Report: Justin Sun accused of insider trading and gaming the crypto market system
According to the report, Justin Sun was said to have converted roughly 300 BTC of Poloniex users funds for his personal use.
Cover art/illustration via CryptoSlate
A new investigative report published on The Verge has linked crypto mogul Justin Sun to many infractions.
According to the piece, Sun, who co-founded Tron and also owns BitTorrent and Poloniex, has broken almost every rule in the book since he started his crypto journey.
The many sins of Justin Sun
The controversial CEO has been embroiled in several controversies from tax evasions to market manipulation since 2017. After Tron ICO forced him to leave China, his actions in the US at the helm of BitTorrent and Poloniex could make him liable for prosecution.
The article, written by Christopher Harland-Dunaway, describes Sun as an escape artist who always managed to find his way out of legal troubles.
According to the journalist, several former and current employees and official documents confirm these allegations against the Tron founder.
One of such allegations is insider trading, the report alleges that Tron’s market-making team bought large amounts of the tokens when Tron had a positive public announcement.
This pushed up the price, making it possible to sell at a major profit. This kind of market manipulation is illegal with stock trading and might lead to liability in crypto trading.
Some former employees also accused him of being domineering and sometimes ordering illegalities. According to a former employee, when Sun wanted to launch the BitTorrent Token, he wanted to avoid liability by describing it as a utility token.
Thus, he asked the chief compliance officer for BitTorrent, David Labhart, to draft a document showing BTT was a utility token and not security. Although Labhart refused to do this, Sun still launched the token by airdropping it to BitTorrent users.
The article also detailed the multiple bank accounts linked to Sun and his citizenship in several countries as an attempt to escape any prosecution.
Sun allegedly took control of $11 million worth of Bitcoin belonging to Poloniex users
Another allegation is that his crypto exchange, Poloniex, was involved in shady and risky activities. These include being registered in Seychelles islands to evade liability despite most of the workers being in Boston and lowering the KYC standards.
Also, Sun, using a project tagged “Operation Couch Cushions” was said to have recovered roughly 300 BTC belonging to the users of the exchange but converted them for his personal use by obscuring the transaction trail of the coins.
Sun threatens to sue
However, Sun has responded to claims in the article stating that most were fabricated. According to him, Poloniex is a secure exchange that uses the best state of the art KYC technologies. He also added that Poloniex isn’t registered in Seychelles, and the exchange doesn’t operate in the US.
He added that as the ambassador of Grenada to the World Trade Organization, he upholds the highest standards in all of his dealings. He also mentioned the possibility of pursuing legal remedies.
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