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

Rhythm BlockBeats news, on January 5th, Adam Cochran, partner of encryption investment agency Cinneamhain Ventures, tweeted that some information indicates that TRON (TRX) may be under investigation by US regulators, or may be in contact with Bittorrent and Poloniex are related.

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 U.S. and makes no effort to make its token available to U.S. 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 to have May be subject to U.S. regulatory action. 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 made an effort to block those users while promoting TRX to them.

The root of the problem (under investigation) however appears to revolve around Poloniex and BitTorrent, two US entities that are associated with Justin Sun has a relationship. 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 with up to 50x leverage without any verification futures. 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. Overseas registered entities This does not solve the problem of being subject to US jurisdiction.

And compared to BitMex, Poloniex’s operations are headquartered in the United States, including key members of its executive team territory. So the question becomes whether Poloniex has US customers on purpose (who will only connect using a VPN). An easy way to detect this is the average hourly transaction volume.

The following are third-party data for US trading platforms such as Gemini:

This is the same chart, but for an Asian trading platform like Bithumb , the trading trend is basically opposite to that of Gemini in the United States. At 20:00 (UTC time 8UTC), the trading platform in the United States is active, while the trading platform in Asia is not active.

Then let’s look again Poloniex The timeline of trading activity in , apparently the same as the active hours of US-based platforms such as Gemini. While this is not a clear statistical case, it certainly raises eyebrows.

Adam Cochran It was 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 (as in the XRP case) and be investigated by authorities.

Adam Cochran It is believed that this allegation is crucial to Tron, because Tron often promotes financial lending applications and gambling applications on its blockchain. If the blockchain is not sufficiently decentralized, these products could be considered illegal in the United States.

Adam Cochran concludes that while it is unclear exactly what the SEC is investigating, But based on some anecdotal evidence and the information listed here, Tron’s exposure to the US appears to have exposed US regulators more than they could have imagined.

But in the end, Adam also said that if the SEC is conducting an investigation, it will take a long time to collect evidence, and it is worth noting that not all SEC investigations end in negative actions. It is entirely possible that these issues (from respondents) would have been addressed without the ongoing review.

According to Rhythm’s previous report, on December 29, Cinneamhain Ventures partner Adam Cochran tweeted, “It seems The SEC is much more active than we thought, and is probing many projects and companies.”  He said that the SEC has now confirmed that at least one is a large project, but it seems to be in the active investigation stage. According to previous reports by Rhythm, Cochran revealed on December 26 that Coinbase has begun to consider delisting or suspending XRP. On December 29, Coinbase has issued a document confirming that it will suspend XRP transactions from January 20, 2021.   

Update: Sun Yuchen, the founder of TRON, has responded to this matter Justin Sun responded: No TRX was sold to any Americans, Tron has no risk》

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