Chain Considers Legal Action Against Justin Sun Over Market Manipulation Allegations

Blockchain protocol Chain has announced it is exploring legal action against Justin Sun, founder of TRON, following accusations of market manipulation. The controversy erupted after Sun alleged that Chain engaged in high-leverage trading practices harmful to exchange users.

Sun’s Accusations and Chain’s Rebuttal

In a Jan. 24 X post, Sun claimed Chain used high-leverage contracts that could negatively impact crypto exchange users. Without presenting evidence, he urged exchanges like Coinbase, Kraken, and Bybit to investigate and warned that he would report the alleged activities to the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ).

Chain quickly dismissed the allegations, stating in an X post, “The Chain team is not actively engaged in ANY trading of XCN, nor involved in ANY market manipulation directly or indirectly.” The company added that XCN token management lies with OnyxDAO, not Chain itself. The firm emphasized its commitment to exploring “legal remedies” against Sun for his statements.

Price Surge and Increased Scrutiny

Sun’s allegations coincided with a significant rally in XCN’s price, which jumped 149% in a single day and nearly 400% over the past week. This dramatic increase has drawn attention to the token and intensified scrutiny of the situation.

Background on Chain

Founded in 2014, Chain has raised over $40 million from investors, including Pantera Capital and Citigroup. It was acquired by Stellar in 2018 before being re-acquired in 2020. The ongoing dispute marks another high-profile clash in the crypto space, with legal and regulatory implications potentially impacting the broader market.