LeoGlossary: Justin Sun
Justin Sun is a Chinese businessman and cryptocurrency entrepreneur. He was born July 30, 1990.
He holds a Bachelor of Arts degree with a major in history from Peking University and a Master of Arts degree in East Asian studies from the University of Pennsylvania.
At University of Pennsylvania Sun became interested in cryptocurrency and invested early in Bitcoin. He studied at Jack Ma's Zhejiang Hupan Entrepreneurship Research Center.
In 2017, he founded TRON, a blockchain that was a fork of Ethereum. Sun received a lot of criticism for lacking any innovation and basically copying everything from Ethereum, including the white paper. He simply changed the name "Ethereum" to "TRON" in the documentation.
BitTorrent
It was announced in June 2018 that Sun and Tron were purchasing BitTorent for $140 million in cash. This was one of the early enterprises in decentralized computing.
At the time of the sale, BitTorrent has 170 million users. It was believed the protocols moved around 40% of the Internet traffic.
Accusations ensued that Sun was centralizing the decentralized computer network by incorporating it all under his control.
Sun retired as CEO of TRON in December 2021 and became the Permanent Representative of Grenada to the World Trade Organization (WTO). He was relieved of his position in June 2022.
Steem Takeover
He made news again in 2020 when he launched a hostile takeover of Steem, a social media blockchain. Sun was able to buy out a pre-mine stake that accompanied the purchase of the founding company, Steemit, Inc. This gave him a large interest which to vote for the block producers, called Witnesses.
The fight garnered the attention of the cryptocurrency community as people watched what would happen with an alien invasion. Sun put together a classic money attack although he was not buying on the open market. Instead, he was able to attain stake that was previously promised to the community to fund development.
By utilizing this holding, he was able to take control of the network from the community, a move that resulted in the later forking into what is now Hive. Many of the applications that were tied to Steem ended up moving to the new chain.
The community put up a good fight, eventually losing when the exchanges staked customer funds and involved themselves with governance. This pushed the control to Sun, a move that led to him freezing the wallets of many of the larger holders, called whales.
Publicity
Justin Sun is a magnet for attention. Over the years he acquired a reputation for having some marketing skills although many feel he is self serving and nothing but a fraud.
Whatever the outlook, he has made a name for himself with his antics.
In 2019, Sun bid $4.6 million to have lunch with Warren Buffett. In a surprise move, he cancelled the lunch, before eventually meeting with the Berkshire Hathaway CEO.
March 2021 saw Sun as the underbidder on the historic $69M auction at Christie's New York of the Beeple non-fungible token (NFT) Everydays: the First 5000 Days.
He then went on to place the winning bid to become the first paying passenger on Blue Origin's commercial space flight. This was scheduled for July 2021 but he had to cancel due to a scheduling conflict.
Securities And Exchange Lawsuit
On March 22, 2023, the Securities and Exchange Commission (SEC), under Chair Gary Gensler, sued Sun and three of his companies.
The companies are:
Tron Foundation Limited BitTorrent Foundation Ltd. Rainberry Inc. (formerly BitTorrent)
They were charged with the unregistered offer and sale of Tronix (TRX) and BitTorrent (BTT). The agency is taking the approach these assets are securities, requiring registration according to U.S. Securities laws.
Sun and his companies were also charged with fraudulently manipulating the secondary market for TRX through extensive wash trading. This involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership.
A final charge is that Sun and his companies paid celebrities for promotion without disclosure.
Also charged were:
Lindsay Lohan
Jake Paul
DeAndre Cortez Way (Soulja Boy)
Austin Mahone
Michele Mason (Kendra Lust)
Miles Parks McCollum (Lil Yachty)
Shaffer Smith (Ne-Yo)
Aliaune Thiam (Akon)
They were charged with illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation.
With the exception of Cortez Way and Mahone, the celebrities charged agreed to a payment of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.
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