JUSTIN SUN IN HOT WATER
Cryptocurrency

Justin Sun Under Fire After Chinese Ponzi Scheme Takes at Least $30m

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Yesterday, 9th July 2019, Yahoo Finance reported that a Chinese Ponzi scheme had exited with over $30m in stolen funds. The scammers managed to con “hundreds of thousands” of people out of their money, before shutting up shop out of nowhere.

Since the exit of the scammers the Tron community has been vocally incensed at Justin Sun, Tron Founder & CEO. This is because, according to some victims, the community asked Justin Sun to clarify the legitimacy of the so-called company multiple times. But he failed to even respond.

Infuriatingly, Justin Sun took the time to respond to the incident on July 1st… the day after the scammers exited. He took to Chinese social network, Weibo, to make a post: view here.

After using Google translate it seems as though Justin’s reply is essentially saying “shit happens”. There isn’t an apology (from what I can see), he fails to even mention the “Wave Field Super Community” by name, and there aren’t any indications of plans to prevent this happening again.

This complete lack of compassion has many of those affected by the scam seeking for justice. Members of the community believe that Justin’s reluctance to respond, when asked about the community’s legitimacy, makes him complicit through silence. And they have a point.

If it can be proven that he knew about the scam it would raise a lot of questions. Why would he fail to protect his community/investors? Why has he failed to acknowledge the scam at all?

One this is for sure, while the scam was occurring the Tron network will most certainly have felt some benefits. The affect of people investing in the fake community would be such that the TRX blockchain’s throughput & liquidity would have improved.

How It Happened

The scam saw a fake company claim to be one of the 27 ‘Super Representatives’ (SR) on the Tron . Tron’s SRs are TRX’s answer to EOS’s block producers. They are expected to operate nodes and are paid in tokens for doing so.

According to the Tron documentation, the 27 elected SRs will share 336,384,000 TRX per year. At today’s price (~$0.034) that is a staggering ~$11,437,056 in total, and ~$423,594.67 per SR.

Using this information the scammers created a fake online identity called “Wave Field Super Community” (Tron is Wave Field in China) and asked Tron holders to invest TRX. They then promised to provide returns on investments out of the SR block rewards.

After collecting over $30 million USD in TRX tokens the scammers essentially disappeared into thin air. Make no mistake, this was another, albeit elaborate, exit scam. The worst part is it was entirely preventable.

Love, peace and happiness.