Is Chinese crypto entrepreneur Justin Sun in trouble?

July 25, 2019 12:10
Justin Sun has cited health reasons for postponing a lunch meeting with Warren Buffett, but not everyone is convinced with the explanation. Photo: Bloomberg

Chinese cryptocurrency millionaire Justin Sun Yuchen has been in the media spotlight after he won a charity auction, with a record US$4.75 million bid, for a lunch with legendary US investor Warren Buffett last month.

But suddenly, he had to postpone the lunch. Rumor has it that Sun was caught in a number of legal issues, including allegations about running a porn site, illegal gambling and money laundering.

Sun dismissed such talk and said the Buffett lunch meeting was put off due to health reasons.

The 28-year-old entrepreneur had an impressive education background. He graduated with a Bachelor of Arts degree in history from Peking University. Then he got a Masters' degree from the University of Pennsylvania.

Sun was also among the first batch of students who graduated from the Hupan University which was founded by Alibaba Group chairman Jack Ma in Hangzhou.

Initially, Sun was determined to become a writer. He did win a major competition. But his exchange student experience in Hong Kong and exposure in the US are said to have changed his goal.

Already a famed KOL, or key opinion leader, at school, Sun leveraged his popularity and created a voice live streaming app Peiwo in 2014.

The app allows strangers to connect with each other through short voice clips. However, the social media app gradually turned into a phone-sex platform.

China’s state Xinhua news agency has criticized the app for spreading pornographic content and facilitating escort services.

Sun began to feel the cryptocurrency craze when he was studying in the US, which may have led to his another business -- Ruibo and TRON.

The former is a cryptocurrency trading platform while the latter is Sun's own crypto unit.

TRON ranks 11th globally, but its market capitalization is only US$1.5 billion, nothing compared to Bitcoin’s US$179 billion.

Both the Sun businesses are suspected to have breached the law, as per mainland media reports.

It would be interesting to see if the flamboyant, high-flying startups founder will be able to dig himself out of the trouble.

This article appeared in the Hong Kong Economic Journal on July 24

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist