- Crypto expert accused Justin Sun of using wash-trading on the crypto exchange Huobi.
- LeClair claims USDT deposits on HTX are being swapped for stUSDT without users noticing.
- Sun swaps fake stablecoins for USDC and USDT to increase his USD liquidity, according to the expert.
In a series of posts on X (formerly Twitter), crypto expert Dylan LeClair called out prominent crypto figure and founder of TRON, Justin Sun over what he regarded as a “web of deception.” LeClair, in a long trail analysis, tied knots between Sun, his enterprises, and “fake” stablecoins being swapped for USD.
In particular, Leclair accused Justin Sun of wash-trading crypto tokens on the crypto exchange Huobi, now known as HTX. Sun took over the exchange in an acquisition last year, which LeClair believes now sits at the center of the opaque transactions.
While citing several data, LeClair alleged that following the exchange’s acquisition, Sun has been swapping the deposited USDT with stUSDT without customers noticing. At the time of the takeover, HTX had $1.5 billion in USDT deposits but recent data shows that has reduced significantly.
According to LeClair, stUSDT is a token controlled by Sun that claims to provide yield by investing in “Real World Assets” such as Treasury bills. However, LeClair said on-chain analysis and data show that no such investments in RWAs occur.
Furthermore, LeClair referenced the findings of ChainArgos, which said
We’ve seen this one before — a closely associated ecosystem managed and run by one of the crypto’s biggest personalities and a “staking” system that doesn’t send the stablecoins where they’re advertised.
As per the analysis, stUSDT and USDT are considered the same assets on Huobi, as evidenced by the lack of stUSDT trading pairs. LeClair continued by citing Bloomberg data, which shows that USDT reserves have declined in contrast to the growing stUSDT, which is now 14.5% of the exchange’s total reserves.
Pointing to on-chain data, LeClair explained that what Sun does is mint TUSD, which is then used to mint stUSDT, then swapped for USDT on Huobi. The USDT is then sent to JustLend, controlled by Sun, with Huobi users holding stUSDT instead of USDT.
More worrying are the analysts’ claims that Sun has been using these complex transaction methods to increase his USD liquidity by buying USDC and USDT heavily. “Huobi users, get out of USDT, into another asset, and withdraw immediately,” he ended
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