Sun dodged the ICO ban, and in the midst of the trade war, he ignored the Chinese authorities’ attempts to contact him and demand he abandon a highly publicized lunch with Warren Buffet . In retaliation, the Chinese authorities detained six senior Tron employees and tried to sully Sun’s name in the press with corruption allegations. In some ways, Sun’s Maltese citizenship isn’t exceptional https://xcritical.com/ because he has other destinations he could escape to. He claimed in a court declaration that he is also a citizen of the Caribbean islands, Saint Kitts and Nevis. Another former employee told me Sun bragged offhand about intending to buy a passport from the small West African nation of Guinea-Bissau. But there was another more important secret about Sun’s relationship with Malta.

An ICO, or initial coin offering, is like an initial public offering for a new stock. It’s the first time cryptocurrency traders have the opportunity to buy a brand-new token. But Sun wasn’t anxious about the money he stood to gain if it took off or what he’d lose if the token flopped.

According to multiple Tron employees, Sun made two additional €50,000 “investments” in Malta. Meanwhile, Sun wired thousands of dollars to lawyers assisting him with his citizenship application. According to a prominent Maltese immigration lawyer, an “individual investor” is “required to contribute at least €650,000 to Malta” in order to qualify for citizenship. Sun received his residency card for Malta, and in 2020, his Maltese company, Tron Limited, dissolved. Sun made a radical change in his crypto empire when he bought a cryptocurrency exchange called Poloniex. Crypto exchanges function like stock exchanges, but instead list tokens.

He began approaching lawyer after lawyer after lawyer to find legal opinions that could protect his cryptocurrency businesses. He knew his path to riches in the United States was littered with legal pitfalls to dodge. When another former employee asked Sun’s top lieutenant in Beijing what “market making” meant, he chuckled and said, “You know how the Chinese folks do it, right? ” He apparently explained that the market-making team’s job was to work with “whales” who were wealthy cryptocurrency spenders outside of Tron. “You know those folks that have a lot of money and don’t have a lot of brains?

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Poloniex — or “Polo,” as enthusiasts called it — was an incredibly popular and incredibly risky place to trade crypto, held together by what some employees called “duct tape” code. “Polo used to be shitcoin casino numero uno,” a former employee said. “It would list everything.” That is, the exchange listed tokens of unbelievably tenuous legitimacy (“shitcoins”). It was just, like, completely Wild West,” a former employee said. For this story, 15 sources spoke to me on the condition their names be withheld because they fear retaliation from Justin Sun.

They are current and former employees of Sun’s various ventures across his cryptocurrency empire, in China and the US. One source has firsthand knowledge of Sun’s businesses for other reasons. This story also relies on hundreds of pages of internal Tron documents that were leaked to me. Over the course of reporting this story, more than one person believed that talking to me might put their lives at risk.

But suddenly, Sun seemed intent on putting a Chinese imprint on the company. He decided to consummate the marriage between BitTorrent and Tron with a summit meeting at Tron’s Beijing headquarters. After months of ducking Chinese authorities, Sun apparently now felt safe there. At 4PM in Seoul, Sun boarded his flight, and aircraft marshals waved the Korean Air plane across the tarmac.

By 2021, these slivers of Bitcoin, added together, were worth serious money. When Sun learned about the dust, he ordered engineers to gather it. Nearly every day, an engineer would find a new pocket of lost change. “You’d turn a rock over and find a million dollars,” a former employee said. After the rest of the company learned about the operation at an all-hands meeting, many people objected.

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He also told them that banks froze his money so frequently he needed to spread his fortune across numerous accounts. The employee believed Sun’s bank account strategy was designed to avoid becoming ensnared in anti-money-laundering laws. For cryptocurrency moguls like Sun, cashing out vast sums of crypto can be an intractable problem. The traditional financial system has historically steered clear of cryptocurrency. Justin Sun, a budding Chinese cryptocurrency mogul, walked through the shiny lofted atrium of the departure terminal at South Korea’s Incheon International Airport. It was September 2017, an early height of the crypto craze, and Sun had every reason to be nervous after his first ICO.

These “easy marks” are not just everyday investors — many are the people who work in crypto. A combination of “delusional optimism,” as one former employee described it, and a lack of legal guidance from regulators has allowed an atmosphere of anything-goes to fester. There were employees at Poloniex who were unsure whether Sun’s Bitcoin dust heist was illegal or not.

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When people surrounding Sun lost track of right and wrong, it made it easy for him to blithely escape without consequence. Standing back and looking at the blockchain transactions, former employees said that unfreezing and transferring massive amounts of Bitcoin dust in synchrony could only be executed with a script of code by Poloniex. By all indications, the day before the dust was grabbed from thousands of wallets, those wallets had been disabled. In the unlikely event that thousands of users somehow organized themselves to selflessly give away their dust, the fact that the wallets were seemingly inaccessible would make it outright impossible.

Klein previously said Griffith cooperated with the FBI and “helped educate law enforcement” about the so-called dark web, a network of encrypted internet sites that allow users to remain anonymous. Virgil Griffith, 39, pleaded guilty last year to conspiracy, admitting he presented at a cryptocurrency conference in Pyongyang in 2019 even after the U.S. government denied his request to travel there. During interviews, not a single former employee believed Sun would be held personally accountable for his pattern of malfeasance. A majority seem to believe he exists beyond the fingertips of American law.

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This allows us to offer the event at no charge for attendees and helps further position the region as a knowledge center for blockchain and cryptocurrency topics,” Dr. Eric Darr, Harrisburg University president, said in a press release. The former employee wasn’t home, but about 10 minutes later, the FBI called. The agent on the other end arranged to meet them at a restaurant that serves dessert in New York’s Koreatown. The former employee had a friend shadow them to the meeting in case it was a hoax by someone dangerous.

• Meanwhile, a former attorney for the SEC has been tasked with shepherding employees through the grand jury subpoena process.
• Together, those accounts depicted a man desperately thirsty for success, with seemingly limitless energy, little to no empathy for his employees, who pursued hype tactics and technology that ran afoul of the US-China trade war.
• It was just, like, completely Wild West,” a former employee said.
• But suddenly, Sun seemed intent on putting a Chinese imprint on the company.
• It seemed as though Sun believed that counsel were disposable, like he could afford to leave them behind, tarred by the acts they unwittingly facilitated, while he kept his eye on the pathway out.

NEW YORK — A cryptocurrency expert was sentenced Tuesday to more than five years in federal prison for helping North Korea evade U.S. sanctions. When I spoke to one employee who told me about Operation Couch Cushions, I challenged them and asked why Sun would possibly risk something so brazen. If Sun truly curried favor with someone powerful inside the Chinese government who could protect him, he might have been wise to do so. I spent a week calling his number at the same time every day. The same number appears in a dark web database of hacked Chinese phone numbers and personal information and identifies the owner as Luo Dan.

The former employee never learned the identity of the Hong Kong lawyer, and it’s unclear if they even had a license to practice law anywhere in the United States. But in many cases, the coin founders immediately sold all the tokens they held for a vast sum of money, crashing its value in the process and every other buyer’s investment. These were “exit scams” or “pump-and-dumps,” and all told, they bilked crypto buyers for billions of dollars. People were swindled so frequently the United States Securities and Exchange Commission could barely file charges fast enough.

In fact, his company, Tron, introduced a coin called TRX — a huge success, selling out quickly for $70 million. The problem for Sun was that the Chinese government, just days before, had banned ICOs entirely. ICOs aren’t banned in the United States like they are in China. A former employee who was generally effusive about Sun explained that when he acquired BitTorrent, it came with upwards of 100 million active users.

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It pivoted its sky blue fuselage onto the runway, the jet engines blasted, and Sun was airborne. He was bound for San Francisco, completing the first of his many escapes. Sun learned early that in the world of cryptocurrency, heaps of money can be made with ease, so long as you’re ready to exit before it catches up to you. Allegedly, Zhao learned of the impending government ban from his own connections. Over social media, they gave the impression it was a business trip.

They even called Sun an “IRS criminal,” the former employee said. It seems Sun then began making amends to Chinese officialdom. In China, many citizens are required to read communist writings inside a smartphone app called “Study Xi, Strong Nation,” which is a pun in Chinese alluding to its intellectual father, Xi Jinping. It usually features doctrines of the communist party, but recently, the app published a piece about blockchain technology written by Justin Sun.

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He transferred millions of dollars to his United States bank account through a company in Hong Kong called Davidyo Limited, some of which he used to buy a GMC Denali he apparently fancied after seeing it on House of Cards. Months later, Sun showed up at the downtown headquarters of BitTorrent in San Francisco to talk business in his Gucci sneakers. He proposed buying the ailing company, whose software focuses on decentralized file sharing. For $140 million, he emerged with one of the most recognizable worldwide brands in peer-to-peer sharing technology. Over the past year, the international community has signaled they’re fed up with various small nations serving as legal trapdoors for tax avoidance and financial crime.

Issuing a coin would be incredibly lucrative, a “kind of a no-brainer.” A former employee told me Labhart was considerably less understanding. At the time, the SEC provided little to no legal guidance on how to do an initial coin offering that wasn’t selling a security. Insider trading prohibitions apply to financial products called securities.

You can influence them to do whatever you want them to do.” The team’s operations had ventured into the realm of what was essentially wholesale market manipulation. I also revisited 18 current and former employees from BitTorrent and Tron who spoke to me during my earlier reporting on Justin Sun for The Verge. Together, those accounts depicted Ethereum vs Bitcoin: the two cryptocurrencies compared a man desperately thirsty for success, with seemingly limitless energy, little to no empathy for his employees, who pursued hype tactics and technology that ran afoul of the US-China trade war. But that story didn’t delve into the cryptocurrencies that underpin Sun’s empire. Multiple former employees told me that Sun can never return to China.

All along, it seems Sun had been paving another escape route. Hype man of the century Previously, Chris Harland-Dunaway reported on Justin Sun’s acquisition of BitTorrent — and how the crypto mogul turned it into a self-promotion machine for himself. Security Council have imposed increasingly tight sanctions on North Korea in recent years to try to rein in its nuclear and ballistic missile programs.

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The phone number also matches Luo Dan’s WeChat account, where he frequently posts articles about Buddhism and Chinese government visits to various provinces. In an interview with the party-aligned outlet China Tibet, Luo said he began his academic career as an adjunct professor and PhD in Tibetan Studies. Now, he is a government official, working as vice-chancellor of The Tibet Institute of Socialism. He has occasionally served as a diplomatic delegate for China on Tibet issues at the United Nations. The sudden turn in Sun’s relationship with China seemed inexplicable. But there’s evidence he may have reconnected with the Chinese authorities in secret.

As the source pointed out, any number of Sun’s employees may already be cooperating with the government. “They’ve kept this close to the vest for a long time,” they said. Within half an hour, the no-name wallet transferred almost its entire haul into one of Poloniex’s communal wallets.

Maltese business registry records also show Sun set up a company called Tron Limited using his Chinese name, Yuchen Sun. But a source involved in the company’s founding couldn’t say whether it conducted any meaningful business. According to them, Sun made zero commercial investments that might have stimulated the Maltese economy. When engineers finished searching, their ballpark estimate for the dust they found was roughly 300 bitcoin, or about $20 million. WikiScanner essentially could determine the business, institutions or government agencies that owned the computers from which some edits were made. It quickly identified businesses that had sabotaged competitors’ entries and government agencies that had rewritten history, among other findings.