Countless cryptocurrency investors “memed” the situation, joking about how it may result in Warren Buffett pulling his RSVP to the $4.5 million charity lunch. Others posted photoshopped images of Tron’s Sun behind bars.
Earlier today, video footage appearance on Twitter of police at the Chinese office of Tron (TRX), Justin Sun’s brainchild. Upon the propagation of this video, rumors began to mount that the crypto startup was under investigation and that individuals had been arrested.
According to a number of individuals on Twitter that translated the video, Tron is not, in fact, under investigation or being raided by local authorities. The police are there to protect Tron, not attack it, from a group of angry locals that were swindled by a Ponzi scheme alleging to be affiliated with the startup.
Over the course of a number of months, a project piggybacking off Tron’s success is reported to have stolen over $30 million from local investors. Known as “Wave Field Super Community”, the firm claimed to be a Super Representative, meaning a leading node, of the Tron blockchain, managing to secure funding from many, likely thousands of investors.
The thing is, Justin Sun, the chief executive of Tron and a known Chinese entrepreneur, failed to disassociate and discredit Wave Field, which happens to be the Chinese name of Tron. This scam was so damaging that it has been reported that a Chinese single mother committed suicide after the scam collapsed, leaving a debt unpaid. Those visiting Tron’s offices are presumably those that siphoned capital into the scam.
Some have claimed that this protest of sorts is entirely illogical. As popular crypto trader Jacob Canfield remarks, blaming Tron for having been mentioned by a scammer is “like blaming Bitcoin for investing in Bitconnect“.
Ponzi Schemes Back on The Rise
This odd debacle comes as pyramid schemes have begun to grace the cryptocurrency industry once again.
Reported by The Times of India last week, the Criminal Investigation Department (CID) of India has taken custody of four individuals. They are alleged of creating a cryptocurrency called “KBC Coin”, a project which earlier promised an investment return of over 10,000% within a short time period.
The CID claims that KBC Coin was marketed exactly like a classic pyramid scheme, touting a multi-level reward mechanism that rewarded those that took the plunge early and managed to draw others into the “business”. It is unclear how much capital KBC Coin’s founders managed to swindle.
And in South Africa, “thousands” have, according to The Next Web, been duped into investing in a cryptocurrency Ponzi scheme that was purportedly generating over $130,000 a day.