Justin Sun, don't run! Binance fell, Zhao Changpeng admitted defeat, are you next?

Following Binance’s $4.3 billion hemorrhage and its founder Zhao Changpeng pleading guilty and stepping down, the outside world joked that the pressure is now on Huobi HTX and Justin Sun!

On Tuesday afternoon, US time, CZ Zhao Changpeng, founder and CEO of Binance, left the federal court after pleading guilty in Seattle. According to the latest plea agreement, the sentence is expected to be no more than 18 months, and the sentencing will be postponed for 6 months.

On the day the incident happened, TRX founder Justin Sun sent his greetings to Changpeng Zhao as soon as possible: CZ has pushed the industry to unprecedented heights!

Sun Yuchen forwarded CZ's resignation statement on the social media platform and said, CZ, I have known you for nearly ten years, during which time you have played a leading role in the community, the industry, and for me. In the past six years, you founded Binance and pushed the entire industry to unprecedented heights.

This short article may be a moment of mutual sympathy that all builders in the industry have when facing difficulties!

However, many netizens have expressed concerns about his future, and some pranksters have even dug out a classic photo for everyone to revisit. The end of the cryptocurrency tycoon is prison, and the next one may be Justin Sun? !

Justin Sun was sued by the SEC and received a subpoena from a US court!

On March 22, the U.S. Securities and Exchange Commission (SEC) announced charges against Justin Sun and his three wholly-owned companies, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent), accusing them of offering and selling crypto asset securities Tronix (TRX) and BitTorrent (BTT) without registration.

According to the complaint, these unregistered offers and sales violated Section 5 of the Securities Act.

The SEC also accused Sun Yuchen of orchestrating a plan to artificially inflate the apparent trading volume of TRX in the secondary market, in violation of the anti-fraud and market manipulation provisions of federal securities laws. According to the SEC's complaint, what really drove the prices of TRX and BTT were "fake transactions," that is, market manipulation to drive the price of the coins. In response, Sun Yuchen said that the SEC's allegations were unfounded.

At the same time, eight celebrities were accused by the SEC of illegally selling TRX and/or BTT, six of whom paid a $400,000 fine to settle the charges.

Then on April 13, Sun Yuchen received a subpoena from a court in the Southern District of New York, detailing that Sun Yuchen was charged for "selling illegal securities, fraud and market manipulation, and wash trading (similar to pump and dump)". Currently, the case is awaiting further review.

Justin Sun has been stripped of his diplomatic status in Grenada

According to the Grenada Broadcasting Network (GBN), Sun was stripped of his ambassadorial status sometime after the elections held in June 2022, when the New National Party, which had granted Sun the position, was ousted by the National Democratic Congress.

All ambassadors were recalled sometime in the "first few months" of the nine-month-old NDC government. The account associated with Justin Sun, Grenada's permanent representative to the WTO, has not been updated since June 13, 2022.

Later, Justin Sun tweeted that his term as ambassador to the WTO in Grenada will end on March 31, 2023. Next, he will focus on smoothly handing over his duties to his successor and continue his public service career after a short break, focusing on the digital economy and cryptocurrency regulation.

It is reported that Justin Sun was appointed as Grenada's ambassador to the WTO in December 2021 by donating funds for water conservancy projects. The Grenada government at the time expressed the hope that he would use his connections to promote the country's trade, investment and development opportunities.

According to WTO rules, diplomatic immunity is granted by the host government (Switzerland, where the WTO headquarters is located) to the diplomatic representatives of the sending country (Grenada). In this case, Switzerland grants Justin Sun diplomatic immunity (only applicable to Swiss territory).

Now, Justin Sun has lost the diplomatic immunity granted to him by Grenada as a WTO ambassador. Grenada also has a strict extradition policy towards the US government. If the SEC's previous charges against him develop to the criminal level, it is expected that he will not be able to escape prison.

Sun Yuchen's group has been repeatedly attacked by hackers

In recent months, Sun Yuchen's group, including HTX (formerly Huobi), Poloniex Exchange, and iToken (formerly Huobi Wallet), have suffered multiple hacker attacks, causing huge losses. This article summarizes the following.

On September 2, a former Huobi employee installed a Trojan horse on iToken (formerly Huobi Wallet) to steal user mnemonics or private keys, resulting in the theft of funds from at least five accounts, totaling approximately US$1.39 million.

On September 25, Justin Sun, HTX consultant and founder of TRON, said that HTX (formerly Huobi) had been hacked and lost a total of 5,000 ETH, worth about $8 million. On October 8, Huobi said it had recovered the funds.

On October 3, a user reported that all 273,000 USDT funds in his iToken wallet (formerly Huobi wallet) were transferred out, suspected to be stolen.

On November 10, Poloniex, owned by Justin Sun, was stolen $114 million in assets , of which $49 million came from the TRON network. The hackers may be from North Korean hacker groups, and it is very difficult to recover the stolen funds.

On November 23, Huobi Chain's cross-chain bridge Heco Bridge and HTX (formerly Huobi) were attacked by hackers. A total of US$86.6 million worth of assets were transferred to Heco Bridge, and HTX had suspicious transfers of US$23.4 million. According to Cyvers Alerts, HTX lost approximately US$12.4 million.

On October 26, Justin Sun announced the overall profitability of all his companies: "Actual revenue in the third quarter was US$202 million, expenditure was US$104 million, and profit was US$98 million, a month-on-month increase of 14%."

According to the third-quarter financial report released by HTX in October, its operating income in the third quarter was US$24.75 million, which is far from the stolen amount. The sum of the two stolen amounts has exceeded its group's third-quarter business income, which is approximately equal to the half-year profit of Justin Sun's group.

Sun Yuchen said that the losses caused to users will be fully compensated. However, his company has been robbed many times in succession and has become a cash machine for hackers. In addition, the dispute between Sun Yuchen and the US regulatory authorities has not been settled. The market is full of speculation about the reasons! It seems that there is a sense of déjà vu that the building is about to collapse!

Arthur Hayes, founder of BitMEX, SBF, founder of FTX, DK, founder of LUNA, Faruk, founder of Thodex, Zhu Su, founder of Three Arrows Capital, and Zhao Changpeng, founder of Binance... have been sentenced/imprisoned one after another. Will Justin Sun be the next one? I’m afraid no one can tell!

According to the timeline, after the FTX incident, the United States publicly investigated Binance's money laundering for Iran and Russia, and then sued Zhao Changpeng and Binance, and soon after sued Justin Sun. Now the U.S. Department of Justice and Binance have reached a settlement, Zhao Changpeng pleaded guilty and stepped down, and Justin Sun may become the next target of sanctions.

Or Justin Sun can refer to the experience of Binance's settlement. Zhao Changpeng paid a large sum of money and admitted to a minor crime. It is expected that he will be sentenced to no more than 18 months in prison, and there is no felony. This is a relatively small punishment given by the US judicial system within the legal framework. More importantly, Binance has since moved towards global compliance and opened up the road to future development!

In short, the Binance settlement has set a precedent. Even with decentralized operations and distributed offices, we still cannot avoid strong sanctions!