to the corresponding asset. As explained, “the Sponsor will cause the Trust to permanently and irrevocably abandon the Incidental Rights.”
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