Police were called to the Beijing offices of blockchain platform Tron today to protect staff and ease tensions, after a billion-dollar Ponzi scheme was linked to the blockchain platform.
Decrypt had previously reported that hundreds of thousands of Chinese investors had lost at least $30 million, after investing in a scam that alleged to have ties to the Tron blockchain—an association that Tron itself, is accused of profiting from.
In a video initially posted on a Chinese WeChat forum (and later shared to Twitter,) an angry mob can be seen outside the Tron building, as police stand guard.
The unrest comes shortly after Tron CEO Justin Sun again failed to acknowledge that the blockchain-based platform could have played a part in the scam through its silent complicity. Some victims have also claimed that Tron’s crypto, TRX, benefited from increased activity and liquidity, as unwitting investors plowed their TRX into the scheme on the promise of major returns.
On Chinese crypto forums, many of the victims have been sharing their stories after the fraudulent platform abruptly shut up shop last week. Chinese media reported that one woman committed suicide after losing money on the scheme.
In China, Tron is known by the name “Wave Field.” The scammers set up a site called “Wave Field Super Community” to tempt users into investing in the scheme, which promised big profits. Some members of the community asked Sun directly to clarify the relationship between the blockchain platform and the site. But he didn't, which apparently left many to assume it was attached to the project, Chinese media reported.
The Tron Foundation has since responded to these claims. In a statement provided to Decrypt, it said, after learning of the Wave Field scam, "Tron warned investors on its WeChat messaging group, Wei Bo official channels — Wei Bo and Dou Yin, etc. — to beware of potentially fraudulent schemes." It added that Tron partner Raybo technology gave the imitation project a cease and desist warning and is continuing to work with the police to resolve the matters.
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. Be careful & hodl your $TRX/ $BTT
— Justin Sun (@justinsuntron) July 5, 2019
Following the publication of Decrypt’s article last week, Sun issued a warning on Twitter alerting investors to Ponzi-like schemes trading on the Tron name. But he failed to refer to Wave Field Super Community specifically.
The price of Tron shot up over the weekend, from a market cap of $2.1 billion, to $2.3 billion. After news of the suicide broke today, the price fell sharply, with some $100 million wiped off the market cap in little over 24 hours.
Update [July 8, 15:34 UTC] Added a statement from the Tron Foundation.