Tron co-founder accused of printing TUSD out of ‘thin air’

Jul 22, 2023 at 9:12 AM UTC

Edited by Dalmas Ngetich

News

Tron co-founder accused of printing TUSD out of ‘thin air’

Tron co-founder, Justin Sun, is facing more allegations of engaging in questionable tactics to mint TUSD out of “thin air,” reportedly using deposits from two exchanges, Huobi and Poloniex.

Recent on-chain data from Sun’s verified address, “TT2T17…U9N”, on Tron reveals that he minted $62 million in TUSD on July 21, 2023, withdrew $50 million in USDT from Huobi before proceeding to deposit $50 million USDT to Bitfinex.

Afterward, he burned $50 million TUSD and added $50 million USDT and $12 million TUSD to JustLend, a top DeFi protocol on Tron. TUSD is a stablecoin that tracks the value of USD.

The instant minting and burning of TUSD have raised concerns about the intention of Sun. Observers on Twitter said there was no apparent explanation from Sun to mint TUSD before instantly burning them.

Adam Cochran, a vocal crypto analyst, speculates that unless Justin Sun used “the fake balance to snapshot or unwind debt temporarily and it was unbacked,” meaning the controversial Tron co-founder might be using Poloniex and Huobi assets to mint TUSD “out of thin air.”

1/3

Like wtf Justin, just out in the open

Justin Sun's address on Tron (TT2T17KZhoDu47i2E4FWxfG79zdkEWkU9N)

-Mints $62M TUSD
-Withdraw's $50M in USDT from Huobi.
-Deposits $50M UDST into Bitfinex
-Burns $50M TUSD
-Deposits $50M USDT and $12M TUSD into JustLend https://t.co/0rHY5LABdW pic.twitter.com/KI34oLp7em
— Adam Cochran (adamscochran.eth) (@adamscochran) July 20, 2023

Cochran also seems to be castigating Justin Sun for what he claims to be using Huobi and Poloniex as two of his “piggy banks” since user assets are allegedly being “plowed” into JustLend for him to borrow more coins.

Justin Sun has not responded to these allegations.

In March 2023, the Securities and Exchange Commission (SEC) charged Sun and three of his companies – Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent) – for allegedly selling unregistered securities in TRX and BitTorrent’s BTT.

Sun and his companies were also charged with market manipulation through extensive wash trading and orchestrating a scheme to pay celebrities to promote TRX and BTT without disclosing their compensation.

The SEC claims the Tron co-founder directed his employees to engage in over 600,000 wash trades of TRX, generating proceeds of $31 million from illegal, unregistered offers and sales of the token.