$29 000 000 USD
DESCRIPTION OF EVENTS
"Sun founded the Tron cryptocurrency — also known as bochang, or “wave field,” in China — in September 2017 and made headlines last month after he successfully bid $4.57 million for a charity lunch with billionaire investor and avowed crypto-skeptic Warren Buffett." "“Wave Field” is an alternative name for TRON in China. (Indeed, a quick Google search of the term shows early TRON marketing materials from 2017 bearing the name)."
"Founded in Jan.2019, ” uTorrent Super Community ” claimed itself as a TRON Super Representative, attracting users to register and deposit TRX into the community. Users get more TRX as they invite others to register."
"In January of this year, a group of scammers began promoting the Wave Field Super Community, touting false partnerships with Tron and file-sharing platforms BitTorrent and µTorrent to entice victims to “invest” in a multilayer dividend-generating scheme. Presenting themselves as “super representatives” of Tron, the scammers said that if new recruits deposited their Tron tokens into certain accounts, they would soon receive large dividends. It operated like a pyramid scheme: To achieve maximum returns of up to 360%, victims were encouraged not only to deposit their own funds, but also to bring others onboard."
"Relying on the popularity of TRON and marketing, it has quickly gained a large number of users. During this period, many users asked Justin Sun, founder of Tron and CEO of BitTorrent about the relationship between the project and TRON, but Sun did not respond." "[M]any users asked Justin Sun, founder of Tron and CEO of BitTorrent about the relationship between the project and TRON, but Sun did not respond."
"In view of Sun’s ambiguous attitude, some people believe that no matter whether TRON was involved in, it can be sure that these Ponzi schemes do increase the activity and liquidity of TRX."
"” uTorrent Super Community ” claimed to be a project of uTorrent. It claimed that uTorrent is one of the 27 super representatives of TRON，which planned to attract fans in some different ways. It claimed to give 9/10 TRX bonus from TRON to users who join in. On July 24, 2018, TRON completed its acquisition of BitTorrent and all its products. Many investors firmly believe there is a connection between TRON and ” uTorrent Super Community “."
"Over past five months, the uTorrent Super Community has [accepter] crypto worth more than 1 billion RMB, and the number of victims has reached hundreds of thousands." Participants "had been promised high rates of return on their investments in the name of TRON, BitTorrent and uTorrent."
"In fact, the real super representatives of TRON haven’t been chosen. The node bonus for users in ” uTorrent Super Community ” is far too high. Tough TRON give bonus to users with DPos, but the bonus given by ” uTorrent Super Community ” is hundreds times more than that of TRON."
"TRON warned investors on its WeChat messaging group, Wei Bo official channels — Wei Bo and Dou Yin, etc. — to beware of potentially fraudulent schemes. The company posts similar warnings in its English-language territories and has a Community team that operates across the globe to answer investor questions and listen to problems. The company on multiple occasions has stated it reserves the right to pursue legal remedies against those that seek to infringe on the company’s name to sow confusion in the public marketplace." "The company further said that its partner, Raybo Technology, had ordered the group to cease and desist from acting in Tron’s name, as well as reported it to China’s public security organs."
"When the Wave Field Super Community scam appeared on Chinese social media sites earlier in the year, investors appealed to Justin Sun for clarification." "Sixth Tone was unable to find any posts on Tron’s social media accounts specifically referencing Wave Field Super Community."
"On the morning of June 30, the official group of ”uTorrent Super Community” announced that it would suspend service to optimize and upgrade the community platform, but how long would it take was unknown. And its online customer service didn’t reply when users consulted. By 10:00 on June 30, its App could not be downloaded and opened, users realized that the team might have gone bust."
"At 1:00 am on June 30, the App of Torrent super community was shut down. All of the wallet assets were moved out two weeks ago, and investors are currently unable to cash out." "After reportedly raking in 200 million yuan ($29 million) from duped investors, the scammers disappeared on July 1, closing the Wave Field Super Community app (“for maintenance,” they said initially), disbanding chat groups on social platform WeChat, and taking the group’s official website — allegedly registered to an individual named Pu Hongwei — offline."
"Until July.1 did Justin Sun reply in weibo, he reminded the investors to get rid of Ponzi scheme in the name of TRON without clarifying the relationship between uTorrent and Bitorrent." "The same day, Sun posted on microblogging platform Weibo to warn against unproven investment opportunities. Several days later, he posted a similar message on Twitter. “As a leading blockchain protocol, there are Ponzi schemes using #TRON, #BitTorrent or #uTorrent name,” Sun wrote. “We will never ask you to send money.”"
"A public outcry followed on the heels of what some netizens considered to be a too little, too late response. “(We’ve) asked you in the past — why no answer, boss?” one Weibo user commented under Sun’s post. “What were you thinking? Over half a year until you say something?” wrote another."
"The flames were further fanned after a self-described scam victim’s apparent suicide note and photographs of self-harm went viral after being posted on WeChat. The woman said she had borrowed heavily to invest in the Wave Field Super Community, only to end up penniless and in debt." "July 1 was also the day that a suicide note and photographs posted by a woman named Xia Bing went viral on the WeChat messaging site, according to Nuclear Finance. The woman is thought to be a middle-aged, single parent who had borrowed money from a neighbour to invest in the Ponzi scheme."
"One family even killed themselves as they borrowed heavily to take part in the scheme. Now the victims organized a wechat group to safeguard their legitimate rights. The victims listed out the money they lost in the wechat group. Until now, the police hasn’t placed the case and investigate."
"As Beosin, a blockchain security platform estimated, it had transferred 1133270120 TRX, 34709074 BTT to several accounts in succession, amounting to more than 250 million yuan of RMB two weeks ago."
"In response, industry outlet Cryptocurrency News published an op-ed Saturday titled “Tron’s Justin Sun Didn’t Cause a Suicide – But He Didn’t Stop It Either,” suggesting that Sun is at least partly to blame for the woman’s fate. However, several high-profile people in the blockchain world have renounced the article and defended Sun, saying he should not be held accountable for the apparent suicide and arguing that investors must be diligent in doing their own research."
"Early on July 8, 2019, Beijing time, a number of people attempted to enter the office of Beijing research and development center of Raybo technology, a partner of TRON in mainland China. Pictures and video circulating on the internet show scenes of the incident and the police response that removed them and secured the office."
"In one of the clips, a number of people were standing around the entrance to the office. The TRON logo could be seen just above the receptionist’s desk. At the center of all this was a row of policemen that appeared to be protecting the cryptocurrency firm’s office. There was another clip that revealed a woman who appeared to be inside the TRON office, yelling loudly at someone else."
"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."
"TRON officials expressed their sympathy and understanding for those who had been deceived, however, the company strongly condemns acts of violence that may be perpetrated as a result of events that are not in its direct control. TRON has on multiple occasions warned investors of potential pyramid schemes or illegal activities that attempt to defraud investors under the guise of fast riches using blockchain technology."
"After first hearing of Wave Field Super Community, officers of Raybo technology, a partner of TRON in mainland China, communicated with that company, seeking a cease and desist from acting in TRON’s name. The company also reported the company to the public security organs. Ruibo is working with police to bring the criminals to justice and continues to work internally to safeguard the rights and interests of investors."
“I was happy to see many calls for the truth behind the unfortunate events which unfolded in our partner offices today. I believe in having honest, candid discussions on any medium, and yet the twisting of events and rush to judgment did nothing to help investors who were defrauded, while it hurt investors in the Tron community who saw the value of the holdings decline on fake news.“
The uTorrent Super Community claimed to be affiliated with Tron, when in reality no such affiliation existed. Many in the community sought clarity, and none was provided. Investors thought they could trust the scheme, and invested over $29m USD worth of funds. After the scheme collapsed, many thought they had been deceived by Tron itself and stormed the office of a Chinese partner firm. Nothing was done to assist the victims.
HOW COULD THIS HAVE BEEN PREVENTED?
The uTorrent Super Community was run by an anonymous group and there was no visibility into the operation. They made numerous false claims, which could have been prevented or caught by any sort of oversight.
SlowMist Hacked - SlowMist Zone (Nov 5)
uTorrent Super Community, a Crypto Ponzi Scheme Went Bust, While BitTorrent’s CEO Justin Sun Kept Silent | NEWS.8BTC.COM (Dec 17)
The Wave Field Community Scam And Our Response (Dec 17)
Tron Cryptocurrency Responds to Swindled ‘Investors’ (Dec 17)
@justinsuntron Twitter (Dec 17)
@justinsuntron Twitter (Dec 17)
https://www.ccn.com/tron-justin-sun-scam-suicide/ (Dec 17)
@mishalederman Twitter (Dec 17)
TRON and Justin Sun Deny Links to ‘Wave Field’ Ponzi Scheme - BeInCrypto (Dec 17)
https://www.altcoinbuzz.io/cryptocurrency-news/finance-and-funding/wave-field-super-community-scam-victims-tries-to-break-into-trons-office-in-china/ (Dec 17)
@matt_willemsen Twitter (Dec 17)
@justinsuntron Twitter (Dec 17)
Tron Says Protestors at Beijing Office Invested in Imposter Scheme - CoinDesk (Dec 17)
https://36kr.com/p/1723959197697 (Dec 17)
Police enter Tron's Beijing office following Ponzi scheme suicide - Decrypt (Dec 17)
Chinese Ponzi scheme victims accuse Justin Sun of complicity through silence - Decrypt (Dec 17)
https://www.financemagnates.com/cryptocurrency/coins/scam-victims-try-to-break-into-tron-china-office/ (Dec 17)
Tron and The Wave Field Community Scam: What Really Happened? (Dec 17)
Everything is Fine, Says Justin Sun as Fake News Hit Tron (Dec 17)
TRON Denies Claims of Wave-Field Scam Connection - Coindoo (Dec 17)