The altcoin digital asset treasury (DAT) is raising billions of dollars from investors, with supporters believing it can enhance token adoption, while critics worry it may be a legitimate cover for major holders to orchestrate a cash-out exit. This article is based on a piece written by RT Watson and is organized, translated, and authored by TechFlow. (Background: The largest Bitcoin miner's dream) Tether partners with South American agricultural company Adecoagro to implement renewable energy mining) (Additional background: Palantir founder Peter Thiel invests in BitMine mining company with a 9.1% stake, betting on Ethereum) Quick Overview The altcoin digital asset treasury (DATs) is raising billions of dollars from investors, aiming to promote specific tokens while achieving profitability through publicly listed companies. Supporters believe that DATs will enhance the visibility of tokens, drive widespread adoption, and generate revenue; critics argue that this model could convey worrisome signals, suggesting that major holders are quietly planning a cash-out exit. Digital Asset Treasuries (DATs) have become one of the most controversial trends in the crypto industry. Supporters believe they can drive token adoption and deliver substantial returns; however, critics are concerned that this model may imply that major holders are quietly plotting a cash-out exit. With billions of dollars pouring in, well-known figures such as U.S. President Donald Trump, Binance founder Changpeng Zhao, and Tron founder Justin Sun are involved. Brian Rudick, Chief Strategy Officer of Solana treasury company Upexi, is also a staunch supporter of DATs. In an interview with The Block, Brian Rudick stated: “Most digital asset treasuries are one-way acquisition tools that can drive up token prices, thereby attracting users, developers, and decentralized applications (dApps). They can significantly enhance the visibility of the token ecosystem, especially among traditional investors and institutions.” The concept of DAT can be traced back to Michael Saylor's decision five years ago. At that time, he transformed his publicly listed software company MicroStrategy (now renamed Strategy) into an accumulator of Bitcoin. After a significant rise in Bitcoin prices, especially at the end of last year, the shareholder value of Strategy saw exponential growth. The company's Bitcoin-centric strategic transformation suddenly seemed very wise, and Strategy's success has inspired many in the crypto space to mimic this model. Source: The Block Data. The enthusiasm for DAT began to spread slowly in 2024, initially triggered by other companies announcing Bitcoin fund management strategies. Soon after, these companies started to hold substantial amounts of other popular cryptocurrencies, such as Ethereum and Solana. Ultimately, this craze gave birth to a new type of DAT—altcoin-focused DATs, directly related to the figures and organizations behind the tokens. However, the nature of these transactions and the close relationships between some newly established DATs and token developers, major supporters, and primary holders have raised widespread concern. These DATs are often small-cap Nasdaq companies that previously had no connection to the crypto space, which inevitably raises questions about their motivations. “The establishment of many digital asset treasuries involves insiders who were already connected to the target assets when these companies were created. These structures clearly raise ethical questions about who can gain privileged access and the information surrounding their formation and strategies,” said Steven Zheng, research director at The Block. Digital asset treasury supported by the Trump family: the backstory of unlisted tokens This week, World Liberty Financial, a cryptocurrency company backed by the Trump family, announced plans to raise $1.5 billion to kickstart funding for its WLFI governance token, which is currently non-tradable and not listed on exchanges. Shortly thereafter, World Liberty co-founder Zach Witkoff revealed specific transaction details regarding the transformation of a small tech company ALT5 into a WLFI token accumulation machine in an interview with CNBC. “If you look at pre-market trading... our token (WLFI) is trading between $0.35 and $0.90, which implies a fully diluted valuation between $35 billion and $90 billion,” Witkoff stated in the CNBC interview. “ALT5 acquired these tokens at a valuation of $0.20. If you take a simple average of the pre-market trading, the valuation is about $0.56. This means that based on ALT5's acquisition price, they acquired these tokens at approximately a 64% discount, which we believe will provide significant appreciation for shareholders.” World Liberty is the lead investor in this $1.5 billion financing, essentially exchanging WLFI tokens for ALT5 stock. Additionally, the company stated that Eric Trump serves on the ALT5 board alongside Witkoff. President Trump and his sons are all supporters of the World Liberty initiative. World Liberty has not yet responded to requests for comment. Discount on Open Network DAT This month, Nasdaq-listed Verb Technology announced plans to raise $558 million to increase its holdings in Toncoin (the native token of the Open Network, or TON blockchain). This multimillion-dollar investment involves venture capital firms such as Kingsway Capital, Ribbit Capital, and Vy Capital. TON is an exclusive blockchain connected to Telegram, which is operated by Pavel Durov, who indicated in 2023 that he holds Toncoin. According to an investor presentation submitted to the U.S. Securities and Exchange Commission (SEC), Verb Technology (renamed TON Strategy) anticipates benefiting from purchasing TON at a discounted price. The company stated in the presentation: “Based on the existing relationships of the TON Strategy board, management, and advisors in the TON ecosystem, the company believes it can secure a significant amount of TON supply at approximately a 40% discount.” According to a TON spokesperson, Kingsway Capital, Vy Capital, and Ribbit have been bullish on TON since at least March of this year. At that time, all three investment firms collectively participated in a large purchase of Toncoin worth $400 million from “early investors.” Kingsway Capital CEO Manuel...

#SEC #BTC #ETH