News Summary
- Justin Sun one day before the ICO bans in China in 2017 Tron released his altcoin via ICO method and left China.
- Sun teamed up in China to buy massive amounts of TRX ahead of the good news about Tron to be made public, and profited millions of dollars from ‘insider trading’. from events BitTorrent Managers were also aware.
- Sun bought cryptocurrency moved its exchange Poloniex to Seychelles, mediating the illegal cryptocurrency trade. In addition, the stock market has been missing for years. Bitcoins He also transferred it to his personal account.
- Sun bought Maltese citizenship in case he had to leave the US. Sun used his bank accounts in this country to evade taxes.
In the article published on The Verge, Justin Sun’s adventures since 2017 and his past that can be described as illegal were examined.
Sun Launches Tron (TRX) Altcoin Just Before 2017 ICO Ban
Chinese cryptocurrency figure Justin Sun was walking down the outbound aisle of South Korea’s Incheon International Airport in September 2017.
In the days when the cryptocurrency craze was on the rise, Sun seemed rightfully worried after holding his first ICO. The ICO, which can be translated into Turkish as “first coin offering”, has a similar meaning to the first public offering of stocks.
Thanks to ICOs, investors have the opportunity to purchase a brand new token. However, Sun’s concern was not the money he would make if this ICO event was successful, or the money he would lose if it failed.
His own company, Tron, launched a new coin called TRX and successfully sold $70 million in sales. Sun’s concern was with the Chinese government. China had completely banned ICOs days before Sun’s ICO event.
China cited ICOs as a vehicle for financial fraud, pyramid schemes, and other illegal and criminal activities.
In fact, there was some truth to these claims. In 2017, hundreds of new and obscure coins were being released within days. In these ICOs, people were buying new coins because their Blockchain technology showed promise or because they believed their value would increase too much.
However, as we understand from many events that took place at that time, the developers of many of these new projects sold all the tokens right after the ICO event and made a huge fortune.
Of course, in doing so, it caused other investors’ investments to flake. These were called “exit scams” or “pump-dump” and crypto investors lost billions of dollars in these events.
People were scammed so often that the SEC couldn’t even keep up with filing a criminal complaint. The Chinese ban was also the reason why Sun was waiting for the flight at Incheon International Airport.
Sources who heard from him at the time said that Justin Sun believed he was a fugitive and thought he should flee immediately.
How Sun got to Seoul from Beijing remains a mystery. Despite this, the reason why he was able to make this escape was quite simple: He knew that an ICO ban would come in his country, and yet he held the event anyway.
15 Different Sun-Linked Sources Speak to The Verge
In this article published on The Verge, author Christopher Harland-Dunaway states that he spoke to 15 different sources.
However, sources have requested anonymity in case Justin Sun takes revenge. The sources were revealed to be current and former employees of Sun’s cryptocurrency empire in the US and China.
This story is also evidenced by hundreds of pages of Tron’s internal documents, the author said. Sources shed light on the financial relationships of Sun and his company. The author reported that some of the sources in question told him that they were risking their lives by speaking to him.
Sun, who was contacted, did not respond to the allegations in any way, despite persistent questions. Law firm Harder LLP, litigation counsel for Sun’s companies, responded, “This story is another attempt by Mr. Harland-Dunaway to tarnish Justin Sun’s reputation. Poloniex and BitTorrent will not honor the author of the article by responding to these allegations.”
In addition, the author said that BitTorrent and Tron company revisited 18 current and former employees.
Sources have portrayed Justin Sun’s thirst for success, a man whose energy has no limits, no empathy for his employees, and using tactics and technologies he shouldn’t be using related to the US-China trade war. But this was not about the cryptocurrency world that fueled Sun’s empire.
That’s why the author started following Justin Sun’s funds.
Arriving in San Francisco from Seoul, Sun was hiding in an apartment for fear of being handed over to the Chinese authorities.
A few months later, the value of Tron’s TRX token skyrocketed. After that, Sun started using his last fortune. Using Hong-based company Davidyo Limited, Sun transferred millions of dollars to his bank account in the USA.
He used some of the money to buy a luxury SUV. Months later, Sun visited BitTorent’s headquarters in San Francisco. Sun bought BitTorrent, one of the most famous companies producing decentralized file sharing software, for $140 million.
At the San Francisco branch of the Tron company, he was telling his sad story as a businessman who escaped from communist China and came to the United States to realize his capitalist goals.
However, after this, Sun made a sudden decision to add a “Chinese” image to his company. Sun has decided to formalize the relationship between BitTorrent and Tron at Tron’s Beijing office. According to sources, Sun was returning to China months later.
“Justin Sun Was Profiting By Buying TRX Before Tron News”
According to sources, BitTorrent CFO Dipak Joshi looked rather worried after Sun’s visit to Beijing. Returning to San Francisco, Dipak told one of the company’s employees a secret about the activities of Sun’s China office:
“Sun told me the team in Beijing had set up an ‘insider trading’ team.”
The former employee of the company claimed that the China branch’s job was to “keep the TRX price at the level Justin wanted”:
“Sun told the China team to buy TRX before Tron brings the good news to the market. After Tron announced the good news to everyone, the price of the token would increase, and after that, the selling team would make a big profit. All this time he was trading insiders.”
After that, Justin Sun, who was afraid of being accused by the SEC for selling securities unregistered, allegedly focused on attorney David Labhart, who was a member of the SEC compliance department. To make sure TRX was not considered a security, Sun hired Labhart.
Sun, who had recruited Labhart, looked emboldened. Days after this event, another ICO was held. ICOs were not banned in the US as they were in China. new altcoin its name was BitTorrent Token (BTT).
According to sources, Sun asked Labhart to write a legal opinion that would protect him in the future if he was accused of recklessly selling securities. The company announced that the BTT token will be distributed free of charge to everyone in an “airdrop” form. Thinking the situation was dangerous, Labhart resigned from his post.
One of the company’s former employees said he thought Justin might be in trouble, but he didn’t seem to care. Sun commissioned the Chinese team to make the airdrop happen.
After that, Sun made a radical decision and announced that it had bought the crypto exchange Poloniex.
Former employees of the company made the following statements on the subject:
“Poloniex was extremely popular and a risky place to trade cryptocurrencies. The platform was running on insecure code. This cryptocurrency exchange used to be known as a platform where shitcoins debuted. They were listing all cryptocurrencies without question. People were constantly applying pump-dump schemes on this exchange. It was like the wild west of cryptocurrencies.”
Poloniex, which was acquired by the cryptocurrency company Circle in 2018, experienced a huge drop in trading volume after the introduction of KYC rules.
Since KYC rules require investors to share their identity information, people who seemed banned in the international financial system could no longer trade cryptocurrencies on this platform.
“Sun De facto Eliminates Poloniex’s KYC Rules”
Allegedly, Justin Sun, who bought the company, wanted this cryptocurrency exchange to return to its old illegal days. After that, Sun moved Poloniex to the island nation of Seychelles.
There were almost no rules for cryptocurrency exchanges in this country. The company’s 50 to 70 employees in the USA were transferred to the company named Augustech to the Poloniex stock exchange in Seychelles “to provide technology and IT services”.
Thus, customers who wanted to sue Poloniex would have to do so by going to the court in Seychelles.
Token listing requirements on Poloniex have been relaxed. After that, according to the allegations, Justin Sun wanted the KYC rules on the cryptocurrency exchange to be removed as well.
Thereupon, an automated KYC system was created on Poloniex. According to former employees’ claims, this system was designed to accept all identities, no matter what information or photos were on it.
“Lost Bitcoins of Users Transferred to Justin Sun’s Personal Account”
Sources reached by the author said that the Poloniex exchange eventually became Sun’s personal bank.
In addition, over the years, people had sent Bitcoin instead of USDT to this cryptocurrency exchange, and thus lost their money.
After Sun acquired the company, he learned that there was a way to get these cryptocurrencies back.
These Bitcoins, which correspond to serious amounts in total, were removed from the places where they were locked by the company engineers in line with Justin Sun’s orders.
According to the sources, the voices of objection began to rise as the employees in the company became aware of the existence of these Bitcoins. As a result, these cryptocurrencies did not belong to the company.
When the company engineers found all the lost Bitcoins, it was understood that they were 300 BTC, which corresponds to a total of approximately 20 million dollars.
Later, it turned out that Justin Sun wanted these BTCs for himself. According to a former employee, Sun constantly asked company engineers, “Where are my 300 Bitcoins?” he pressed.
After 4 hours of work, hundreds of transactions were processed and all Bitcoins in old Tether wallets were extracted. After that, the collected BTCs were sent to an anonymous wallet.
Afterwards, it was sent from this anonymous wallet to Poloniex’s commercial wallets. The author later stated that these Bitcoins were mixed into the transactions made by the users and lost their trace.
In addition, sources also stated that Justin Sun bought Maltese citizenship in case he could not set foot in the USA one day.
Reply to Allegations from Sun
Sun was quick to respond to the allegations made on The Verge.
Sun said that all crypto funds on the Poloniex exchange are safe. In addition, Tron CEO claimed that The Verge writer was running a smear campaign on the Poloniex exchange.
Initial response to the false accusations and fabricated storytelling of the verge article.
— HE Justin Sun 🅣🌞🇬🇩 (@justinsuntron) March 9, 2022
Additionally, Sun said that KYC measures on the Poloniex exchange are in line with industry standards.
It also stated that the Poloniex exchange is not registered in Seychelles and does not serve US customers. Sun concluded his statement by stating that he reserves his right to take legal action.
*Not investment advice.