Regulation
Justin Sun Faces Potential Lawsuit From Chain Over Manipulation Allegations
Blockchain protocol Chain is weighing legal action against TRON founder Justin Sun following allegations of market manipulation. On January 24, Sun accused Chain of engaging in activities that could harm cryptocurrency exchange users, specifically referencing the use of high leverage and contracts.
Sun posted on the platform X (formerly Twitter), tagging major exchanges such as Coinbase, Kraken, Bybit, KuCoin, and HTX Global, urging them to investigate Chain’s activities.
Chain Threatens Lawsuit Against Justin Sun Over Market Manipulation Claims
Following a heated discussion on X, Chain announced its intent to pursue legal action against Justin Sun. The dispute began when Sun claimed that Chain’s alleged actions posed risks to crypto exchange users. He also stated he would report Chain’s activities to the SEC and DOJ.
In response, Chain firmly denied the allegations. The company clarified that it is not involved in any trading or manipulation of its XCN token. Chain also stated that XCN is managed by OnyxDAO, not by Chain itself. The company emphasized its commitment to transparency and accountability while exploring legal options against Sun.
Founded in 2014, Chain has raised over $40 million from investors, including Pantera Capital and Citigroup. The company has undergone significant developments, including its acquisition by Stellar in 2018 and re-acquisition in 2020. Chain operates in the blockchain space with a focus on advancing decentralized technology.
Notably, the lawsuit threat emerged days after Justin Sun revealed a strategy to boost ETH price to $10,000 by halting ETH sales and taxing Layer 2 solutions.
Sun Tags Major Exchanges and Demands Investigation
Justin Sun’s accusations were amplified by tagging cryptocurrency exchanges in his post. He called on platforms like Coinbase, Kraken, and Bybit to investigate Chain’s activities. Sun warned of the alleged risks associated with high leverage and contracts used by Chain.
Chain’s response included a clear statement disassociating itself from the management of the XCN token. The company reiterated that OnyxDAO manages XCN and denied any involvement in trading or market manipulation.
The blockchain protocol tweeted,
“The Chain team is not actively engaged in any trading of XCN, nor involved in any market manipulation directly or indirectly. We take these allegations extremely seriously and are exploring legal remedies against Justin Sun.”
XCN Price Action
This escalation occurred amidst a surge in XCN’s market value. The token recorded a 149% price increase in one day and nearly 400% over the week. Sun’s claims appeared to link this price movement to alleged manipulation, further intensifying the situation.
At press time, Onyxcoin (XCN) is trading at $0.0242, marking a rise of 32% over the past 24 hours. The cryptocurrency has seen an increase in trading volume, up 273% to $1.42 billion, alongside a market capitalization that has grown to $745.24 million.
Meanwhile, the Tron co-founder recently emphasized the security advantages of Wrapped Bitcoin (WBTC) over Coinbase Wrapped BTC (CBBTC). Justin Sun critiqued Coinbase’s lack of a Proof of Reserves system, highlighting the risk of asset freezing.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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