The Verge In-depth Investigation: Sun Yuchen's Tricks to Evade Regulation

• Bold and outspoken, Tron founder Justin Sun has always been a controversial figure in the crypto space.

• Sun is bolder than his reputation suggests, taking a riskier approach to financial regulation in the United States and China — and often trying to circumvent it.

• Will his rule-breaking and dangerous behavior finally get him punished, or will he get away with it again?

Justin Sun, an up-and-coming Chinese cryptocurrency tycoon, walks through the shiny loft atrium of the departure terminal at Incheon International Airport in South Korea. It was September 2017, the early height of the crypto boom, and Sun had every reason to be nervous after his first ICO. An ICO, or initial coin offering, is similar to an initial public offering of new stocks. But Sun wasn’t worried about the money he would make, or what he would lose if the token failed. In fact, his company, Tron, launched a token called TRX — which was a huge success, quickly selling out at a price of $70 million. The problem for Sun was that just days earlier, the Chinese government had banned ICOs altogether.

The state claims that ICOs are a vehicle for financial fraud, pyramid schemes, and other illegal and criminal activities — a credible claim given the introduction of hundreds of new and highly questionable cryptocurrency tokens in 2017. People buy into initial coin offerings for a variety of reasons: Sometimes it’s because the token’s underlying blockchain technology is promising, or sometimes it’s because they speculate that the cryptocurrency’s value could rise astronomically over time, as it has with Bitcoin.

But in many cases, token founders immediately sold all of their tokens for huge sums, destroying their value and the investments of all other buyers in the process. These are “exit scams” ​​or “pump and dumps,” and together, they defraud cryptocurrency buyers of billions of dollars. People are being scammed so frequently that the SEC can barely bring criminal charges fast enough. A week later, the Chinese government’s ICO ban is the reason Justin Sun is waiting for a flight at Incheon International Airport. Sources who heard him tell the story say Sun believes he is a fugitive, ready to take off at any time.

Chris Harland-Dunaway previously reported on Justin Sun’s acquisition of BitTorrent and how the cryptocurrency tycoon turned it into his own self-promotion machine.

Sun’s actual escape route from Beijing to Seoul is still shrouded in rumors. But the reason for his escape is simple: he likely knew the ICO ban was coming and went through with it anyway. Sun pushed TRX to complete its token sale a day before the ban was announced. Changpeng Zhao, founder and CEO of Binance, one of the world’s busiest cryptocurrency exchanges, tipped Sun off.

“They were in this together,” one former employee told me.

Allegedly, Zhao Changpeng learned about the impending government ban from his connections. But sometime after the ICO ban, Zhao Changpeng made it clear that his relationship with Justin Sun was not personal, saying, “We only talked business and didn’t really ‘hang out’ in any way.” But as recently as 2019, Zhao Changpeng and Justin Sun vacationed together on the shores of Lake Geneva. On social media, they gave the impression that they were on a business trip.

(Changpeng Zhao did not respond to a request for comment.)

It was 4 p.m. in Seoul when Justin Sun boarded his flight, and the captain waved the Korean Air plane across the tarmac. It turned its sky-blue fuselage onto the runway, the jet engines roared, and Sun was airborne. He was headed for San Francisco, completing the first of his many escapes. Sun learned early on that in the world of cryptocurrency, it was easy to make a lot of money, as long as you were ready to exit before it caught up with you.

Fifteen sources spoke to me for this story on the condition that their names not be revealed because they feared retaliation from Justin Sun. They are current and former employees of Sun in his cryptocurrency empire, various businesses in China and the United States. One source had firsthand knowledge of Sun’s businesses for other reasons. This story also relies on hundreds of pages of internal Tron documents that were leaked to me. They reveal the financial dealings of Justin Sun and his companies. In the process of reporting this story, more than one person believed that speaking with me could put their lives in danger.

Despite repeated requests, Sun never agreed to answer any questions. Harder LLP, the law firm acting as counsel for Sun’s company litigation, responded: “This story is yet another attempt by Mr. Harland-Dunaway to damage Sun’s reputation. Poloniex and BitTorrent will not respond to these allegations.

I also interviewed 18 current and former employees at BitTorrent and Tron who I spoke to when I was covering Sun earlier for The Verge. Together, the accounts paint a picture of a man desperate for success with seemingly boundless energy and little empathy for his employees , who pursue hype tactics and technology at odds with the U.S.-China trade war. But that story didn’t delve too deeply into the cryptocurrency that underpins Sun’s empire.

So I started paying attention to his money.

He fled because of the ICO ban. Months later, the value of Tron’s token, TRX, soared. Sun began to use his newfound wealth. He transferred millions of dollars into his U.S. bank account through a Hong Kong company called Davidyo Limited, some of which he used to buy a GMC Denali, which he apparently loved after seeing it on House of Cards. A few months later, Sun showed up at BitTorrent’s downtown headquarters in San Francisco, wearing his Gucci sneakers to talk business. He proposed to buy the struggling company, whose software focused on decentralized file sharing. He completed the acquisition for $140 million.

The story of Sun’s escape is well known in Tron’s San Francisco offices. In his telling, it’s a sob story of a businessman fleeing China to fulfill his God-given capitalist ambitions. When Sun emotionally retells the story at Tron, they often receive a message: “Justin Sun is crying again,” one former employee said.

But suddenly, Sun seemed intent on putting a Chinese stamp on the company. He decided to consummate the marriage between BitTorrent and Tron with a summit at Tron’s Beijing headquarters. It was his first time back in China, and employees had heard about it. After months of hiding from Chinese authorities, Sun apparently felt safe there now.

BitTorrent’s C-suite executives, fresh from San Francisco, were transported from Beijing’s Shangri-La Hotel to a shared office space and ushered into a glass-enclosed conference room. Sun took the table and read a typed speech, telling the executives that they were “his generals” and that together they would slaughter their competitors.

Executives split up to meet with different departments at Tron’s Beijing office. Dipak Joshi, BitTorrent’s chief financial officer, came back from his meeting looking shocked. “Dipak seemed to care very much about what he was learning,” said one former employee. When Joshi returned to San Francisco, he confided in another employee what he thought Sun’s China office was doing. “ He told me they were running an insider trading team in Beijing. ”

The “market-making team” was led by a technocrat named Baolong Xu. One day, Xu and a former employee were having lunch at a nearby restaurant that served traditional Chinese seafood. They were eating a stewed freshwater fish called crucian carp when Xu began to explain that his job was to “make sure the TRX price reached a certain level that Justin Sun wanted.” In the course of his explanation, Xu explained that Justin Sun had instructed them to buy TRX when his team knew that Tron planned to announce good news to the public. After Tron made the announcement, the value of the tokens soared and were sold at a huge profit. “I was a little scared,” the former employee told me. “He had been doing what’s called market making, insider trading.”

When another former employee asked Sun’s top lieutenant in Beijing what “market making” meant, he laughed and said, “You know how the Chinese do it, right?” He apparently explained that the market-making team’s job was to work with “whales,” wealthy cryptocurrency consumers outside of Tron. “We have ways to drive up the price of TRX,” he said. “You know those people with a lot of money but not a lot of brains? You can influence them to do whatever you want them to do.” The team’s operations have ventured into what is essentially wholesale market manipulation.

(Tron and Bittorrent did not respond to requests for comment.)

When BitTorrent’s CFO Dipak Joshi returned to San Francisco from the Beijing summit, he spoke with another employee about the possibility of illegal activity in Beijing. The former employee confessed to me, “I’m not a legal expert, but I know for sure it’s not good.” Joshi and the other employee decided they would be safest if they removed themselves from working on TRX as much as possible and actively ignored discussions about cryptocurrency. “No idea. Not involved,” the former employee said. I asked them if this was because cryptocurrency fell into a legal gray area, “Yeah. I’d say black area.”

(Dipak Joshi declined to comment.)

I spoke with three lawyers, experts in the intersection of financial law and cryptocurrency, and former regulators at the Financial Industry Regulatory Authority, about insider trading laws and cryptocurrency. Their views on whether insider trading laws apply to cryptocurrency: "You can file a case." They all also made it clear that TRON's Beijing market-making team appeared to be trading on "material non-public information." The U.S. Securities Exchange Act explicitly prohibits trading using "material non-public information" as an unfair advantage, with a maximum penalty of 20 years in prison.

In the United States, Sun is facing serious financial violations. But unlike Chinese authorities, who have a clear record of arbitrarily detaining businessmen, the U.S. legal system is slowly changing, which provides Sun with another escape hatch: legal debate.

Insider trading prohibitions apply to financial products called securities. “Securities” is an old-fashioned investment term from the 1930s — like stocks or bonds. Governments regulate securities because they are easily exploited by well-connected networks to make huge fortunes while keeping the public away from fair market conditions. The multi-billion dollar question is whether most cryptocurrencies are securities. It depends on the circumstances. But if a crypto token qualifies as a security, insider trading laws apply.

Sun faces a second major danger. If a cryptocurrency is to qualify as a security: it must be registered with the Securities and Exchange Commission (SEC). Registration means that a cryptocurrency company opens its accounting books for inspection and publicly discloses its performance. Selling "unregistered" securities is a crime punishable by up to five years in prison in the United States. Despite this, a large number of blockchain companies have rushed cryptocurrencies into ICOs without registering with the SEC. So far, the SEC has quietly conducted multiple settlement talks with cryptocurrency businesses and even charged company executives with selling unregistered securities.

Regardless of the conclusion of this lawyerly debate over cryptocurrency, Sun set about ensuring Tron’s legal legitimacy. He began approaching lawyers to find legal opinions that could protect his cryptocurrency business. He knew that his path to wealth in the United States was littered with legal traps to avoid.

Since the SEC is the regulator that might come after Sun, it makes sense that one former employee heard him musing in a meeting, “You know what would be amazing? If we had someone from the SEC join the company.” Sun set his sights on David Labhart, an eight-year veteran of the SEC’s compliance department, as Tron’s chief compliance officer.

Under questioning from Sun, Labhart proposed overhauling Tron’s compliance process, working directly with BitTorrent’s legal counsel to ensure everything about Tron was legal and compliant. Unsurprisingly, the former regulator thought like a regulator. “Justin Sun was very skeptical,” said one former employee, who countered that Sun “was trying to convince him that he wanted [Labhart] to prove specifically that TRX was not a security token but a utility token. ” (One securities law expert told me that there was no reason to believe the “utility token” argument was valid, and no judicial opinion would describe the token as such.)

The former employee described Labhart’s bewildered expression as, “Are you kidding me? I’m from the SEC.” The conversation stalled. Then, “Justin Sun asserted his dominance, like, ‘I’m the boss, you’ll work under me, and these are my demands.’” Despite his obvious concerns, Labhart signed the contract.

After hiring Labhart, Sun seemed emboldened. Within days, he conducted another initial coin offering. ICOs were not banned in the United States as they were in China. The new token was the BitTorrent Token, or BTT. One former employee, who is enthusiastic about Sun, explained that when he acquired BitTorrent, it had more than 100 million active users. Issuing tokens would be extremely lucrative, “a no-brainer.” Labhart had much less understanding, a former employee told me. At the time, the SEC provided little legal guidance on how to conduct an initial coin offering that didn’t sell securities. According to Labhart, it was vague, and very dangerous.

One former employee explained that Sun allegedly wanted Labhart to write a legal opinion to protect him in case he was later charged for selling unregistered securities and “avoid liability.” Apparently, Labhart refused. Sun then announced that the company would be giving away BTT to the public for free, a so-called “airdrop.” These crypto giveaways were a marketing ploy that was also dangerous because it made it look like marketing for an investment opportunity, a security. “I think that was the final straw for Labhart.” He resigned.

“Justin Sun will get in trouble, but he doesn’t care,” one former employee believes. Sun ordered the Chinese office to proceed with the airdrop.

Labhart declined to comment.

Justin Sun was still at risk. He was visibly angry after trying to get BitTorrent’s general counsel to write a finding to protect his token, TRX, from securities law regulation. “Finally, they got someone — a lawyer from Hong Kong — to write a finding that TRX was a public utility.” The former employee was confused by the idea. “Can we do that? Hong Kong? Are you sure? It doesn’t really make sense,” they remember saying. The former employee was never informed of the Hong Kong lawyer’s identity, nor was it clear if they were licensed to practice law anywhere in the United States.

One crypto-finance lawyer I spoke with warned that “business executives should never go to a lawyer until they get a ‘yes.’ You’re not looking for advice — you’re looking for a yes.” Sun was often able to find them at his companies, and as his business decisions became more adventurous, there was little resistance to Labhart’s approach. It seemed that Sun viewed lawyers as disposable, like he had the ability to leave them behind, tainted by the actions they had unwittingly facilitated, while he stared at the way out.

Justin Sun’s crypto empire underwent a radical change when he purchased a cryptocurrency exchange called Poloniex, which functions like a stock exchange but lists tokens.

Poloniex was a very popular and very risky place to trade cryptocurrencies. “Poloniex was the altcoin casino,” said one former employee. “It would list everything.” That is, the exchange listed tokens (“altcoins”) with incredibly tenuous legitimacy. The trading community was ruthless. “People would pump and dump it constantly, and it was like the complete Wild West,” said one former employee.

Previously in 2018, Poloniex was acquired by a crypto finance company called Circle, which sought to purge illegal activity from the exchange and turn it into something close to the Nasdaq stock exchange, but for crypto. They enforced new Know Your Customer rules, or KYC, which are usually set by governments but also written by companies to proactively prevent fraud on their platforms. This usually means asking users for a government-issued ID. KYC information is often checked against a database of known criminals banned from the international financial system, but it turns out that Poloniex's previous lack of customer vetting was what made it so attractive in the first place. Once KYC was enforced, trading volume plummeted.

Sun’s new control was revealed during a company-wide event when he slid out through a sliding side door. “This is really gangster,” one employee said. Sun plans to return Poloniex to its earlier gray area, and some employees are eager to get back on board the “Poloniex pirate ship.”

Justin Sun moved Poloniex to the Seychelles. The archipelago has few regulations for cryptocurrency trading. The fact that the headquarters of about 50 to 70 Poloniex employees is located on High Street in downtown Boston is irrelevant. The Bostonians are now employed by a company called Augustech, LLC, which is designed to provide "technology and IT services" to Poloniex Seychelles. "The corporate structure is like a Russian nesting doll, confusing everyone," said one former employee. It's not only confusing — employees say it's also a pain in the ass for any customers who want to sue Poloniex. They may have to go to court in the Seychelles.

The corporate shakeup was conducted by Sun’s new favorite lawyers, Fenwick & West, a blue-chip firm that also represents Silicon Valley giants such as Amazon, Google and HP. Employees say Fenwick & West is now part of his personal legal entourage. But according to one former employee, Sun is taking bigger risks with his new law firm. For the former employee, the combination makes Fenwick & West “the scariest lawyers I’ve ever met.”

(Fenwick & West did not respond to a request for comment.)

Elsewhere at Poloniex, approvals for token listings were relaxed. Sun also began impatiently rolling back Poloniex’s know-your-customer rules, which were slowing user adoption in China. The impasse infuriated Sun, one former employee said. “Fake KYC!” he screamed at one meeting. “Fake!”

In order to approve new customers as quickly as possible, Poloniex built an automated KYC system, but according to a former employee, this was permissible. They explained that it essentially rubber-stamped any type of government ID — “it didn’t matter if they submitted a picture of Daffy Duck.”

Justin Sun also seemed to have found a completely different way to use Poloniex. As one former employee put it, “I think over time he started to see all the possibilities of using Poloniex more or less as his personal bank.” But there was just one problem: All the money on the exchange belonged to the users.

It started with a project formally known as “Operation Couch Cushions.” Poloniex’s digital architecture was old and oddly programmed, so it became common for small amounts of money to get trapped in the old exchange’s digital cracks, like buried deep in a couch. Employees referred to the missing traces of cryptocurrency as “dust,” and eventually, engineers discovered a gold mine. For years, customers accidentally deposited bitcoin into wallets designed only to accept a popular cryptocurrency called Tether. The bitcoin was blocked from the wallets in a kind of suspended animation, undelivered. Users were unable to recover it, seemingly forgotten for years.

By 2021, those bitcoin fragments would be worth a fortune. When Sun learned of them, he ordered engineers to collect them. Almost every day, engineers would find a new pocket of change. “You could turn over a rock and find a million dollars,” said one former employee. When the rest of the company learned of the operation at an all-hands meeting, many objected. They argued that the money didn’t belong to the company.

When the engineers finished their search, their rough estimate of the dust they found was around 300 bitcoins, or about $20 million.

Gradually, employees involved in the operation realized that Bitcoin would never be an “alternative income” for Poloniex. According to current and former employees, they knew that Sun would personally use Bitcoin. According to a former employee, Sun kept asking people involved in the project one question: “Where are my 300 Bitcoins?”

Over the course of four hours, in hundreds of transactions, nearly all of the Bitcoin dust was siphoned from thousands of old Tether wallets. All told, it was 230 Bitcoins, worth a little over $10 million today.

All the dust settled in an anonymous wallet. Within half an hour, that anonymous wallet had transferred almost all of it to a public wallet on Poloniex. Here, amid the massive withdrawals and deposits of Bitcoin by Poloniex users, the trail of the dust disappeared.

Taking a step back and looking at blockchain transactions, the former employee said that the simultaneous unfreezing and transfer of large amounts of Bitcoin dust could only be performed through Poloniex’s code scripts.

One former employee pointed to a clause in Poloniex’s terms that allowed them to deduct a “dormant fee.” To them, it seems like the terms and conditions could be changed to at least provide a policy safeguard to remove Bitcoin dust.

Although Sun requested Bitcoin, there’s no visible blockchain evidence that he personally received it. Former employees explained that Poloniex public wallets have so much user funds flowing through them 24/7 that they incidentally obscure any fund tracking. But ultimately, the legal distinction between Sun himself or Poloniex receiving the money may be moot. Andrew Verstein, a UCLA professor and attorney who specializes in cryptocurrency and financial crime, told me that because Sun is the sole owner of Poloniex, he would be held accountable regardless. “ It is absolutely a crime to use customer funds for personal use, ” Verstein said.

In interviews, none of the former employees believed Sun would be held personally accountable for his malfeasance. Most seemed to believe he existed beyond the fingertips of U.S. law.

The legal ambiguity surrounding the initial explosion of cryptocurrency is one reason that Justin Sun appears to be legally invulnerable. It seems that long-standing securities regulations should apply to crypto in obvious ways, but some have not been tested, such as insider trading laws. Some might even argue that this is not a new scenario, and that in some cases, cryptocurrency is simply repeating some of the same mistakes and scandals that have shaped financial law in the United States and many other countries.

One former Poloniex employee believes Sun has found a way to live in the shadow of the law: " Justin Sun's tolerance for risk is ridiculously high . And I don't know if it's because he knows more than I do, it's like he just completely believes in his bones that it's legally set up to protect himself."

It was during a meeting about a legally risky business decision that Sun hinted at how he would actually protect himself. A former employee was present. “What’s the big deal?” Sun asked. “The worst that could happen is that I’ll never come to the U.S. again.”

All along, Justin Sun seems to be taking a different approach.

Sun has his eye on one island nation, former employees told me. In 2018, Sun sent a Tron employee to a blockchain conference in Malta, where they attended a VIP party inside the presidential palace. Caviar and champagne were served by a giant pool, with string lights flickering overhead. There, surrounded by waiters, a medley of crypto celebrities, and business journalists, Tron representatives met with Malta’s then-president, Marie-Louise Coleiro Preca. The meeting was perfunctory, but she told the Tron emissary, “We welcome Tron’s investment in the Maltese economy.”

The next day, Tron employees went to the office of Malta’s Minister of Economy and Industry, Silvio Schembri. They sat together in a conference room. The envoy’s goal was to arrange a one-on-one meeting between Sun and Joseph Muscat, the country’s former prime minister who has been accused of corruption. In a preliminary meeting with Schembri, the finance minister said Sun “needed to invest first.”

Sun invested in secret. At the time, Malta was notorious for essentially selling citizenship to wealthy people from around the world for about $1 million, as long as they settled on the island. The passport-selling process was officially called the Individual Investor Program.

The program was widely criticized for being vulnerable to corruption, including by legendary Maltese journalist Daphne Caruana Galizia, who was later assassinated over her reporting.

(The Maltese government did not respond to a request for comment. Silvio Schembri also did not respond to a request for comment.)

Sun began renting a lavender apartment in Malta, on a narrow street in the resort town of Sliema, with white decorative security bars on the windows. Malta's business registry records also show that Sun set up a company called Tron Limited using his Chinese name. But sources involved in the company's formation could not say whether it conducted any meaningful business. According to them, Sun made business investments that may have stimulated the Maltese economy.

At the same time, Sun wired thousands of dollars to the lawyer assisting him in his citizenship application. According to a prominent Maltese immigration lawyer, “individual investors” “must contribute at least €650,000 to Malta” to obtain citizenship. It is unclear how Sun made the contribution. Sun received his Malta residence card and dissolved his Malta company, Tron Limited, in 2020.

In some ways, Sun’s Maltese citizenship is not exceptional, since he has other destinations to flee to. He claimed in his court statement that he is also a citizen of the Caribbean islands of St. Kitts and Nevis. Another former employee told me that Sun casually bragged about intending to buy a passport from the small West African country of Guinea-Bissau. But Sun’s connection to Malta has another, more important secret. According to multiple Tron employees, Sun has made two additional €50,000 “investments” in Malta. He has applied for citizenship for his father and mother.

Sun’s desire to bring his parents along suggests that Malta could be his final destination if he gets caught in the crosshairs of U.S. or Chinese regulators. Other countries to which he claims allegiance on paper appear to serve more transient interests. After all, if you don’t live in a place, you don’t owe it anything.

Justin Sun is something of a connoisseur of bank accounts. When Sun said he would pursue citizenship for Guinea-Bissau, he urged an employee to start opening bank accounts there whenever feasible. In the United States alone, he controls at least 13. When he opened a checking account at First Republic Bank, he was vague about his occupation, calling himself a technology services provider and telling a former employee never to disclose his cryptocurrency work to bankers. He also told them that banks often froze his money and that he needed to spread his wealth across multiple accounts. The employee believed Sun's bank account strategy was designed to avoid falling into the trap of anti-money laundering laws. For a cryptocurrency tycoon like Justin Sun, cashing out large amounts of cryptocurrency can be a tricky proposition.

Sun’s many bank accounts may simply be waypoints for moving funds around. As one former employee with knowledge of Sun’s banking operations speculated, “If he had to cash out all his crypto, he would have to do it outside the U.S. and China,” where they would be subject to intense scrutiny or outright ban.

According to another former employee, Malta was not only a physical escape route, but also a monetary one. Maltese citizens have access to banking services throughout much of Europe. Sun allegedly urged an employee to submit an application to open eight bank accounts there. One potential explanation for Sun’s excessive number of bank accounts comes from a former close associate of Sun, who told me that he was looking for ways to pay as little tax as possible. As one former employee put it succinctly, “He thought taxes were stupid.” As Sun’s close associate explained, “Every billionaire, all they think about is: tax evasion, tax optimization.”

Multiple former employees told me that Sun could never return to China. Sun sidestepped the ICO ban, and amid the trade war, he ignored attempts by Chinese authorities to contact him and demand that he abandon a much-publicized lunch with Warren Buffett (who also invited President Trump). China has since detained six senior Tron employees.

His exact relationship with Chinese authorities has been difficult to speculate, but he was recently appointed to an academic position at the Central Party School of the Communist Party of China to promote blockchain development. On the surface, Sun appears to have pivoted his strategy toward China, possibly out of self-preservation.

Just before Christmas, a former employee got a call from the front desk of their apartment building. "The FBI is coming," they said. The former employee was startled: "Wait, you said FBI, FBI?"

The former employee wasn't home, but about 10 minutes later, the FBI called. The agent on the other end arranged to meet them at a dessert restaurant in Koreatown, New York. The former employee had a friend accompany them to the meeting, just in case this was a prank by a dangerous person. The former employee walked into the restaurant, bought a pastry, and sat down.

A man in a dark jacket and jeans walked in and held his wallet up to the employees at the front of the restaurant, allowing it to open and reveal their identity. They waved him over and he took a seat at the table of former employees. He identified himself as an IRS agent. He said FBI agents were also in, but they were still looking for parking.

While they waited, IRS agents told the former employee that they were investigating Sun, but didn’t really know what to look for. The FBI agents finally arrived and asked about various employees in the U.S. and Beijing, rumors of beautiful models flying Sun around the world, and whether he was doing business privately. The former employee got the impression that the agents were interested in potential tax evasion. They even called Sun a “criminal with the IRS,” the former employee said. The agents handed over a letter asking the former employee to forward them information related to the investigation, listed a court date, and said, “It sounds like you really want to help us.” To which the former employee said, “Oh, yeah, because I want to screw him.” The agents were amused and said they’d heard about this before.

Other employees who worked for Sun have received grand jury subpoenas. The U.S. Attorney’s Office for the Southern District of New York, which typically handles financial crimes on Wall Street, is seeking criminal evidence against Sun.

The investigation is being led by the FBI. Sun has hired a top white-collar defense attorney named Telemachus Kasulis, who has prosecuted fraud cases for the U.S. Attorney’s Office. (Kasulis did not respond to a request for comment.)

Meanwhile, a former SEC lawyer has been tasked with shepherding employees through the grand jury subpoena process. A source close to the investigation predicts they will try to fend off the subpoena. But it may be futile. As the source points out, any number of Sun’s employees may already be cooperating with the government. “They’ve been keeping this a secret for a long time,” they say.

As the investigation into Sun draws to a close, the grand jury is exploring a long list of potential charges. According to the subpoenas, one of which was shown to me, they are: wire fraud, conspiracy or intent to commit wire fraud, racketeering, money laundering, spending the spoils of a criminal enterprise, lying about failing to register securities, aiding and abetting a crime, and conspiracy to defraud the United States.

(The SEC, which prosecutes securities fraud, declined to comment. The IRS could neither confirm nor deny the existence of an investigation but welcomes tips about financial crimes. The FBI and the U.S. Attorney’s Office for the Southern District of New York did not respond to requests for comment.)

Justin Sun left the United States before the pandemic hit and never returned.

Cryptocurrency is full of colorful personalities and idealistic people who want to push the boundaries of financial possibility. "I think there are a lot of people who really believe in the power and promise of crypto. It's really a generous, giving community in a lot of ways," explained a former employee who worked closely with Sun. " I think it makes you too credulous. I think scam artists anywhere can easily find a target . Unfortunately, the crypto community is rife with easy targets."

These “easy goals” are not just daily investors – many of them working in cryptocurrencies. As one former employee described it, “delusional optimism” combined with a lack of legal guidance from regulators has led to an omnipotent atmosphere worsening. Some of Poloniex employees are unsure whether Justin Sun’s Bitcoin dust robbery was illegal. When the people around Justin Sun couldn’t tell the difference, he easily got away with nothing.

Justin Sun’s ending is unclear. Over the past two years, he has spent millions on artworks and NFT auctions, including $500,000 in digital images of rocks and $78.4 million in sculptures by Alberto Giacometti. He also revealed that he won the Blue Origin auction for a high price of $28 million, winning the seat of one of the spacecraft for space.

Sun also announced that he is now the Grenada ambassador to the World Trade Organization, where he said he would advocate favorable cryptocurrency policies. Thanks to the new title, one of his senior staff sent the right guidance to the staff on Slack how to correctly refer to Sun as “His Excellency.” Former employees speculated that the ambassador position was to fight for diplomatic immunity. But by far, he was most notable to use his public office to promote Tron. After Russian troops invaded Ukraine, Sun met with Russian representatives to the WTO and tweeted: “We discussed how to implement humanitarian use cases of blockchains such as Bitcoin/TRON for Russian civilians who cannot use the financial payment system.” The tweet was later removed.

(A WTO spokesman said they were not aware of the incident and therefore did not comment. They also said the WTO has no right to prohibit any representatives from attending the meeting and they have no further comments.)

If the United States does sue Justin Sun, it is with me that every country where he has citizenship has valid extradition treaties, except for China and Guinea-Bissau - if the claim he made to a former employee that he purchased citizenship is true.

Over the past year, the international community has shown that they are tired of all kinds of small countries acting as legal trapdoors for tax avoidance and financial crimes. It is hard to imagine that Justin Sun can always be one step ahead, although this may still be possible.

When I spoke to an employee who told me about operating the sofa cushions, I questioned them and asked why Justin Sun might have taken such a shameless thing. The staff guessed without hesitation.

" If he had violated so many laws at such a fast pace, no one could catch up with him. "

So far, no one can. So far, it has worked.