Binance has threatened Justin Sun who allegedly attempted to farm SUI tokens through the exchange's Launchpool
In the ongoing war between whales and retail investors, institutions are caught between a rock and a hard place.
Over the long weekend, Tron founder Justin Sun found himself in yet another controversy, sending 400 million TUSD to Binance.
The world's biggest exchange had announced it was adding SUI to its Launchpool, which allows users to stake their crypto to earn rewards in the form of new tokens.
On Sunday, Binance offered SUI rewards to users who staked TUSD or BNB. SUI is the Sui Network's native token. The Layer-1 blockchain was launched by former Meta Platforms employees last month.
Read more: Binance CEO CZ Lawyers Up as US Pressure Intensifies
Following Binance's announcement, a wallet associated with Sun sent 400 million TUSD to Binance in 10 transactions, totaling $115 million.
🚨 🚨 🚨 59,000,000 #TUSD (59,479,670 USD) transferred from Justin Sun to #Binancehttps://t.co/nucyRDnp57— Whale Alert (@whale_alert) May 1, 2023
Crypto Twitter was quick to identify Sun as the transactor, believing the Tron founder had planned to farm SUI on Binance.
Binance founder Changpeng Zhao (CZ) responded to the community, stating that the exchange warned Sun it would "take action" if he used any of the deposited TUSD to farm SUI.
Read more: After All the Drama, Binance Cancels Voyager Deal
"Binance LaunchPool are meant as air drops for our retail users, not just for a few whales," Binance tweeted.
Our team told Justin, if he uses any of these to grab the LaunchPool Sui token, we will "take action against it". SMH.— CZ 🔶 Binance (@cz_binance) May 1, 2023
Binance LaunchPool are meant as air drops for our retail users, not just for a few whales.
On the bright side, blockchains are transparent... https://t.co/8Xs1oXjfVd
Sun then apologized for the move, claiming the transactions were a misstep by Tron DAO Ventures members who "were not fully aware of the intended purpose for these funds and inadvertently used a portion of them to participate in exchange campaigns."
"We sincerely apologize for this oversight," he directed at CZ.
Regrettably, some of our team members were not fully aware of the intended purpose for these funds and inadvertently used a portion of them to participate in exchange campaigns. Upon realizing this error, we immediately contacted the exchange team and arranged for a full refund…
— H.E. Justin Sun 孙宇晨 (@justinsuntron) May 1, 2023
Predictably, the crypto community was cynical of Sun's claims, with many mocking the Tron founder.
"Many people struggle to control wallets these days..." One commenter replied to Sun's tweet.
"caught red handed lol, get this lil shid," said another.
Others took aim at Binance for not establishing limits and preventing whales from exploiting its Launchpool.
Many people struggle to control wallets these days...
— Da Vinci 🧵 (@davincithreads) May 1, 2023
— Crypto Tony (@CryptoTony__) May 1, 2023
caught red handed lol, get this lil shid @inversebrah— Crypto Santa (@Blockchainsanta) May 1, 2023
Whales vs. retail
Although Binance took action against Sun's predatory actions, the exchange has yet to introduce a limit to SUI staking, thereby allowing other whales to execute similar exploits.
Binance claims the service is offered primarily for retail users but as always, whales are sharp to take advantage of opportunities such as these and continue to be better positioned than their retail counterparts.
Looking ahead, as crypto firms look eye institutional clients over their retail base, products and services could be tailored more towards whale money. Binance might have sided with retail this time but there's no guarantee such loyalty will prevail.
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