The Tron Network Scandal: Uncovered Mismanagement and Uncovered Bitcoin
Recently, Justin Sun, the founder of Tron (TRX), has come under the spotlight in the cryptocurrency industry once again, but for all the wrong reasons. There are alarming reports surfacing that suggest tens of thousands of bitcoins on the Tron network are not adequately backed, potentially leading to a massive crypto scandal.
Uncovered Bitcoin: 60,000 BTC Uncovered on Tron Network
On August 21, 2022, it was alleged that 60,000 bitcoins were minted on the Tron network. These bitcoins are then locked and assigned a TRC-20 version on the Tron blockchain. While token minting is common in the world of blockchain, it is essential for the tokens to be fully backed. In this case, there should be at least 60,000 BTC held by the Tron network, currently valued at $1.8 billion.
However, crypto researcher ErgoBTC has discovered alarming information regarding the coverage of these 60,000 BTC. After an extensive investigation, he reveals that there is no transparency regarding the coverage of these bitcoin on the Tron network. The total supply of BTC on Tron, including the 60,000 minted last year, is 114,000 BTC. However, there is no evidence of any Bitcoin addresses holding coins that cover this entire amount.
What’s Happening with Tron?
But that’s not all. After the minting of the 60,000 BTC, suspicious transactions involving hundreds of millions of dollars in stablecoins have taken place. These tokens were parked on Tron’s DeFi platform, JustLend, as collateral for a $600 million loan in USDC. Within two hours, $300 million of the loan was repaid. The addresses associated with these transactions are linked to Justin Sun himself, creating an incredibly suspicious situation with Sun at the center of it all.
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Furthermore, a week later, the crypto exchange Huobi was allegedly sold to Sun. Speculations arise concerning Sun’s motives and actions. Well-known researcher Adam Cochran speculates that Sun used fake assets to acquire Huobi and is now using assets from users of Huobi and Poloniex, either by depositing them into his JustLend platform or staking them and keeping the returns for himself. Cochran calls this behavior absurd.
In the midst of all this, another researcher conducted an in-depth analysis and came to a similar conclusion. According to his findings, this situation appears to be a large-scale money laundering operation and a scam. ErgoBTC provides a more nuanced perspective, stating that the absence of proof is not proof of absence. However, he does conclude that something is seriously wrong and over $1 billion worth of BTC on the JustLend platform is apparently not properly backed.
The Tron network scandal surrounding Justin Sun continues to unfold, raising serious concerns about mismanagement and the lack of transparency regarding the coverage of bitcoins on the Tron network. As the crypto community awaits further investigations and responses, the credibility of Tron and its founder lies in the balance. It remains to be seen how this scandal will impact the future of Tron and the broader cryptocurrency industry.