The Actual Story Behind The TRON Raid Rumor

As per the US SEC, ponzi schemes are similar to pyramid schemes which follow the “rob Peter to pay Paul” rule. A fraudster promises large returns on investments. He takes some amount of investment from a new investor and pays it to the earlier investors. He continues doing this until there are no new investors who can invest in his ponzi scheme and the whole scheme collapses. Hence, the newest investor will lose all his investments. 

Chinese Ponzi Scheme

Chinese were also victims of such a billion dollar Ponzi scheme. This scheme defrauded hundreds of thousands of them for the blood of TRON CEO Justin Sun. TRON is known with the name “Wave Field” in China. Owing to which there was a ponzi scheme created with the name “Wave Field Super Community”, who claimed popular associations to draw in thousands of investors. 

It is during the last week that this ponzi scheme was shut. This scam cost its victims a 200 million CNY ($30m). It also led to a suicide of a single mother according to a Nuclear Finance.  The victims say that Sun’s silence about this scheme claimed to be associated with TRON and spread widely. 

Investors now claim that Sun could not disassociate Tron and BitTorrent from the fraudulent scheme. They also added that the TRX token was benefited from increased activity and liquidity. As they had invested their TRX  tokens into the scheme on the promise of major returns. 

The “Wave Field Super Community” came up in January this year. This scheme claimed itself to be a so-called Tron “Super Representative”. Ever since the launch of the scheme Sun had not responded to any of the queries. On July 1, during the closure of “Wave Field Super Community” website, Sun replied on social media platform weibo. He replied saying that investors should be aware of the Ponzi-schemes using the name TRON. 

Also, on July 1, a suicide note and photographs posted by a woman with the name Xia Bing went viral on the WeChat messaging site. The woman was a middle-aged, single woman who borrowed money from her neighbour to invest in this ponzi scheme. 

Was It A Raid?

While the billion dollar ponzi scheme buzz was still on, there was another news on the social media that shocked everyone. On July 08, 2019, few of the social media users shared videos which claimed that the police officers raided the TRON Beijing office. 

The video visualised some people shouting at the office saying “TRON is a scam”. This is not the only video people are talking about but also there were various other videos posted with different opinions. 

Some of the people believe that it was a police raid, while others tried to calm down the audience saying that it wasn’t a police raid at all. Instead the police were there to safeguard the TRON office from angry crowd who lost their money in that fake TRX scheme. 

As soon as the footage went viral a large sum of TRX tokens were transferred to Huobi. This led the crowd to believe that the raid thesis was accurate. 

TRON came up with an explanation for this whole debacle, by sharing an official blog post. The official blog post claimed that the law enforcement officers were there to protect TRON office. The Beijing research and development center of Raybo technology captured the pictures and videos that went viral. 

The official blog post read as, 

After communicating with the protesters, employees at Raybo learned that at least some of the people were deceived by the so-called “Wave Field Super Community” scheme that traded on its similarity to the Chinese-language version of TRON’s name to defraud investors. The victims had been promised high rates of return on their investments in the name of TRON, BitTorrent and uTorrent.

Although the blog post was released, Justin Sun also tweeted that everything is fine and everyone should stop spreading fake news of the raid.

Final Thoughts

It is now clear that the police wasn’t at Tron’s office to raid. They were there to protect the office from the victims who went to the office to express resentment about Sun and company’s silence. The Tron price shot up prior to the announcement of the suicide, from a market cap of $2.1 billion to $2.3 billion. Once the news was announced price went drastically low. It changed with $100 million wiping out off the market cap in 24 hours.

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