Crypto analyst Adam Cochran recently caused a stir in the cryptocurrency community when he drew attention to a series of TrueUSD (TUSD) trades made by Tron founder Justin Sun.
Cochran marked a series of transactions made by Sun’s address on the Tron blockchain, including minting $62 million in TUSD, withdrawing $50 million in USDT from Huobi, and depositing $50 million in USDT on Bitfinex.
Justin Sun’s questionable TUSD trades
Perhaps most concerning, however, was Sun’s apparent burn of $50 million TUSD, which Cochran suggested could be an attempt to temporarily “snapshot or settle” debt using a “fake” balance that was “unsupported.”
Cochran also pointed out that Sun appeared to be using Poloniex and Huobi as his own “savings banks” to borrow against, plowing large amounts of Huobi assets into JustLend – an official lending platform on the TRON blockchain – so he could borrow against shitcoins.
These transactions have raised questions about Sun’s motivations and the potential impact of his actions on the broader cryptocurrency market. In particular, Cochran expressed concern that Sun’s apparent “manipulation” of TUSD could create the appearance of more liquidity in the market and potentially lead to price manipulation.
This concern is compounded by the fact that Changpeng Zhao, the CEO of Binance, one of the world’s largest cryptocurrency exchanges, has reportedly offered voluntary termination packages to employees across multiple departments.
This move has raised questions about Binance’s financial stability and potential exposure to Sun’s actions. Cochran concluded:
CZ offered “voluntary termination” offers to multiple departments where any employee could apply today to resign, sign a new non-disclosure agreement and receive 3 months’ severance pay. Quite normal to do after major cutbacks….
The uncertainty of Justin Sun’s cryptocurrency moves
The potential risks of Justin Sun’s trades are unclear, as his motivations for these actions are unknown. However, several potential concerns have been raised in the crypto community.
A potential risk is the possibility of price manipulation. If Sun were to attempt to manipulate the price of specific cryptocurrencies by creating the appearance of more liquidity in the market, it could lead to price distortions that could hurt investors and destabilize the market.
Another risk is the possibility of a liquidity crisis. If Sun’s actions caused a sudden influx of TUSD or USDT into the market, it could lead to a sudden drop in the value of these cryptocurrencies, potentially causing a liquidity crisis and hurting investors.
There is also a risk that Sun’s actions could spill over into the broader cryptocurrency market, potentially panicking other investors or leading to a wider sell-off.
Finally, there is a risk that Sun’s actions could lead to regulatory scrutiny or legal action, especially if it is found to have engaged in illegal or unethical conduct. This could damage the reputation of the cryptocurrency industry as a whole and lead to increased regulatory oversight.
Despite these concerns, it remains unclear exactly what Sun intended with the transactions put forward by Cochran.
Featured image of Unsplash, chart from TradingView.com
