Crypto DeFined Recap: Justin Sun's World
Justin Sun is a controversial figure in the crypto industry — and he’s good with that.
The way Sun sees it, the controversy that follows him is a reflection of his "innovative" tendencies. Some might not agree with that assessment, but one thing's for sure: The founder of the Tron blockchain ecosystem does inspire debate in the crypto industry.
On Feb. 1, Sun joined Crypto DeFined and talked about why he’s interested in buying CoinDesk, one of the leading crypto publications, and why he feels investors shouldn't worry about the financial health of his companies.
Five takeaways from the interview (edited for clarity):
-- Sun has serious interest in buying CoinDesk. Should he prevail -- a big "if," given the stiff competition he would likely encounter -- Sun said he has “plans" for CoinDesk. He wasn't more specific, saying the details would depend on the purchase price and other valuation-related factors.
Right now, according to Sun, CoinDesk's owner, DCG, is being careful about how it vets and selects potential buyers, so it's unclear if Sun would even make the cut. But Sun isn't worried. "Everything is possible," he opined. "We will see the results in the next 40 to 60 days.”
DCG, formally known as Digital Currency Group, is a conglomerate that also owns Genesis, a crypto lending platform that filed for Chapter 11 bankruptcy protection in January.
-- Sun plans to establish a base in Hong Kong. The crypto mogul said he hopes to move some of Tron’s operations to Hong Kong by the second quarter of 2023. He also plans to turn Hong Kong into his Asia hub, and will also retain a base in Geneva. As for his role as the permanent representative to the World Trade Organization (WTO) for the island nation of Grenada, no changes are envisioned there.
For Sun, it all comes down to future prospects. Hong Kong has "positioned (itself) as a hub for cryptocurrency," he pointed out. That's one reason, he says, that the city is now "trying to get every big crypto company" to locate there, so Hong Kong can compete with Singapore.
-- Mainland China, where crypto trading and mining are still illegal, could change its tune. Sun says he has seen documents, "firsthand," that the People's Republic of China (PRC) is already taxing crypto investors. That's a "positive signal," in his view, "because the government wouldn’t tax illegal transactions.”
-- Sun wants to make TRX legal tender in five countries by the end of this year. Tron’s native token, TRX, is already accepted in Dominica, and a second island in the Caribbean, St. Maarten, is considering doing the same. Tron’s promotion of TRX in Dominica will “have good impact and good influence” on all of the Caribbean states, Sun predicted. For the remainder of '23, Sun said he plans to heavily promote TRX in the Caribbean, Latin America and Africa.
- Huobi may be shrinking in size, but it is expanding selectively. Previously, Huobi "focused too much attention on global expansion,” said Sun, an adviser who effectively serves as Huobi's de factor leader. After he was appointed as an advisor, Sun said he "strongly advised them to focus on their core business, which is definitely the Asia time zone" versus doing business everywhere, which was "not cost effective.”
Meantime, Sun is still on the hunt for acquisition and partnering prospects. In an August interview, Sun said he planned to acquire 3 to 5 crypto companies in coming months. His focus -- then and now -- is on trading platforms because of their user data and traffic flows. In Sun's eyes, that puts them at the “center of the crypto industry."
Industry speculation about the next FTX-style collapse is swirling right now. Sun is aware of the industry's concern, of course. But as it regards his growing portfolio of companies, Sun says investors have nothing to worry about. Why? Simply stated, "dangerous" lending and borrowing practices are not a part of his DNA, according to Sun.
“All of our customer assets are held 1-to-1, basically sitting on the balance sheet," Sun offered, adding: "We don’t do any lending or borrowing with any counterparties. Our business is plain and simple: earn on transaction fees.” Using customer money to invest -- as prosecutors allege Celsius and FTX did -- is “very dangerous,” Sun said, adding that his companies use their own money for investing.
Meanwhile, concerns in some circles that Huobi is holding too many of its own tokens is overblown, Sun said. “The real truth is, we just hold what our customers hold. If most of the Huobi token holders hold their funds on Huobi’s platform, that’s … what we’re going to publish on our balance sheet.”
As for the idea of wash trading of native tokens to boost prices -- a growing industry practice that is concerning to crypto investors -- Sun said that is a not an issue at Tron and Huobi. Asked point blank if his companies have ever engaged in wash trading, Sun responded succintly: “Of course not.”
Watch the replay here.