- Justin Sun denies the existence of an investigation against the TRON Foundation in China or the United States.
- According to the CEO, no entity or individual can take full control of the TRON network.
The consequences of the SEC lawsuit against Ripple Labs are still one of the hottest topics in the crypto community. A much discussed scenario is the extension of the charges to entities and tokens other than XRP. USDT, Chainlink, Binance Coin, and TRON are among the possible candidates for sanctions according to speculations.
Tron Foundation CEO Justin Sun has now spoken out on Twitter to clear up the rumors. Sun denied all speculations as false and said that there is no investigation against the Tron Foundation, TRX, BitTorrent, himself, or any affiliated entity by any of the regulatory institutions in the United States or China.
In his statement, Sun said TRON is a decentralized network of “18 million accounts and 27 super representatives”. The network’s governance and operating model prevents any individual or entity from having control over the network, according to Sun. In that sense, the CEO of the Tron Foundation emphasized:
(…) neither the TRON foundation, any of its directors (such as myself), nor any single validator gets to control the network, determine who uses the network, or how tokens are traded. The TRON Foundation is one of thousands of contributors to the network.
Sun also denied that there is centralization of the network or any single point of failure that would allow “one person or entity” to bring down the system. Tron Foundation’s CEO seems to have reacted specifically to a report by Cinneamhain Ventures partner Adam Cochran.
(5/6) To the contrary, the #TRON network has been successfully operated by its super representatives for over 2.5 years and has not encountered any significant downtimes. Neither @TRONFoundation nor any of its affiliates is currently involved in any regulatory proceeding.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) January 5, 2021
Is TRON (TRX) a security for the SEC?
According to the report, the U.S. Securities and Exchange Commission (SEC) may have grounds to charge Sun for its relationship with two U.S.-based companies: BitTorrent and Poloniex. After Sun became an investor in Poloniex, according to Cochran, products were created that allowed trading with leverage and the deposit or withdrawal of amounts greater than $10,000. In addition, Poloniex listed a variety of TRC20 tokens.
Cochran indicates that BitTorrent still operates mostly from San Francisco, USA, and points out that Sun makes frequent trips to the headquarters located in that state. Therefore, if it is proven that Poloniex has users in the United States, the authorities in that country could apply the same criteria they used to go against the exchange BitMEX, as Cochran stated:
It is unclear exactly what the on-going investigations are, but based on some of the rumors and the info laid out here, it does seem plausible that Tron has US exposure that may expose them to US regulators more than they realize.
However, it should be noted that Cochran has been careful with his claims and made it clear that the information he has given still requires a stronger foundation and further investigation. The expert also considers that there is no point of comparison between the SEC case against Ripple Labs.
Tron Foundation’s CEO responded to Cochran’s comments and indicated that efforts to “limit” false news should be increased. Sun said he understands that there are answers to be given to “important questions” and pledged to be “as transparent as we can”.
@AdamScochran We appreciate working together to limit FUD. It’s unfortunate how information can be distorted and blown out of proportion in our industry. We look forward to working together to building industry that is stronger and more resilient to short termism and speculation.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) January 5, 2021
