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Justin Sun lands in fresh controversy, accused of ‘Governance attack’

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The founder of TRON and billionaire Justin Sun found himself in the middle of a controversy. As per this, the community accused the Chinese-born Grenadian diplomat of being a part of a “Governance attack” scheme. However, some, including himself say otherwise.

Alarming hints

Members of crypto think tank GFX Labs’ governance division were the first ones to raise red flags in a tweet on 5 February. As per this thread, billionaire Justin Sun took a considerable loan of Compound’s governance token (COMP). Sun’s wallet borrowed 99,000 COMP tokens worth over $13 million. Later sent 102,000 tokens to Binance, the world’s largest crypto exchange.

However, later an address that received $9 million worth of COMP tokens from Binance proposed adding TUSD as a collateral asset on Compound. This would allow Compound users to take out loans against their TUSD (TrueUSD) holdings. The governance of the on-chain of the Protocols Defi was often from the account weighted the token itself. Hence, GFX characterized the loan as a “governance attack”.

Connecting the dots 

According to pseudonymous GFX Labs contributor PaperImperium, the patterns here resembled a similar case concerning MakerDAO’s governance in January. “Justin borrowed a large amount of MKR from Aave,” PaperImperium said.

“Presumably this was to vote on a poll to create a TUSD-DAI Peg Stability Module. After it was noticed, he returned the MKR before voting.”

A TUSD representative reiterated similar concerns in a post. In a letter, the representative wrote in Maker’s governance forums after the poll concluded that they were unaware of Sun’s actions. “We wouldn’t risk working with Justin Sun, or any whales, to manipulate votes.”

Reactions

It was impossible to definitively verify that the proposal address belongs to Sun. Nevertheless, the alleged accusations didn’t carry much weight as per the accused executive.

In addition to this, the Compound CEO, Robert Leshner asserted that borrowing COMP to launch a proposal wasn’t a governance attack. In a series of tweets, he portrayed his reasons that read as:

Leshner later applauded Justin Sun for moving a proposal into the voting stage.

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Shubham is a full-time journalist/ Crypto data analyst at AMBCrypto. A Master's graduate in Accounting and Finance, Shubham's writings mainly focus on the cryptocurrency sector with particular emphasis on market research studies and communications for >2 years. Also, a die-hard Chelsea fan #KTBFFH.

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