Devaluation of WBTC on Poloniex Worries Investors and Questions Justin Sun’s Reservations

Poloniex, the cryptocurrency exchange platform under the tutelage of Justin Sun, is facing serious questions about the authenticity and security of its Wrapped Bitcoin (WBTC) product, traded on the Tron network. Currently, WBTC is priced at a significantly lower value, 79%, compared to traditional Bitcoin (BTC), in a worrying situation of price detachment.

This striking discount of almost 20% is accompanied by an equally egregious silence on the location and management of the bitcoin reserves that back WBTC. Poloniex has dodged requests to disclose details about reserves, creating uncertainty among users and investors. A spokesperson for the platform mentioned that, “We are committed to maintaining transparency and hope to complete the proof of reservations as soon as possible.”

Interestingly, WBTC on Tron, offered by Poloniex, constitutes a substantial portion of the bitcoins on HTX, formerly known as Huobi. According to recent data, more than half of the bitcoins on HTX correspond to WBTC, totaling around 14,400 bitcoins, which is equivalent to almost US$900 million. This connection between Poloniex and HTX is reinforced by the fact that the Poloniex support page links to the ‘Huobi Platform User Agreement’.

Furthermore, JustLend, another project associated with Sun, has in its portfolio almost 92 thousand bitcoins in WBTC on Tron, valued at approximately US$5.6 billion. This grouping of entities linked to businessman Justin Sun, directly involved with WBTC on Tron, raises concerns about the stability and security of these operations, especially in a scenario of sharp devaluation and lack of clarity in reserves.

For investors and users of the cryptocurrency ecosystem, the current situation at Poloniex raises critical questions about the reliability of exchange platforms and the integrity of the products offered. Lack of full proof of reserves and lack of transparency can negatively influence market confidence, especially for innovative products like WBTC on Tron.

Disclaimer:

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.