Truth Social’s Parent Company Proposes Blue-Chip Crypto ETF

Yorkville America Digital, LLC, in collaboration with Trump Media & Technology Group (TMTG), the entity behind President Donald Trump’s “free speech” social media platform, Truth Social, has submitted an S-1 registration statement to the U.S. Securities and Exchange Commission (SEC). This filing outlines their intent to launch the Truth Social Crypto Blue Chip exchange-traded fund (ETF).

Collaboration and ETF Structure

The proposed ETF, structured as a Nevada business trust and sponsored by Yorkville, is slated for listing on NYSE Arca. TMTG, with Trump as its majority owner, launched Truth Social in February 2022, positioning it as an alternative social media platform after Trump faced bans elsewhere. The ETF’s primary holdings will target bitcoin (70%), ether (15%), solana (8%), cronos (5%), and XRP (2%). These digital assets will be held by Foris DAX Trust Company, LLC, as the custodian.

Shares will be issued and redeemed exclusively in large blocks, referred to as “baskets,” consisting of 10,000 units or multiples thereof. These transactions will be conducted solely by authorized broker-dealers. Initially, creations and redemptions will involve cash exchanges with affiliate liquidity provider Foris DAX, Inc., pending regulatory approval for in-kind transactions.

The trust’s only recurring charge is the sponsor’s fee, set as an annualized percentage of the net asset value (NAV), which accrues daily and is payable quarterly. This fee covers the majority of administrative expenses, and the sponsor will also be responsible for organizational and initial offering costs. Extraordinary expenses, however, would be borne by the trust.

Risks and Operational Details

The regulatory filing discloses significant risks, including cryptocurrency market volatility, regulatory uncertainty, the potential for assets to be characterized as securities, operational threats such as hacking, and complexities related to tax treatment. Notably, the trust is currently prohibited from earning staking rewards and will forgo rights stemming from forks or airdrops. The filing asserts that the trust qualifies as an “emerging growth company,” which reduces certain reporting obligations.

Anchorage Digital Bank NA has been designated as the cash custodian, while CF Benchmarks Ltd. will provide daily pricing rates for the ETF’s assets. Quarterly rebalancing is planned to maintain the target asset allocations. The SEC must declare the registration effective before sales can commence, marking a notable financial product development within President Trump’s Truth Social ecosystem.