Yesterday, the Twitter user Hayden Otto revealed that TRON is under serious fire: he updated that the Beijing offices of the prominent crypto company behind the TRX cryptocurrency had been filled with police officers as part of a raid.
Otto went on to update users that many people were gathered outside the TRON office, protesting and shouting that TRON is a scam. All of this took place after the news broke that TRON failed to distance itself from a crypto Ponzi scheme that had claimed it is connected to the company and resulted in many unsuspecting victims losing their money.
There are several videos that are making rounds on the social media, showing police officers in an entryway area of TRON’s offices. It is not fully clear if the people they were detaining were workers of TRON or just random citizens. Some furious protesters that appear in the videos are telling that TRON itself is a fraud. The videos also present about a dozen police officers scouring the, and in one video there’s a woman shouting on the phone to a person that the police is not letting them out. The logo of TRON can be noticed on the door of the office.
The Crypto Scam Behind It All
A crypto Ponzi scheme that alleged it is affiliated with TRON has managed to make off with many unsuspecting victims’ funds, and a lot of accusations were being thrown at Justin Sun, TRON CEO and founder, for acting complacently. Apparently, TRON is known in China as “Wave Field” and the crypto Ponzi scheme took upon the name “Wave Field Super Community” in a clear attempt to exploit it.
With the name, the fraud identified itself with TRON and the scammers behind it claimed that they were associated with the company, convincing many to invest in a crypto Ponzi scheme. However, without any initial warning, the scam suddenly closed down with victims losing roughly thirty million dollars if not more in total. There is even a suicide case that has been reported due to this Ponzi scheme.
Investors are angry at Justin Sun because he failed to make any prior announcement disassociating TRON and BitTorrent from the scheme. Investors are further claiming that TRON’s cryptocurrency TRX gained some value due to increased liquidity as well as volume activity because unsuspecting investors had plowed their TRX into this scam, believing they will get back a huge return.
Nonetheless, the news about the raid have ultimately resulted in having a negative impact on the price of TRON and its value has depreciated significantly. Yesterday, TRX dropped from a high of $0.0353 to a low of $0.0336, whilst the crypto market is trending upwards.
The fact remains that no one knows clearly if the police raid is connected to the allegations against Justin Sun being associated with the Ponzi scheme or if it something else altogether. However, it is crystal clear that Justin Sun and TRON are currently facing huge heat.
TRON Doesn’t Take Responsibility in Official Response
TRON released an official response to the events, offering “sympathy and understanding” to the victims while condemning the violence by the protesters. Yet, TRON doesn’t seem to take any responsibility, and alleges that the company did warn investors:
“In regards to reports of TRON’s inaction specifically regarding the Wave Field Super Community scam, in January after learning of the Wave Field Super Community and that it had been attracting investors in the name of TRON, TRON warned investors on its WeChat messaging group, Wei Bo official channels — Wei Bo and Dou Yin, etc. — to beware of potentially fraudulent schemes.”
Please note that TRON, by the company’s own admission (although indirectly), didn’t warn investors specifically about the crypto Ponzi scheme, but just in general about “fraudulent schemes.” This is certainly not suffice to make it clear that the company is not affiliated with the “Wave Field Super Community” scam.