According to analyst Adam Cochran, some sources suggest that TRX may be under investigation by US regulators and that US exposure (in relation to Bittorrent and Poloniex) originated from the filings. Recent court in New York.
Last spring, a group of people in New York filed a lawsuit against the Tron Foundation on allegations of stock fraud.
In December 2020, the Tron Foundation filed a request to dismiss the case on the grounds that it was neither legally relevant nor a direct sale. Tron said that this group of people bought TRX through the third exchange, the Binance exchange, not directly from the ICO, so this lawsuit is absurd in the New York district court.
According to Cochran, there are some points that seem to prove Tron is right due to the fact that they do not sell ICOs in the United States. But the crux of this seems to originate from Poloniex and BitTorrent, two US entities that are part of a chain of companies affiliated with / owned by Justin Sun.
In December 2019, after purchasing Poloniex and listing TRX, Poloniex created a new “Level 1 Account” with no KYC / AML requirements and can deposit / withdraw up to $ 10,000 USD per day without confirmation. intelligence.
Even worse, Poloniex allows users to trade futures contracts with up to 50x leverage without any verification.
These are the same issues that the CFTC, SEC and NY Southern District Court sued BitMex earlier this year.
Poloniex is a registered company in the Seychelles, the same country to which BitMex is registered because it thinks they are outside of the United States’ jurisdiction of KYC / AML bypasses.
Worse than BitMex, however, the US-based Poloniex operations are comprised of key members of their executive team. Justin Sun also lives in San Francisco. And for Poloniex, it simply can’t be without US users, and that would be the act of not complying with US securities laws while operating in the United States.
In addition, there are numerous allegations of wash trading, as TRX frequently has a volume that is many times higher than its market value, which would be an act of manipulation of the market. is an unregistered security (as alleged in the case of XRP).
TRON is too focused
In 2019, according to news outlet Zdnet, a critical security hole was discovered in the TRON network potentially rendering the ecosystem’s blockchain useless. Then researchers discovered that a single node can destroy an entire chain.
This is important for Tron, as they regularly promote financial lending and gambling apps on the TRON blockchain. If blockchain is not fully decentralized, those products could be considered illegal services in the US.
It is not clear exactly what the investigations are taking place, but based on some of the rumors and information given here, it seems plausible that Tron has contact with US citizens that could expose them to regulators pay more attention, according to Adam.
If there is an ongoing investigation, it should be remembered that not all SEC investigations end in negative action, and even with results, they can take months or years to complete. progression, Adam concludes in the article.
Following the information above, TRX price has dropped 10%, TRX’s price action is said to be very poor compared to other major platform coins that are booming in the market like ETH, DOT or ADA. After the 60% drop in XRP due to SEC lawsuits, investors are trying to avoid all projects that are suspected of being securities or are in the sights of the SEC, because no one wants to split accounts in one. day.