Justin Sun: Serious allegations against TRON founders

Modesty isn’t one of Justin Sun’s virtues. With his self-absorbed demeanor, various rhetorical failures and penchant for a swanky lifestyle, the entrepreneur has not only made friends in the crypto community. The 31-year-old likes to show what he has – he prefers to keep quiet about how he got it. With actions such as the investor brunch with Warren Buffett, which was announced as a “big deal” for TRON, or the tasteless disappointment that the Ukrainian government did not carry out an airdrop for TRON holders, Sun has not gained any sympathy points. But none of that is criminal. Contrary to the allegations that the journalist Christopher Harland-Dunaway is now leveling at the founder of the crypto platform TRON raises.

A life in loopholes

Justin Sun’s path begins in 2017. It’s the time of the many ICOs that make the cash register ring in the crypto market with projects that have been pounded out of the ground overnight. And a time when it was not yet entirely clear how token sales, which are comparable to IPOs, are to be classified legally. As an employee at Ripple Labs, Justin Sun had already gained some experience in the crypto sector, but then started his own project, which was intended to decentralize the Internet from the ground up: TRON.

A promise that works. TRON has an extremely successful ICO, the campaign brought in around 70 million US dollars. Justin Sun is still in his home country of China, but dark clouds are gathering there. The government arranges for an ICO ban, but Sun still pushes through the ICO – and is already planning its escape route. Supposedly Sun should get a tip from binanceCEO Changpeng Zhao and ended the ICO one day before it was officially banned. The suitcases for the flight to San Francisco are already there.

Next stop: BitTorrent

Justin Sun arrives in the US with a strong tailwind. The TRX course went through the roof, the market capitalization rose to over three billion US dollars in a short time, almost half of which went to the Tron Foundation. Sun is already preparing his next move: for 140 million US dollars he acquires the San Francisco-based company BitTorrent, publisher of the P2P file-sharing protocol of the same name.

A takeover with taste: Because the BitTorrent management met with other interested parties, Sun is said to have obtained an injunction. The deal did come about, but in retrospect it probably didn’t go smoothly. “Anybody know if Justin Sun is short on cash?” BitTorrent founder Bram Cohen asked the Twitter community in July 2019, the tweet alluding to the Tron Foundation’s pending payments to BittTorrent. At the time, allegations of course manipulation around Sun, the TRX course and BitTorrent tokens were already being made.

Insider trading for fast money

These allegations should continue to intensify. Christopher Harland-Dunaway claims to have learned from the closer circle of employees that Justin Sun had instructed Sun token purchases shortly before the company went public with positive news – in order to then sell the tokens at high profits. A practice known as insider trading, which is punishable with good reason.

At the latest, Justin Sun seems to be using every means to ensure success. Ex-employees report a climate of fear, and Sun, who has since returned to China to set up a “market-making team” there – a rogue who thinks ill of it – has now referred to himself in conferences as “chairman Mao” have spoken.

Justin Sun buys Poloniex

Next on the shopping list was Poloniex. A crypto exchange with a dubious reputation. A former employee described the operation, in which pump-and-dump methods were said to have been the order of the day, as a “shitcoin casino numero uno”.

Poloniex was turned inside out in 2018 when it was bought by Circle, which wanted to rehabilitate the exchange with KYC procedures. However, the success was modest: The trading volume collapsed with the introduction of the legitimation check. However, Justin Sun apparently recognized the missing piece of the jigsaw puzzle in Poloniex in his company network – and took over the shop.

Moving to the Seychelles

Sun eventually relocated Poloniex to the Seychelles. He still denies that to this day. A To write of the Ontario Securities Commission, in which the authority accused Poloniex of unauthorized securities transactions, speaks clearly: “Poloniex is a company incorporated under the laws of the Republic of Seychelles”. The choice should not only have fallen on the island state because of the dream beaches.

In order to boost the flow of users again, Justin Sun is said to have instructed the KYC process to be softened. “Fake the KYC!” he is said to have once said, according to former employees. Poloniex finally introduced an automated KYC process, which probably didn’t see it as closely related to identification.

Lucrative treasure trove

Now it’s getting dirty(er): According to Christopher Harland-Dunaway, Justin Sun is said to have initiated “Operation Couch Cushions” – essentially stealing funds from Poloniex users. For years, Bitcoin is said to have been sent to wallets that could only receive tether. The transactions were blocked, but the Bitcoin was no longer accessible. Considerable sums of money are said to have accumulated over the years. About 300 Bitcoin are said to have been tapped in this way, the trail of which is ultimately lost in a joint Poloniex wallet.

Haven Malta

Just as Sun conceals his assets – he is said to have 13 accounts in the US alone – he also covers up his residences. Sun bought citizenship for Malta – including eight Maltese bank accounts. For obvious reasons: “He thought taxes were stupid,” a Sun employee reportedly said. He is also a citizen of the Caribbean islands of St. Kitts and Nevis. Sun is also said to have bought a passport for the West African country of Guinea-Bissau.

Gradually, however, he was caught in the crosshairs of the Chinese authorities. Sun’s circumvention of China’s ICO ban should catch up with him. Six Tron employees were arrested in China and the investor meeting with Warren Buffett was canceled because Justin Sun was said to have been detained by Chinese authorities.

authorities in the neck

After his stay in China, where Justin Sun is said to have been soft-boiled according to all the rules of the repressive apparatus, he finally returned to San Francisco, but left the US just before the pandemic and never returned. Allegedly, the FBI, SCE and IRS are investigating Sun. There are allegations of money laundering, unauthorized securities issue and fraud.

Meanwhile, Sun, whose personal fortune is estimated at $300 million, is Grenada’s ambassador to the World Trade Organization. Probably mainly for marketing reasons for Tron, but also for tactical reasons to gain diplomatic immunity.

A request for a statement from TRON and Poloniex on the allegations remained unanswered at the time of going to press.