Protos took a close look at Poloniex’s last 100 listings and found that almost every single one of those tokens were memecoins.

We analyzed the latest 100 listings, from August 23 to October 29. Of these 100 tokens, 94 were memecoins; the remainder were tokenized assets, restaking, AI, and utility tokens.

Poloniex publicly claims that its “primary objective is to provide users worldwide with access to the finest crypto assets available.”

Well, the “finest” seemingly include such prominent examples as: slop, Fartcoin, Goatseus Maximus, PUSS, and Harambe.

Read more: Justin Sun reveals Poloniex issues prevent proof of reserves

There are also quite a few tokens that seem to represent intellectual property and likenesses that the teams do not actually control. Examples of this type of token include: Elmo, Wukong (the description for the coin makes clear its a reference to Black Myth: Wukong), Caprisun, and Changpeng Zhao. 

The descriptions for many of these tokens often just say ‘meme token,’ but when more details are provided, they often seem suspect. Elmo claims explicitly that it “is the legendary character from the classic TV Show ‘Elmo’s World’” and even goes further to say that “Elmo left behind his old world and arrived in TRON. He has become the red mascot of the red chain, TRON.”

As far as Protos has been able to confirm, there’s no agreement between TRON and the holders of the Elmo intellectual property, something Poloniex’s owner, TRON founder Justin Sun, should understand.

Poloniex has a long history of listing assets that other exchanges have avoided, and the current memecoin frenzy seems to have provided a way to further lower its standards.

Protos reached out to Poloniex’s listing team to glean any information about its listing process, but so far have not received a response.

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Staked USDT (stUSDT), a protocol that supposedly invests in US Treasury securities to pay yields to users who ‘stake’ their tether tokens, has seen its utilization on Ethereum collapse as Justin Sun-owned Poloniex has exited its position, according to onchain data. 

Staked USDT is a token that has historically been used by entities and wallets closely connected to Sun, representing a majority of all tethers in reserves at HTX, a cryptocurrency exchange he advises.

Additionally, on Ethereum, huge portions of this token were controlled by 0x176F3DAb24a159341c0509bB36B833E7fdd0a132, an address that was previously tagged as “Justin Sun 4” on Etherscan but is now tagged as “Poloniex 9.”

Read more: WBTC supply contracts this month following Justin Sun custody drama

Poloniex’s abject refusal to complete a proof-of-reserves, despite Sun’s repeated promises and insistence on its importance, makes it more challenging to determine if this address is more under the control of Poloniex or Sun, insofar as there is a difference.

At times, this address controlled as much as 96% of the total supply of stUSDT on Ethereum. 

However, approximately three months ago, the exchange appeared to have requested a withdrawal of approximately $30 million worth of the token. This was followed two days ago by the withdrawal of approximately $11 million worth, and another $9.4 million today. 

These withdrawals have left the token nearly abandoned on Ethereum, with the largest remaining holder, 0x9FCc67D7DB763787BB1c7f3bC7f34d3C548c19Fe, having only $1.7 million worth of this token — approximately 90% of the total supply. 

The largest token holder on Tron, TDToUxX8sH4z6moQpK3ZLAN24eupu2ivA4, an HTX address, still holds a much larger $195 million, representing approximately 85% of the supply on Tron.

Protos has reached out to Poloniex to confirm it controls this address, but at press time had received no response.

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Justin Sun has taken to X (formerly Twitter) to explain that “all exchanges in the industry have already implemented proof of reserves (PoR).” He followed up this pronouncement by further emphasizing that “there is only one explanation for why” exchanges have yet to do it — “they are unable to meet the requirements.”

This reveal was somewhat surprising as Poloniex, a cryptocurrency exchange owned by Sun, has not implemented PoR, and as such we are forced to conclude that Poloniex is also “unable to meet the requirements.”

Poloniex has a page on its website that claims to be a “Proof of Reserves,” but this page only shows how much Tron is on Poloniex, neglecting every single other asset. 

These issues become especially interesting in light of the fact that Sun has recently focused so many of his criticisms on the newly launched cbBTC, Coinbase’s wrapped-Bitcoin product. He has repeatedly emphasized that the lack of disclosure surrounding where the bitcoins are stored represents a fundamental problem with cbBTC. 

However, again, Poloniex is a problem. Poloniex offers a popular Bitcoin on Tron product that is far larger than cbBTC. This product has a market cap of approximately $6.7 billion, far larger than the $110 million that cbBTC represents. Poloniex also refuses to disclose where the bitcoins for this product are held.

Even more troubling, the Poloniex product represents more than half of all bitcoin at Sun-advised HTX, making Sun’s insistence on these cbBTC issues even more inexplicable.

Read more: Launch of cbBTC, WBTC competitor, sparks Justin Sun hypocrisy

Poloniex has previously committed to providing a PoR audit, but no audit has been provided for Poloniex, and Sun now insists that “auditors can’t guarantee that the funds are still on-chain.”

Protos has reached out to Poloniex about these issues, but at press we have not heard back. 

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Following Protos reporting about Wrapped Bitcoin on Tron (WBTC) depegging on Poloniex, the Justin Sun-owned firm behind the product appears to have removed this asset from trading. 

The previously available WBTC/BTC pair looks to have been removed entirely, and the WBTC/USDT pair currently states, “Currently trading for WBTC/USDT is disabled. The price may not reflect current market.”

It’s not clear if it’s currently possible to redeem WBTC for BTC through Poloniex.

Additionally, Poloniex has yet to complete the promised proof-of-reserves process and still hasn’t disclosed where it stores the bitcoin supposedly reserving this product.

Read more: Poloniex WBTC depegs threatening Justin Sun’s empire

WBTC, managed by Justin Sun-owned Poloniex, currently makes up over half the bitcoin on Sun-connected exchange HTX. Additionally, there’s approximately $5.36 billion worth of the product on Sun-launched JustLend.

This opaque financial instrument connects a number of Sun-affiliated entities and projects in a way that raises concerns about the management of both the instrument and the entities.

Protos has reached out to Poloniex to determine where the reserves for this product are held, if it is still possible to redeem, and why this asset was delisted for trading. At press, Poloniex had not responded.

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For the fifth time in its brief existence, Justin Sun’s decentralized stablecoin USDD has depegged. The coin, which is supposed to stay priced at a dollar via a series of algorithmic mechanisms, has deviated 3% from its $1 peg, currently trading for $0.97.

The depegging comes on the back of news that another Justin Sun-based entity, Poloniex, is struggling to maintain a peg for its wrapped bitcoin (WBTC) product. Sun’s other stablecoin, TUSD, has also seen its peg break, though only slightly compared to the issues that the WBTC on Poloniex or USDD are having.

It’s worth noting that all of Justin Sun’s projects have been struggling as of late. HTX, the Sun-advised crypto exchange, hasn’t only seen customers complain of being ripped off but has been involved in lies from Justin Sun about his personal bitcoin stash. The HTX token, which was rebalanced and altered without customer approval, has seen its value fall almost 25% in only a few months.

Read more: Justin Sun directed wash trading scheme from his US apartment, SEC claims

More problems for crypto whiz kid Justin Sun

The enigmatic crypto billionaire has been at the center of numerous controversies over the years, from claims that he’s guilty of market manipulation and wash trading to less concerning problems like his inability to take advantage of his $28 million trip to space (because he can’t or doesn’t want to come back to the United States).

Sun, who once was the ambassador to the WTO for Grenada and has numerous citizenships (including to St. Kitts and Nevis, Malta, and the People’s Republic of China), has seen his fortunes suffer a bit of a reverse since last year when he started to get involved with Huobi (now HTX).

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Poloniex, a Justin Sun-owned exchange, offers a wrapped bitcoin (WBTC) product on Tron that is currently trading at a more than 20% discount on Poloniex. 

The WBTC pair traded against BTC on Tron has WBTC worth only 79% of BTC, currently on 0 volume over the last 24 hours.

Poloniex has previously refused to disclose to Protos where it holds the bitcoin for this WBTC product and has yet to complete a promised ‘proof-of-reserves.’ Protos has again reached out to Poloniex to attempt to determine where the reserves for this product are held, what the timeline is for the exchange to finish its promised proof-of-reserves, and for clarification on the relationship between Sun-owned Poloniex and Sun-advised HTX.

Read more: Where is Justin Sun’s money?

The last part is important because the WBTC on Tron product offered by Poloniex is a massive portion of the bitcoin held at HTX, formerly Huobi. 

The most recent proof-of-reserves provided by HTX reveals that over half of all bitcoin on HTX is this WBTC on Tron product, representing over 14,400 bitcoins worth almost $900 million.

There are other connections between Poloniex and HTX, including the fact that the Poloniex support website hosts a page for the ‘Huobi Platform User Agreement.’

HTX and Poloniex are not the only Sun-connected entities exposed to this WBTC on Tron product, with JustLend having nearly 92k bitcoins worth approximately $5.6 billion.

To summarize: JustLend, Poloniex, and HTX are all exposed to this WBTC on Tron product that currently is trading at a massive discount and whose issuer refuses to disclose where the reserves for the product are held.

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Justin Sun recently took to X (formerly Twitter) to brag about how much of his personal wealth he stores on his cryptocurrency exchange, HTX. The image he provided seems to claim that he currently has 28,613 bitcoin on the platform, worth about $1.7 billion.

However, the HTX ‘proof of reserves’ dated February 1 appears to show that HTX had a total of 21,651 bitcoin, approximately three-quarters of the amount that Sun claims to hold on the exchange.

HTX provides a tool that can be used to verify the results of the proof of reserves process. The ‘snapshot’ included lists the addresses considered for this analysis. The addresses that exist on Bitcoin that are disclosed in this snapshot are:

• 143gLvWYUojXaWZRrxquRKpVNTkhmr415B, which has a balance of approximately 1,094 bitcoin.
• 12qTdZHx6f77aQ74CPCZGSY47VaRwYjVD8, which has a balance of approximately 8,970 bitcoin.
• 1HckjUpRGcrrRAtFaaCAUaGjsPx9oYmLaZ, which has a balance of approximately 15 bitcoin.
• 1LXzGrDQqKqVBqxfGDUyhC6rTRBN5s8Sbj, which has a balance of approximately 830 bitcoin.

These addresses in total hold only approximately 10,909 bitcoins — around 38% of the amount of bitcoin that Sun claims to hold on the exchange.

The remainder of the bitcoin held at HTX is a wrapped Bitcoin product on Tron offered by Sun-owned Poloniex. Unfortunately, Poloniex refuses to disclose where it holds the collateral for these wrapped coins.

Read more: Is USDC preparing for a Justin Sun sanction?

Taken at his word, Sun is claiming that he is by far the largest trader still willing to use HTX. However, claiming he controls more currency than the entire exchange disclosed at its last proof of reserves raises additional concerns about the quantity and encumbrance of assets at HTX.

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The UK’s finance watchdog, the Financial Conduct Authority (FCA), has publicly warned users that Justin Sun’s crypto exchange Poloniex is operating unauthorized.

As such, financial laws don’t protect traders using the platform, the FCA warned on Wednesday. The financial watchdog already added Justin Sun’s HTX and KuCoin to its warning list in October, along with 138 other crypto firms.

“[Poloniex] may be promoting financial services or products without our permission,” the FCA alert said. “You should avoid dealing with this firm.”

Seychelles-based Poloniex was one of three entities owned by Sun to recently fall victim to a suspicious hack — ever since Sun’s friend, former Binance chief Changpeng Zhao (CZ), pled guilty to criminal charges. The unknown hacker stole $114 million from Poloniex, $30 million from HTX, and $87 million from the HECO bridge.

Read more: HTX hacked week after Poloniex — now Justin Sun only posts as AI

Since CZ’s settlement with the Department of Justice, Sun has been acting odd on social media. The crypto entrepreneur has exclusively posted AI-enhanced videos of himself that are clearly pre-recorded — prompting some users to suspect Sun was really behind the hacks on his own exchanges as part of his final exit.

Along with Poloniex and HTX, the FCA has also recently warned against Bitfinex, Tether’s sister company.

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The post Justin Sun’s Poloniex added to UK regulator warning list appeared first on Protos.

Former Binance chief Changpeng Zhao (CZ) and Tron founder Justin Sun have long maintained a well-documented bromance, lending frequent support to one another’s careers (and tokens). But with CZ currently in Seattle pleading guilty to various crimes and Binance agreeing to pay one of the largest fines in the history of finance, Sun’s behavior this week is curious at best.

Rumors are circulating that he might be in the process of his final exit while many wallets associated with him are involved in suspicious hacks. Indeed, blockchain observers are asking questions about mysterious, ongoing withdrawals of tens of millions of dollars worth of digital assets from Sun-championed services.

On November 10, someone stole approximately $114 million from Poloniex, which Sun recently purchased. A day earlier, Binance moved 3.9 billion USDT on Tron from its cold to hot wallets. Sun promised a $10 million bounty to the Poloniex hacker if they returned the funds by Friday, November 25. So far, no luck.

Not only that, today the operator of the Sun-championed HECO bridge withdrew over $86 million. Some people believe Sun directed those transfers and regardless of whether or not the act is nefarious, many are speculating that he’s directing assets to be liquidated into ETH and/or USDC.

In addition, for some reason, Tether has minted 1 billion USDT on Tron the day after his frequent ally CZ pleaded guilty to a litany of US crimes. Incidentally, an extra billion dollars will support liquidity on Sun’s blockchain.

Protos has been unable to verify that Sun is responsible for any of these hacks but on X (formerly Twitter), speculation is rampant.

Alongside this suspicious activity, and despite being in the midst of the collapse of the world’s largest crypto exchange, Sun is posting tone-deaf pre-recorded, AI-modified, YouTube videos.

Read more: Justin Sun in no hurry to tell China about HTX hack

Probably not the best use of his time, given that he’s currently defending himself in a major Securities and Exchange Commission (SEC) lawsuit. Commissioners allege that he and his companies Tron Foundation, BitTorrent Foundation, and Rainberry sold TRX and BTT tokens in illegal, unregistered securities offerings.

The SEC also alleges that Sun directed extensive wash trading of both tokens to make them appear more legitimate and desirable.

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The post HTX hacked week after Poloniex — now Justin Sun only posts as AI appeared first on Protos.

A tragic turn of events for the Justin Sun-owned cryptocurrency exchange Poloniex transpired on Thursday, as the platform was hacked for over $100 million worth of cryptocurrencies. The hacker was able to make away with tens of millions worth of mainstream, highly liquid cryptocurrencies like USDT, bitcoin, ether, and USDC — but they also weren’t particularly picky in their choices, snagging dozens of low liquidity trash tokens as well.

The hacker appears to have made off with nearly $40 million worth of stablecoins and nearly $30 million worth of bitcoin and ether. Whoever took the funds had about an hour to drain Poloniex wallets and made sure to take everything they could.

Ultimately, many low liquidity coins were also taken. Some were even unable to be sold off because there was literally no one to sell to.

Read more: Poloniex proof-of-reserves and WBTC backing missing

In what can only be described as a stroke of luck, Vulcan Forged (the company that won The Next Crypto Gem reality TV show) and Measurable Data Token both had tons of coins involved in the hack – but the hacker couldn’t sell them.

Other low liquidity coins, like WIN, BTT, and SUN have seen prices take dramatic hits since the hack because the hacker was able to sell them off.

Poloniex offers bounty following hack

In a short tweet thread, Poloniex acknowledged that it had been hacked and ensured that users would be reimbursed for any losses. A 5% white hat bounty was offered if the hacker chooses to give the almost $120 million worth of assets back. If the hacker takes Poloniex and Sun up on the bounty, they’re looking at a roughly $6 million payday.

Only a couple of months ago, Justin Sun’s other exchange, formerly known as Huobi and now called HTX, was also hacked for 5,000 ETH — far less than the ongoing Poloniex hack, but still a significant amount of user funds.

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The post Poloniex hacked — all my low liquidity coins gone appeared first on Protos.