What happened: Justin Sun, founder of cryptocurrency platform Tronix (known as TRON), found himself embroiled in a controversy related to a $30 million Chinese Ponzi scheme, known as the “Wave Field Super Community.” Victims say Sun’s silence about the scheme—which claimed to be associated with TRON—allowed it to spread more widely. The TRX token benefited from increasing interest and trade volume as victims had used TRX to invest. Launched in January, the investment “fund” shut down unexpectedly on June 30 leaving investors without their capital, which reportedly led one victim, a single mother, to commit suicide.
Why it’s important: The Chinese government banned cryptocurrency exchange services and initial coin offerings (ICOs) at the end of 2017 in an effort to clamp down on scams and fraudulent activities. However, illegal activities still plague the country’s crypto space. Last month, Sun offered a record $4.57 million bid to win an eBay charity auction to have lunch with billionaire investor Warren Buffett, who previously compared Bitcoin to “rat poison” and said it “attracts charlatans.”