A struggling technology company that has ties to China and relies on TikTok made an unusual announcement this week. It had secured funding to buy as much as $300 million of $TRUMP, the so-called meme coin marketed by President Donald Trump.
GD Culture Group, a publicly traded firm with a Chinese subsidiary, has only eight employees, its public filings show, and recorded zero revenue last year from an e-commerce business it operates on TikTok, a Chinese-owned video-sharing app.
But on Monday, GD Culture Group became the latest business with foreign ties to seize on Trump’s crypto venture, which channels profits directly to the Trump family and has generated conflicts of interest that have alarmed ethics experts. (Meme coins like $TRUMP are a type of cryptocurrency based on an online joke or celebrity mascot and have traditionally not had any utility beyond speculation.)
In its statement, GD Culture Group, which is traded on the Nasdaq, said it would spend $300 million on a stockpile of bitcoin and $TRUMP, using proceeds from a stock sale to an unnamed entity in the British Virgin Islands, a popular tax haven. It confirmed that investment plan in a securities filing late Tuesday.
The purchase would create clear ethical conflicts, enriching Trump’s family at the same time that the president tries to reach a deal that would allow TikTok to keep operating in the United States rather than face a congressionally approved ban.
The announcement also shows how investors around the world, including some that have virtually no public footprint, have latched on to the president’s crypto ventures to boost their own business prospects.
Just asserting a connection to Trump’s business can quickly raise a company’s profile. GD Culture Group’s struggling stock rose 12% on Monday, before losing those gains the next day.
“Make no mistake. These foreign entities and governments obviously want to curry favor with the president,” said former Rep. Charles Dent, R-Pa., who was the chair of the House Ethics Committee. “This is completely out of bounds and raises all sorts of ethical, legal and constitutional issues that must be addressed.”
Investors in foreign countries have rushed to stock up on the $TRUMP coin since it hit the market in January. Some have stated explicitly that they hoped to use their purchases to influence Trump.
GD Culture Group was less clear about its intentions. In its statement, the company said it wanted to “enhance its balance sheet with high-performance, scalable digital assets.”
It is unclear whether the company will even follow through on the announcement, or how much of the $300 million it has received from its unidentified investor. Last month, the company disclosed that it was in danger of losing its Nasdaq listing because it had failed to meet certain financial requirements.
But any purchase by GD Culture Group would be the first known example of a China-linked firm buying Trump’s meme coin. In its financial disclosures, the company has noted that its subsidiary, Shanghai Xianzhui, might be influenced by demands from the Chinese government, though that is not unusual wording for a Chinese company.
“The Chinese government may intervene or influence its operations at any time,” the company said in an annual report filed in March.
In recent weeks, the Trump family has faced an intensifying backlash in Washington over its business dealings with foreign countries.
On the Senate floor Tuesday, Sen. Chris Murphy, D-Conn., spent 20 minutes walking through the various sources of overseas money pouring into the Trump family business, including the meme coin, a real estate deal involving the government of Qatar and a separate $2 billion crypto deal with a firm backed by the United Arab Emirates.
“If a mayor of a small town was selling meetings at City Hall for a thousand bucks, he would be run out of town on a rail, but that’s exactly what Donald Trump is doing in the Middle East and all over the world,” Murphy said.
Representatives for the White House, the Trump Organization and GD Culture Group did not respond to requests for comment.
Trump started selling the $TRUMP coin three days before his inauguration, one of several crypto ventures that he and his sons have pursued. The coin’s price briefly surged, then crashed just as quickly, costing investors billions of dollars.
Last month, Trump and his business partners announced that the top 220 buyers of the coin would be invited to a dinner with the president at his golf club in Virginia, sparking another round of frantic trading that further enriched the Trump family. An analysis by The New York Times and crypto forensics firm Nansen found that many of the coin’s buyers were based overseas in countries including Mexico, Singapore and Australia.
Under federal law, foreign investors are barred from donating to a political campaign or a president’s inaugural fund. But Trump’s crypto ventures have offered a new avenue for these overseas buyers to support him financially.
In April, a Mexico-based shipping firm, Fr8Tech, announced that it would spend $20 million on Trump’s meme coin as a way to “advocate for fair, balanced and free trade between Mexico and the U.S.”
The statement by GD Culture Group did not mention any policy objectives. Xiaojian Wang, the CEO, said the company was embracing “industrial transformation” through cryptocurrencies and moving to “strengthen our financial foundation.”
It was unclear how exactly GD Culture Group had secured the funding to buy hundreds of millions of dollars of crypto. In its statement, the company did not reveal any information about the entity in the British Virgin Islands that agreed to purchase its stock.
In its filing with the Securities and Exchange Commission on Tuesday, GD Culture Group confirmed its plans to buy $TRUMP — but again omitted any information about the entity that is financing the purchase.
Historically, the British Virgin Islands has been a favorite jurisdiction for overseas investors seeking to maintain confidentiality, because it is easy to set up a shell company there.