Caixin
Jul 25, 2019 08:58 PM
FINANCE

Buffett Lunch Shines Awkward Spotlight on Justin Sun

Sun Yuchen. Photo: IC Photo
Sun Yuchen. Photo: IC Photo

What started as a marketing opportunity involving billionaire investor Warren Buffett has turned the life of a young Chinese blockchain entrepreneur into a roller-coaster ride.

Like many previous winners of an annual charity auction to have lunch with Buffett, Justin Sun, the 29-year-old founder of the Tron Foundation that launched the Tronix digital token, leveraged every bit of it.

After winning the lunch with a record $4.57 million bid on June 3, he posted frequently about the event on social media, claiming he would introduce crypto-skeptic Buffett to the world of cryptocurrency. He even went as far as to invite U.S. President Donald Trump to the event. Trump did not respond.

However, all of this did little to rouse the performance of Sun’s cryptocurrency Tronix, which saw its price and market cap both drop 30% since Sun made the announcement early in June.

Sun’s fierce marketing campaign has been dogged by controversies surrounding his business and investments. Vitalik Buterin, the high-profile blockchain engineer who developed rival token Ethereum, accused Tron of plagiarism on Twitter in 2018, while Sogou CEO Wang Xiaochuan once called Sun “a swindler.”

As Chinese regulators banned both trading and raising funds for cryptocurrencies in 2017, Sun shifted his operations to Singapore with the establishment of the Tron Foundation. Tronix is currently the world’s 11th-largest cryptocurrency. Sun is also the CEO of peer-to-peer file-sharing platform BitTorrent Inc.

Peiwo, a voice-based social dating app Sun acquired in 2014, was criticized by the official Xinhua News Agency in 2018 for allegedly offering pornographic content. Caixin learned that Peiwo has been removed from mobile app stores. Public business records show the company is applying for cancellation of its registration.

This week could be the most dramatic for Sun since early June. His cryptocurrency foundation Tron said on Tuesday that the lunch would be postponed because Sun was suffering from kidney stones. Then, Caixin reported that Sun, whose exact whereabouts had been unclear, had been barred from leaving the Chinese mainland since June 2018 over allegations including illegal fundraising, money laundering, gambling and spreading pornography. He’s still on the border control list.

On Wednesday, Sun streamed a live video showing he was actually in San Francisco. He denied that he would be blocked from leaving China if he ever returned, specifically saying in social media posts earlier this week that Caixin’s report was untrue. Industry sources told Caixin that Sun has been living outside China this year.

Then on Thursday, Sun apologized for “over-marketing” Buffett’s annual charity event. “Because of the immaturity of my words and actions,” he wrote in a post on Weibo, China’s Twitter-like microblogging platform, the Buffett lunch “gradually evolved into out-of-control over-marketing, resulting in many consequences that I had completely not expected.”

“It can be said that without the care and guidance of the regulatory agencies, there will be no healthy development of the blockchain industry today,” Sun said in the post. He did not specifically comment on the travel ban.

Sun isn’t the only Chinese businessman who has won a chance to dine with Buffett, which over the years has seemingly grown to be a money-making opportunity. Previous Chinese winners included Duan Yongping, founder of consumer electronics-maker Guangdong BBK Electronics Industry Co. Ltd. who bid in 2006; Zhao Danyang, founder of investment firm Pureheart Capital Asia Ltd., in 2008; and Zhu Ye, former chairman of gaming company Dalian Zeus Entertainment Co. Ltd., in 2015.

Still, the event is for a good cause. So far, the charity auctions have raised more than $30 million in total, according to a press release from e-commerce giant eBay Inc., which has hosted the auctions for 17 consecutive years. All the proceeds have gone to support nonprofit organization Glide Foundation’s “social services that help San Francisco’s most vulnerable residents,” the release said.

Han Wei and Tianyu M. Fang contributed to this report.

Contact reporter Timmy Shen (hongmingshen@caixin.com, Twitter: @timmyhmshen)

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