Fledgling cryptocurrency startup TRON got its first big break three weeks ago, when anti-virus pioneer John McAfee shilled its TRX coin to his 500,000-plus followers. Days after that, the McAfee effect was on full display and TRON’s value had skyrocketed from a measly 4¢ to almost 29¢.
But it seems this astonishing bull run is gradually coming to a halt – and not without reason.
Tron is a long term Hodl. Those who are flipping it are losing out.
— John McAfee (@officialmcafee) December 26, 2017
Shortly after breaking into the top-10 cryptocurrencies by market share, TRON found itself attracting tons of negative press, implicating the company in a series of shifty activities: from plagiarism to misrepresenting announced partnerships. As a result, its price has since flopped back to under $0.10 – half of what it was less than 10 days ago.
In all fairness, such extreme amplitudes are nothing uncommon in the world of cryptocurrency – but this case calls for closer scrutiny.
For those unfamiliar (McAfee followers especially), the TRON blockchain network was built with the purpose to empower content creators across the globe to profit from their work by sharing it in a global entertainment system.
Indeed, all stars seemed to be aligning for TRON when CEO Justin Sun – who has previously appeared in Forbes’ 30 under 30 on two separate occasions – revealed that the company had reached a partnership with ‘Chinese Netflix’ Baofeng, which boasts more than 200 million users.
The announcement could have gone a long way to proving The Washington Post and its claims that TRON “doesn’t actually exist” wrong… but somehow the company managed to screw up even this news.
We #TRON are proud to announce the partnership with Baofeng group. Baofeng, aka Chinese @netflix, boasts more than 200 million users as a video portal giant and has achieved 8 billion CNY listing in Shenzhen stock exchange (300431.SZ). https://t.co/f9MJZcmSDD #TRX $trx pic.twitter.com/jZJF32mmvi
— Justin Sun (@justinsuntron) January 10, 2018
While the news was initially met with huge excitement, inquisitive internet sleuths were quick to point out that the announcement appeared to be slightly misleading.
Some users have noted that the comparison to Netflix seemed like a stretch, given that Baofeng was best known for providing video player software – not producing actual content.
In addition to that, TRON’s own announcement hinted that the partnership was not with Baofeng per se, but with a subdivision within the company known as the Blockchain Consensus Network (BCN). According to the announcement, the collaboration between the two companies would see BCN hardware support TRON and run full nodes on its network.
Though TRON is by no means the only crypto-startup to miscommunicate a partnership, what made this blunder particularly embarrassing is that the company was already dealing with heated backlash for purportedly plagiarizing its white paper from competitor Filecoin.
In fact, the scandal escalated so much that eventually the TRON boss had to take to Twitter to blame the issue on poor translations.
Our original version of the whitepaper is in Chinese and we have a very detailed reference to the latest Chinese version. The English, Korea, Japanese and Spanish versions are translated by the volunteers. The translation missed numerous important details not just reference.
— Justin Sun (@justinsuntron) January 8, 2018
Sun went on to suggest that the reason for the missing references was not plagiarism, but sloppy work from TRON volunteers who opted to translate the original Chinese version of the white paper to English, Korean, Japanese and Spanish. Still though, some have indicated that even the Chinese original seemed to be lacking proper citations.
The plagiarism claims swiftly became the talk of the internet, prompting cryptocurrency pioneer and Litecoin creator Charlie Lee to retweet the news, attracting even more attention to the scandal.
Eventually, Sun had to come forward and accept blame for this flub-up one more time, promising to do his best to avoid such misunderstandings in the future.
So I got a lot of hate for my TRON retweet. Shows that there are A LOT of $TRX bagholders. If you really believe in the project, some FUD is only a speed bump. When you are a top10 coin, you need to be able to survive some FUD.
These tweets help me block haters from my feed.😁
— Charlie Lee [LTC] (@SatoshiLite) January 8, 2018
I agree with you @SatoshiLite. A great project needs to be able to survive some FUDs. We accept constructive criticism and advice. You are a crypto pioneer and I am sure #TRON learns from #litecoin. We can collaborate and make the crypto world better! https://t.co/oMWYRv2esK
— Justin Sun (@justinsuntron) January 8, 2018
But these are hardly the only gaffes TRON has been embroiled in.
On another occasion, Sun had to once more step in to dispel rumors that he had cashed out his positions in TRON, after recreational investigators discovered a wallet that had transferred more than 6 billion TRX coins to various addresses.
Sun claimed that the address, which had been linked to a CryptoKitties account that contained the name ‘justin,’ belonged to an early investor, who happened to share the same name with the TRON CEO. In fact, the trading activity, Sun insisted, was intended to increase liquidity – not to sell TRX.
The Reddit account is not my account and also foundation account. It belongs to our private investor and market maker. We don't have an account in @GeminiDotCom . The market maker uses the account to trade and increase the liquidation of #TRX not sell $TRX.
— Justin Sun (@justinsuntron) January 6, 2018
One would think that after all of this chaos, TRON would learn from its mistakes and try to avoid further drama on all costs – but alas, the company has found itself in yet another controversy.
Two weeks ago, sharp-eyed users noticed that TRON had potentially violated licensing rights by borrowing code from Ethereum without attributing it with the correct citations.
The TRON Foundation was swift to respond to the claims, but its reply seemed wildly irresponsible, chalking up the missing references to “festinate time.” The company then went on to ignore the stolen code controversy for two weeks, until concerned Redditors resurfaced the issue over the weekend.
The renewed interest in the matter has since convinced the TRON Foundation to issue an official statement – though it seems that this statement was posted exclusively on GitHub, which is not the best place to clarify controversy, to say the least.
The design of TRON is based on it’s [sic] own system and the realization of codes,” the statement read. “[S]ome codes of Ethreum were used as reference, we didn’t note related license, from now on we will note the copyright ownership and promise this won’t happen again.”
With less than six months under its belt, TRON is still a fledgling company – and while one could blame the string of mishaps to its immaturity, ignoring its organizational woes could spell big trouble for the startup’s future.
What makes things even worse is that Sun and colleagues are yet to showcase legitimate use cases of its technology – which many have deemed vaporware. The worst part though is that it’s getting increasingly difficult to maintain credibility when your entire project is mired in controversy.
— Justin Sun (@justinsuntron) January 14, 2018
Say what you will, but a company can recover from bad publicity only so many times before it turns into a cautionary tale – and TRON might very well be approaching its own limit.
For what is worth, cryptocurrency startups face similar criticism practically every day… but it is getting difficult to ignore all the red flags that hint TRON is another disaster waiting to happen.
Published January 15, 2018 — 17:13 UTC