Tron [TRX] plunges, longs liquidated, credit goes to ‘his excellency’
- The Tron native token experienced a major nosedive in quick succession.
- Liquidation hit a yearly high while the protocol’s founder looks for a way out.
Led by “his excellency” Justin Sun, Tron [TRX] has struggled to become a high-ranking cryptocurrency per its price. Moreso, the cryptocurrency had not been able to significantly pull itself out of anguish lately, despite its high market capitalization.
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Despite that, the native cryptocurrency of the decentralized blockchain-based operating system lost 7.43% in the last 24 hours. This decrease happened on account of the U.S. SEC probe of its founder.
Hands have been forced to abstain
Following the controversy, Tron’s Total Value Locked (TVL) lost its seven-day green momentum as it dropped 4.33%. The TVL measures investors’ interest in a particular blockchain or protocol. According to DeFiLlama, the Tron TVL dropped to $5.12 billion.
Although it was the same value as the Binance Smart Chain, the decline implied that the Tron blockchain quickly began to experience a lack of liquidity.
But this was expected as the “unregistered security” tag created dismay among investors who were initially willing to make smart contracts deposits.
Furthermore, the TVL was not the only casualty that felt the aftereffect of the SEC label. According to Coinglass, long-positioned traders also followed suit.
Information from the crypto derivatives platform showed that TRX’s total liquidations were as high as $2.09 million. Interestingly, $1.96 million out of this occurred within 12 hours as the development caught traders by surprise.
This wipeout was one that had not been recorded in a long while. A close examination of the data revealed that long liquidations on 22 March were $1.22 million.
However, TRX’s brief recovery seemed to have lowered the number at press time. And unfortunately, shorts who were late to the party have been handed the agony baton.
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Is partnership the way out?
However, Adam Cochran, an angel investor and a contributor at Synthetix [SNX], tweeted that he was not surprised by the development.
Cochran also opined that the Tron founder probably knew about the SEC issue before it went public. Hence, the reasons for dumping TRX and the BitTorrent [BTT] token.
Rumors we’re true then.
Sun immunity roasted.
Would expect his properties (Huobi, Poloniex and TrueUSD) all caught up in this? Maybe Tron and BitTorrent as well?
Explains why he was dumping his tokens and is probably going to push assets heavily into cash again. https://t.co/eFq6S4ekBf
— Adam Cochran (adamscochran.eth) (@adamscochran) March 22, 2023
Meanwhile, Justin Sun finally responded to the matter. His reply showed that he was dissatisfied with the SEC decision and he made his grievance known.
According to him, the complaint lacked merit. He backed up his stance, citing TRX and BTT adoption as legal tender in the Dominica Republic as backing.
The SEC’s civil complaint earlier today is just the latest example of actions it has taken against well known players in the blockchain and crypto space. We believe the complaint lacks merit, and in the meantime will continue building the most decentralized financial system.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 23, 2023
Nonetheless, Sun who also heads the Huobi Global team said he was open to talks with the regulator. He identified the early-day crypto regulation as a reason for repeated misunderstanding. Sun pointed out,
“We are eager to collaborate with governments and regulatory bodies globally that are dedicated to establishing transparent guidelines for regulating and working with the cryptocurrency industry given the important role it can play.”