The blockchain protocol Chain is evaluating legal action against Justin Sun, the founder of TRON, due to allegations of market manipulation. On January 24, Sun claimed that Chain engaged in activities that could harm cryptocurrency exchange users, specifically highlighting the use of high leverage and contracts.
Legal Steps Against the TRX Founder
Following intense discussions on the X platform, Chain officials announced their intention to take legal action against Justin Sun. Sun argued that Chain’s practices pose risks to cryptocurrency exchange users and suggested that Chain should be reported to the SEC and DOJ.
Justin Sun has urged major exchanges like Coinbase, Kraken, Bybit, KuCoin, and HTX Global to investigate Chain’s activities. He warned Chain about issues related to high leverage and contract usage. Despite facing several devastating allegations over the years, Sun has managed to remain a prominent figure in the crypto space.
What’s the Reason Behind This?
These developments occurred after a significant increase in the market value of the XCN token. The token appreciated by 149% in one day and nearly 400% over the week. Sun’s claims complicated the situation further by suggesting that these price movements were linked to manipulation.
“The Chain team is not actively engaged in trading XCN and is not involved in market manipulation directly or indirectly. We take these allegations very seriously and are considering legal avenues against Justin Sun.” – Chain Officials
Chain has explicitly stated that it does not engage in the trading or manipulation of the XCN token, indicating that XCN is governed by OnyxDAO. The company emphasized its commitment to transparency and accountability while revealing that they are exploring legal options against Sun.
Founded in 2014, Chain has raised over $40 million from investors such as Pantera Capital and Citigroup. After being acquired by Stellar in 2018, the company restructured as Chain in 2020, focusing on developing decentralized technology in the blockchain sector.
Recently, Justin Sun announced a strategy to halt ETH sales and tax Layer 2 solutions to raise the ETH price to $10,000. He also criticized Coinbase for not having a reserve proof system, while highlighting the security advantages of Wrapped Bitcoin 
$100,939. Notably, after Sun’s involvement with WBTC, Coinbase deemed it too risky and delisted the token pegged to BTC.
The tension between Chain and Justin Sun is among the notable developments in the cryptocurrency market. Proving allegations of market manipulation in this case may be challenging, and both parties are expected to exercise caution in the evidence presentation process. Such disputes in the crypto market highlight the regulatory gaps within the industry.
