TRON (TRX) Founder Justin Sun Pledges $40M USDT Injection After Binance’s Hack
Justin Sun announced he could inject the equivalent of 7,000 BTC in Tether (USDT) to compensate for the loss of Bitcoin (BTC) after the recent Binance hack.
Binance has met an unlikely supporter after the recent hack. Justin Sun, co-founder of TRON (TRX), has pledged to refill the lost sum and engage in trading to boost liquidity.
Binance lost 7,074 Bitcoin (BTC) late on Tuesday, after an outbound transaction managed to circumvent the checks and ended up in a series of addresses. Binance will cover the funds through its SAFU insurance program, not leaving traders to absorb the losses.
But Justin Sun’s move did not generate positive reactions - and in fact led to skepticism. Currently, it is unlikely that he will manage to deposit the funds, as Binance has closed deposits for a week until the internal investigation runs its course. Additional skepticism comes from the fact that Sun would donate USDT, an asset that has been compromised in the past weeks.
Sun also mentioned he would directly buy TRX on Binance, a move that could appreciate the asset. Following the news, TRX indeed appreciated slightly to $0.024, but is still pressured by the general downturn in the markets.
It is unknown if the USDT offered by Sun is the original asset based on the Bitcoin blockchain, hosted in the Omni layer, or whether it is the newly issued TRON-based USDT. Recently, Sun blocked the planned giveaway of $20 million’s equivalent of USDT-TRON, after it became clear that the issuer of Tether only backed 74% of the token’s price with fiat in a bank.
Additionally, Binance had a strained relationship with USDT. In the past months, Binance held USDT in a large-scale cold wallet, where the holdings were close to 800 million coins. In the past week, the exchange distributed the token to multiple addresses, obscuring the exact size of its holdings.
Now, the best-known Binance Tether wallet holds just 10% of its previous stash, around 79 million coins.
After the Binance hack, the Omni Explorer showing USDT transactions had a significant overload and stopped working for a while as of 6:30 UTC on Wednesday. But for a short while, the Binance wallet showed a series of “invalid” transactions, each close to 1 million USDT. For now, it is unknown whether the Binance hack affected the USDT holdings.