On Nov. 6, 2020, the anonymous developer of SharkTron, a newly founded DeFi project on TRON blockchain, allegedly fled with a whopping $15M in investor funds.
The unknown founder of the project, who goes by the pseudonym Daniel Wood on online platforms, made away with the funds after defrauding a large line of investors over the last month.
SharkTron was listed on TRON’s DeFi exchange JustSwap as a token mining project that enables investors to stake their TRX holdings. The staked tokens would then be frozen to mine SharkTron’s native SRX tokens.
Many investors were drawn to the platform that promised to reward participants with SRX, and the token quickly became one of the top 10 tokens of the JustSwap exchange.
Initially, the platform seemed legitimate and came with convenient terms of condition for users. Its smart contract even allowed users to unstake their funds any time for a 10%fee.
The scam now comes as a shock to investors who viewed the SharkTron project as genuine, given that it was hosted on the ever-expanding Tron ecosystem.
Tron CEO Possibly Bolstered the SharkTron Scam
The credibility of SharkTron got a boost when Justin Sun, founder and CEO of Tron, listed SRX in his voting list. Sun, an influential figure in the crypto sphere, even went as far as to add SRX to his own token mining project dubbed SUN.
Wood took full advantage of the popularity of SharkTron and went on to roll out a betting website named SharkDice, which was also used to swindle investors.
Some members of the crypto community now suspect that TRON was involved in the extensive scam. One Twitter user raised the alarm that the SharkTron platform had converted SRX tokens to DRAGON2 tokens and asked that Tron step in to protect users.
However, many in the crypto tweeter reported that Justin Sun and his team did little to freeze the scammer’s wallet. Another Reddit user lamented that the SharkTron website crashed shortly after he locked up his TRX funds.
The TRON team’s reluctance to respond to user complaints caught the attention of leading crypto expert Sydney Ifergan, who assured users that he would investigate the alleged scam.
This disturbing development couldn’t have come at a worse time for Tron, who recently achieved a new milestone. The platform settled over 1.3 Billion transactions a day ago, with the total number of TRX accounts now surpassing 13.7 Million.
Tron Accused of Whitelisting a Scam
The SharkTron controversy isn’t the first time Sun and his team have been accused of legitimizing high-risk projects.
Back in September, members of the Tron community accused the Just Foundation of whitelisting a DeFi project dubbed the Tron Supernode. As per a post on Tron’s subreddit, the project eventually pulled an exit scam, siphoning over $2M worth of TRX tokens.
Following the recent scams, many in the crypto community are now questioning the Tron Foundation’s vetting and whitelisting process for DeFi projects.