Justin Sun is back in the spotlight. A new round of capital maneuvering is underway, with his blockchain project Tron (TRX) making a strategic push toward the U.S. capital markets—this time, through a reverse merger aimed at bypassing the traditional IPO process.

On Monday, SRM Entertainment, a Nasdaq-listed company, announced it had reached a definitive agreement with Tron. Under the terms of the deal, SRM will purchase $100 million worth of Tron tokens and subsequently rebrand itself as “Tron Inc.” Justin Sun is set to join the company in an advisory role.

The news sent SRM’s stock surging over 300%, skyrocketing from $1.45 at Friday’s close to an intraday high of $6.70 on Monday.

While SRM's announcement did not explicitly disclose the funding source, reports from The Financial Times suggest the $100 million is funded by Tron itself, a move seen as a strategic attempt to complete a reverse acquisition and secure a U.S. listing without going through the rigorous IPO process.

Adding political intrigue to the deal, the boutique investment bank behind the transaction—Dominari Securities—is controlled by Dominari Holdings, whose board welcomed Donald Trump Jr. and Eric Trump as directors earlier this year. The Trump family’s indirect involvement has sparked concerns among ethics experts and lawmakers about potential conflicts of interest, though Trump representatives maintain that the family’s assets are managed through a trust to avoid such issues.

Can Crypto Firms Win Wall Street’s Confidence?

Tron’s high-profile entry into U.S. markets via reverse merger has drawn significant attention, but it’s far from the first crypto project to go public. In 2021, Coinbase became the first major crypto exchange to list on the Nasdaq. It debuted with a market cap exceeding $86 billion, though its share price later experienced sharp volatility due to market cycles, regulatory scrutiny, and revenue fluctuations.

Coinbase’s stock plunged over 80% during the crypto winter of 2022, only to partially rebound in 2024 after the U.S. approved spot Bitcoin ETFs and the Federal Reserve adopted more stable monetary policies.

Other blockchain-related firms, particularly hardware manufacturers and mining companies, have also pursued public listings—with similarly rocky results. Canaan Inc., a Bitcoin mining rig producer, listed in 2019 but struggled to meet valuation expectations. Its stock soared during the 2021 bull market only to crash during subsequent downturns.

Companies like Marathon Digital Holdings and Riot Platforms have also seen their fortunes rise and fall with Bitcoin’s price and electricity costs—highlighting the extreme volatility crypto firms face post-listing.

In this context, Tron’s long-term success on Wall Street will likely depend on its ability to build a sustainable ecosystem and deliver clear, verifiable value—not just bold headlines.

Why a Reverse Merger? Tron's Shortcut to the Nasdaqe

A reverse merger, also known as a backdoor listing, involves a private company acquiring a struggling public firm—often a “shell” company with little to no active business—then injecting its own assets and operations into the entity. This process provides a faster, more flexible route to public markets.

For Tron, the choice seems calculated. Here’s why:

  • Speed and Simplicity: Traditional IPOs often take 12–18 months, while reverse mergers can be completed in 3–6 months. With crypto sentiment warming, Tron appears eager to seize the moment.
  • Avoiding Regulatory Minefields: IPOs require extensive disclosures, SEC reviews, and investor roadshows. A reverse merger sidesteps much of this scrutiny. With the SEC lawsuit against Justin Sun on hold, this route offers a safer regulatory buffer。
  • Flexible Valuation and Financing: Reverse mergers allow dealmakers to pre-negotiate valuations. SRM’s planned follow-on investment round (potentially raising up to $210 million) provides further financial runway.
  • Lower Costs and Strategic Token Integration: Avoiding underwriter fees and integrating token-based financing into the structure enables greater flexibility—particularly valuable for well-funded entities like Tron.
  • Shielding Against Market Timing Risks: IPO windows can close quickly in volatile markets. Reverse mergers aren’t subject to the same investor sentiment or economic cycles.

However, backdoor listings come with risks. Shell companies may carry undisclosed liabilities, and even post-merger, many fail to attract investor confidence or maintain stock performance. Regulatory scrutiny around reverse mergers is also intensifying, making it a shortcut that’s far from foolproof.

Justin Sun: Visionary or Risk Magnet?

Justin Sun remains one of crypto’s most polarizing figures. Known for aggressive marketing and headline-grabbing stunts, he built Tron into a major blockchain ecosystem—but not without controversy.

In 2023, the U.S. SEC sued Sun and his affiliated companies for allegedly offering unregistered securities and manipulating token markets. In a surprising move this February, the SEC requested a pause in its case, leaving observers puzzled and speculation swirling.

For now, Sun continues to be the face—and engine—of Tron’s expansion. His bold plays have attracted capital and attention, but also raised concerns about sustainability and governance. If Tron can execute on its tech roadmap and show real adoption, it may earn Wall Street’s confidence. But if regulatory or market headwinds return, the company—and Sun himself—may face a credibility reckoning.