Partner of Cinneamhain Ventures: Information shows that TRX may be under investigation by US regulators

Editor's Note: This article comes fromBlock beats BlockBeats (ID: BlockBeats), reprinted by Odaily with authorization.

Editor's Note: This article comes from

Block beats BlockBeats (ID: BlockBeats)

Block beats BlockBeats (ID: BlockBeats)

, reprinted by Odaily with authorization.

On January 5, Adam Cochran, a partner at crypto investment firm Cinneamhain Ventures, tweeted that some information indicates that Tron (TRX) may be under investigation by US regulators, or may be related to Bittorrent and Poloniex.

In the spring of 2020, a New York-based organization filed securities fraud charges against the Tron Foundation. In December 2020, the Tron Foundation filed a motion to dismiss the case, citing lack of jurisdiction or direct sales. These allegations are correct as long as Tron has no substantial presence in the US and makes no effort to make its tokens available to US customers, which is where the alleged investigation and legal risks lie.

Adam Cochran mentioned that although there is no clear evidence, the Tron Foundation does seem likely to be affected by US regulatory actions. Tron has previously claimed that U.S. securities laws do not apply to secondary transactions that occur on Binance at a time when Binance is accepting U.S. users, and that neither Tron nor Binance have made an effort to block these users while promoting TRX to them.

But the root of the issue (under investigation) appears to revolve around Poloniex and BitTorrent, two US entities with ties to Justin Sun. In December 2019, Justin Sun acquired the Poloniex trading platform and listed TRX tokens, Poloniex created a new "level 1 account" which has no KYC/AML requirements and can deposit/withdraw daily without verification Up to 10,000 USD.

To make matters worse, Poloniex lets users trade crypto futures with up to 50x leverage without any verification required. And BitMEX also had the same problem when it was sued by CFTC and SEC. Poloniex is an entity based in Seychelles, and BitMex is also registered in Seychelles at the same level. Overseas registered entities This does not solve the problem of being subject to US jurisdiction.

Moreover, compared with BitMex, Poloniex's business headquarters is located in the United States, including key members of its executive team. So the question becomes whether Poloniex has any intention of having US customers (who will only connect using a VPN). An easy way to detect this is the average hourly transaction volume.

The following is third-party data for US exchanges such as Gemini:

This is the same chart, but for an Asian exchange like Bithumb, the trading trend is basically the opposite of Gemini's in the US, at 20:00 (UTC time 8UTC), the US exchange is active, while the Asian exchange is inactive.

Then look at the trading activity schedule of Poloniex, which is obviously the same as the active hours of American platforms such as Gemini. While this is not a clear statistical case, it certainly raises eyebrows.

Adam Cochran also mentioned that Tron has been accused of allegedly brushing its trading volume, which is often many times higher than its market value. This could be considered market manipulation (like the XRP case) and be investigated by the authorities.