Trump's Crypto Empire Fully Revealed! DAT Company Raises $20 Billion in a Frenzy, Concealing Deadly Risks

Donald Trump claims to be the first crypto president, ending regulatory suppression and launching TRUMP meme coins. Under his policy endorsement, over 250 publicly listed companies have begun accumulating cryptocurrencies, and these DAT (Digital Asset Vault) companies have planned to borrow over $20 billion. However, the October flash crash led to the liquidation of leveraged bets totaling $19 billion, affecting 1.6 million traders, with some company stocks plunging over 80%.

From Regulatory Suppression to White House-Backed Policy Shift

The wave of crypto enthusiasm driven by Trump has propelled the relatively marginal digital currency world into a position of significant importance in the global economy. After years of legal battles with the industry, the U.S. Securities and Exchange Commission (SEC) established a dedicated crypto task force in January this year, holding dozens of meetings with companies seeking new regulations or product approvals. This 180-degree shift in regulatory attitude has opened unprecedented development opportunities for the industry.

Trump signed multiple pro-crypto legislations and publicly promoted crypto investments from the Oval Office. SEC Chairman Paul Atkins publicly expressed a positive attitude toward tokenized stocks, calling it a major technological advancement. In July, federal regulators withdrew previous guidance restricting high-leverage lending, enabling the largest compliant crypto exchanges in the U.S. to launch investment tools allowing traders to borrow up to 10 times their holdings.

This relaxed regulation has directly fostered a series of innovative crypto businesses pushing boundaries. Several companies have launched new products, making it easier to allocate crypto assets within brokerage accounts and retirement plans. Industry executives are also lobbying regulators to introduce tokens representing shares of publicly listed companies, and to facilitate trading in stock markets driven by crypto technology.

DAT Vault Company Frenzy and Accumulated Risks

The crypto community has dubbed this high-risk era promoted by Trump’s new government as the “Summer of DAT.” DAT, or Digital Asset Vault companies, refer to listed companies whose core goal is to purchase as many crypto assets as possible. According to data from crypto consulting firm Architect Partners, just under half of these companies primarily hold Bitcoin, but dozens have announced plans to accumulate lesser-known tokens like Dogecoin.

DAT Company Operating Models and Risks

1. Operation Path

· Target a lesser-known but already listed company

· Raise millions of dollars from wealthy investors

· Use funds to purchase digital currencies

· Indirectly expose investors to crypto price volatility

2. Core Risks

· Many companies are formed hastily, lacking experience in public company operations

· Overall, plans have been announced to borrow over $20 billion

· Leverage amplifies losses during market downturns

· Connections to traditional financial systems increase the risk of chain reactions

3. Typical Cases

· Forward Industries accumulates Solana tokens

· Raised over $1.6 billion from private investors in September

· Stock price once soared to $40 per share

· Fell to $7 per share this month, a decline of over 80%

These projects allow investors to buy targets that resemble traditional stocks, indirectly exposing them to crypto asset price fluctuations. Some investment funds and asset management firms have been reluctant to buy cryptocurrencies directly due to complex custody processes, high costs, and frequent theft or hacking attacks. By investing in DAT, fund managers can outsource these cumbersome operations.

However, DAT also carries significant risks. Timothy Frerichs, a former SEC crypto advisor, stated: “Financial crises often start with leverage, and what’s being created now is a mountain of leverage.” Miami-based investor Allen T, representing a family office, invested $2.5 million in Forward and has lost about $1.5 million so far. He said, “The music stopped, and now I’m hesitating—should I exit?”

October Flash Crash Reveals Systemic Fragility

Under Trump’s public support, the crypto market had been rising for most of this year. But on October 10, Bitcoin and Ethereum prices suddenly plummeted, with dozens of other tokens also falling sharply. The immediate trigger was Trump’s announcement of new tariffs on China, which shook the global economy. However, the heavier blow to crypto asset prices was due to the high levels of borrowing in the market.

According to data from crypto analytics firm Galaxy Research, in Q3 alone, global crypto-based lending increased by $20 billion, reaching a record total of $74 billion. On crypto trading platforms, traders can collateralize their assets to borrow cash or leverage further, making larger bets on digital currencies.

Mechanically, lending amplifies losses during market declines. When prices fall, exchanges are forced to sell clients’ collateral assets—known as liquidation—which often drives prices down further. Data from industry tracking firm CoinGlass shows that on October 10, at least $19 billion in leveraged crypto bets were forcibly liquidated worldwide, affecting 1.6 million traders.

This crash triggered a surge in trading volume, with some traders experiencing technical issues when trying to transfer funds across major exchanges. Derrick Batrin, a software engineer from Tennessee, said his exchange account was temporarily frozen. It felt like the largest compliant crypto exchange in the U.S. almost locked everyone out of their accounts, losing access to their rescue funds, and leaving them no choice but to ride the roller coaster. Over the following days, he lost about $50,000 worth of crypto assets.

Trump Family’s Crypto Business Empire

Many new enterprises are linked to Trump’s expanding crypto business empire, further blurring the lines between commerce and government. This summer, Trump’s crypto startup World Liberty Financial announced that its management would join the board of the publicly listed company ALT5 Sigma. The company previously operated in recycling, but now plans to raise $1.5 billion to purchase digital currencies.

According to revenue-sharing agreements published on World Liberty’s website, whenever WLFI tokens are traded, business entities affiliated with the Trump family can receive a portion of the profits. However, the situation with ALT5 Sigma has since deteriorated. In August, the company disclosed that an executive of one of its subsidiaries was convicted of money laundering in Rwanda. Since August, the stock price has fallen 85%.

Timothy Massad, former Assistant Secretary for Financial Stability at the U.S. Treasury after the 2008 financial crisis, said: “The line between betting, speculation, and investment has largely disappeared, which worries me greatly.” The latest products launched by the industry connect crypto assets with stocks and other parts of the financial system, increasing the risk of chain reactions, and a crypto crisis could spill over into the broader economy.