As reported by Twitter personality Crypto Authority, the office of the Tron blockchain platform in Beijing was surrounded by police as an angry mob of protesters gathered to protest against a Chinese Ponzi Scheme which went under a Tron-like name. In a video initially posted on a Chinese WeChat forum which was later shared on Twitter, we are able to see angry protestors standing outside Tron’s office premises while police stand guard.
The police were mainly called in to ease tensions and protect the Tron staff from the wrath of the angry mob after the Tron platform was linked to a billion-dollar Ponzi scheme which has defrauded hundreds of thousands. According to Decrypt, a daily news site covering all things crypto, a fraudulent scheme used Tron’s name and solicited of approximately $30 million which reportedly led to one of the victims committing suicide.
The Tron platform is known by the name ‘Wave Field’ in China. But, ‘Wave Field Super Community’ was a Ponzi scheme which operated on that name and claimed to be associated with the renowned Tron platform to attract more investors. This ponzi scheme abruptly shut shop last week and this is what sparked the outrage and protests. The Wave Field Super Community was launched in January 2019 and it claimed itself as a ‘Super Representative’ which implies that it is one among the 27 nodes which have been given special status on the platform. The investors are now blaming the Tron CEO Justin Sun for failing to respond and provide any clarification regarding Tron’s relationship with this community since the scheme’s launch.
The investors are now enraged about the fact that Sun did not disassociate Tron and BitTorrent, the other company he owns, from this fraudulent scheme. Rumors suggest that Tron was actually benefiting financially from the attention generated by the Super Community. They claim that TRX, Tron’s crypto, was greatly benefiting from the increased activity and liquidity as unwitting investors plowed their TRX into the scheme with the expectation of getting huge returns.
The Wave Super Field Community website was shut down on 1 July and that is when Justin Sun had posted a warning on Weibo, the social media platform, asking investors to be alert to such Ponzi schemes using Tron’s name. But this post did not carry any mention about the Wave Field Super Community. This was the same day on which the suicide note and photographs posted by Xia Bing, went viral on the messaging site WeChat. As per news reports, she is a middle-aged single parent who had borrowed money from a neighbor for investing in the Ponzi scheme. Sun was unavailable for comment until 5 July, on which he released a statement which stated, “As a leading blockchain protocol, there are Ponzi schemes using TRON, BitTorrent or uTorrent names like MMM bitcoin, Ethereum pyramid & EOS ecosystem schemes. We will never ask you to send money.”
With Justin Sun recently making the headlines by paying nearly five million dollars for lunch with Warren Buffett, it does not come as a surprise that he puts great emphasis on tactical marketing and financial metrics over real network development. With Tron always being notorious for its marketing gimmicks, this scam has mired TRON in controversy which may now result in more developers staying away from the project.