To break into the cryptocurrency mining industry, Eric Trump and Donald Trump Jr. are teaming up with executives who previously founded a miner backed by investors involved in an illegal penny-stock pump-and-dump operation.
The Trump sons, alongside other investors, created a new company and merged it with publicly traded miner Hut 8 Corp., led by Chief Executive Officer Asher Genoot and Chief Strategy Officer Michael Ho. These executives joined Hut 8 in 2023 when the company acquired another miner called US Bitcoin, which was formed with financial backers who settled SEC accusations of illegal promotion and manipulative trading of microcap stocks in 2018.
US Bitcoin faced scrutiny from Massachusetts regulators for improperly selling shares without registration. Both the SEC and Massachusetts cases were settled with fines without admitting wrongdoing.
When questioned about the relationship between Hut 8 executives and the involved investors, a spokesperson stated that these individuals were merely a small part of many investors and had no governance roles in the businesses.
The venture, named American Bitcoin, was announced on March 31, with Hut 8 contributing nearly all of its ASIC mining computers for an 80% stake in the new entity. Eric Trump was appointed as chief strategy officer. Financial details of the deal remain undisclosed, but there are plans to take American Bitcoin public.
Prior to their roles at Hut 8, Genoot and Ho co-founded US Bitcoin in 2020, which was assisted by investors who had settled with the SEC in a pump-and-dump case. US Bitcoin was later fined by Massachusetts for securities violations.
Hut 8's acquisition of US Bitcoin raised eyebrows amid concerns over connections to the pump-and-dump investors, leading to a research report from a short-seller that Hut 8 called misleading. Hut 8 has since made efforts to distance itself from those involved in the past allegations.
In a recent interview, Eric Trump praised Hut 8's leadership, emphasizing their efficiency and dedication. He described their entry into Bitcoin mining as part of a broader interest in the crypto industry, seeing it as an alternative to traditional finance, which he claims has targeted their family.
The formation of American Bitcoin aligns with a promise made by President Donald Trump to establish the US as a Bitcoin superpower. As the Trump family expands its digital asset endeavors, Eric maintains that there are no conflicts with the White House, stating their commitment to the crypto industry is part of a unique synergy with Hut 8.
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