Tron Leads Altcoin Selloff amid Founder Controversy
Tron’s TRX token was under heavy selling pressure Tuesday amid allegations that founder Justin Sun was involved in some unscrupulous dealings involving illegal fundraising and money laundering.
Tron was easily the worst-performing major cryptocurrency on Tuesday, falling 18.5% to $0.0233. The eleventh-largest cryptoasset by market cap is currently trading at session lows.
The TRX price briefly returned above the 3-cent mark on Saturday before correcting lower. A second attempt to reclaim that level on Sunday also fell short, giving rise to the latest selloff. The token is down a whopping 42% from its most recent high set in early June.
Tron has also declined sharply against bitcoin, with the TRX/BTC exchange rate falling 15.4% to 0.00000234. The Tron-bitcoin cross has shed more than 53% since the start of the year.
At current values, Tron’s market capitalization is worth $1.6 billion. Daily trade volumes were reported at $700 million.
Altcoins and tokens were down more than $2 billion on Tuesday, likely in response to bitcoin’s sudden technical correction. All major cryptocurrencies in the top-20 were trading lower.
Justin Sun Faces Allegations
Tron’s lop-sided declines were partly attributed to new allegations levied at founder and CEO Justin Sun.
Citing unspecified sources, China’s 21st Century Business Herald claims that Sun was involved in several illegal transactions ranging from fundraising to pornography and up to money laundering.
Sun denied the allegations on Weibo, one of China’s largest social media sites.
The biggest source of concern for Tron holders was the accusation that Sun raised funds illegally in China, a country that banned initial coin offerings back in September 2017. Sun said the Tron Foundation reimbursed all Chinese investors following the ban.
Earlier in the day, it was confirmed that Sun’s $4.57 million charity lunch with billionaire investor Warren Buffett was postponed due to illness.
“TRON Foundation announces postponement of Warren Buffett lunch, press conferences after founder Justin Sun falls ill with kidney stones,” the foundation tweeted Tuesday.
TRON Foundation announces postponement of Warren Buffett lunch, press conferences after founder Justin Sun falls ill with kidney stones. Parties agreed to reschedule at a later date. @GLIDEsf @WarrenBuffett
— TRON Foundation (@Tronfoundation) July 22, 2019
Sun is one of the most polarizing figures in the crypto community, having been accused of plagiarism, overhyping Tron and exaggerating industry partnerships. But he managed to silence many of his detractors last year by doling out $140 million to acquire BitTorrent, the popular peer-to-peer file-sharing system.
Through BitTorrent, Sun hopes to build out Tron’s decentralized content platform without side-stepping regulations. Earlier this year, Sun told VentureBeat he intends to work with federal agencies in the United States, China, South Korea and Japan to ensure regulatory compliance.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via CoinMarketCap.