Justin Sun Declared Guilty on a DeFi Lender Compound

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Key Takeaways:

  • Sun’s wallet scooped out 99,000 COMP tokens.
  • They transferred 102,000 tokens to Binance.
  • The members of crypto think tank GFX Labs’ governance division threw alarming hints earlier.

On Friday, GFX’s Twitter handles tweeted that a considerable loan of Compound’s governance token, COMP, was taken out by billionaire Justin Sun.

Sun is marked as an Asia markets adviser on TUSD’s website, and a blog post from 2020 quoted that,

 “ownership of TUSD will be moving over to an Asia-based consortium that will be working with TRON to develop TUSD on Ethereum, TRON and other blockchain networks.”

He is the founder of TRON and a Chinese Grenadian diplomat.

Earlier, the GFX Labs’ governance division members threw specific hints that clearly stated that a renowned investor might be attempting to finance large sums of capital to distort the on-chain governance for decentralized finance (DeFi) protocol.

Meanwhile, the On-chain data revealed that Sun’s wallet borrowed 99,000 COMP tokens worth over $13 million on Thursday. Paramount to this, he transferred 102,000 tokens to Binance. Binance is known to be the world’s biggest crypto exchange.

However, later an address that received $9 million worth of COMP tokens from Binance proposed adding TUSD as a collateral asset on Compound. Also, this would permit Compound users to generate their loans parallel to their TUSD holdings.

Furthermore, the governance of the on-chain of the Protocols Defi is often from the account weighted the token itself. Hence, GFX characterized the loan as a “governance attack”. However, nothing explicitly would prevent users from collecting loans to vote on.

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Purnima Dhar

A journalist on a voyage of unearthing the world of fathomless things in tech world. An odyssey writer at eventide and a greek mythology reader while in hush.I Breathe for writing content and fabricating media ties.