Poloniex denier Justin Sun, CEO of Tron.
Alt coins,  People

Poloniex Boots DigiByte after founder’s Tron attack

Calling someone you’re doing business with a ‘con man’ is a pretty good way to ensure you won’t do business with them again

Cryptocurrency Exchange Poloniex is delisting DigiByte’s DGB token after a twitter feud that erupted on Dec. 4.

Blockchain company DigiByte lost its DGB token a place on the Poloniex exchange after CTO Jared Tate went on an eight-part Twitter rant. That targeted Justin Sun, the founder of Tron (TRX). 

In it, he called Tron a “blatant con job,” and Poloniex a “$TRX shill factory.”

Sun recently admitted he was part of the investor group that bought Poloniex from USDC stablecoin-issuer Circle. That came after he initially denied involvement, CoinDesk reported on Nov. 12

Exactly four hours after Tate’s tweets, at 7:18 pm, Poloniex announced via its Twitter account that after a “careful review,” it had decided that “DigiByte is not qualified for our listing service” and will soon be delisted.

The fact that the announcement was tacked onto a tweet denying one of Tate’s charges made it pretty clear what was carefully reviewed.

Poloniex’s Nov. 27 purchase of Tron’s TRXMarket decentralized exchange added another connection between the two companies. Renamed Poloni DEX, the decision to buy involved “multiple rounds of intensive research,” Poloniex said.

“Decentralization theater”

The core of Tate’s allegation was that Tron is centrally controlled despite claiming to be a decentralized blockchain.

He said that Tron “runs on a grand total of 27 ‘Super Representative’ nodes mostly controlled by Sun and the Tron Foundation.” 

Brian Fabian Crain, CEO of Staking service provider Chorus One, added that 25 of those are controlled by just two companies, Tron and cryptocurrency exchange Binance.

Crain called that “[d]ecentralization theater.” Centralized exchanges, he said, “are an existential threat for crypto.”

Sun’s somewhat sketchy reputation doesn’t help. Sino Global Capital Capital CEO Matthew Graham chimed in with a story about talking to someone who knew Sun since childhood. He told the venture capitalist that he had not invested in Tron. 

“[H]e said something like “I didn’t invest in Tron exactly because Justin and I go way back and I know him well,” said Graham.

The same old tune

Given the nature of Tate’s criticism, it’s hardly surprising that Poloniex decided to cut ties, tweeted Meltem Demirors, the chief strategy officer of investment advisor CoinShares.

“[E]xchanges are privately owned companies and are under no obligation to list or trade any asset,” she pointed out. 

In a similar case, Changpeng “CZ” Zhao booted Bitcoin Satoshi Version (BSV) off Binance on April 15. That was after BSV founder Craig Wright started suing people who denied his claim to be Satoshi Nakamoto, the creator of the Bitcoin. 

That didn’t raise as many hackles. Of course, the vast majority of the cryptocurrency community thinks Wright is a liar.

Still, Bitcoin developer Jimmy Song made a similar decentralization comment on Twitter at the time. 

“Delisting coins is satisfying short term, but ultimately bad,” he wrote. “It’s giving the perception that exchanges are king-makers or legitimatizers. They are not.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.