Circle, the entity behind the outstanding crypto stablecoin USDC, introduced its resolution to discontinue its affiliation with the TRON blockchain yesterday. This cessation of USDC operations on TRON, efficient instantly, will cease the minting of latest USDC tokens on TRON, although transfers and redemptions might be facilitated till February 2025.

The shocking announcement led to rampant hypothesis concerning the motivations behind Circle’s resolution. In an in depth exposé shared on X (previously Twitter), on-chain sleuth TruthLabs (@BoringSleuth) has supplied a deep dive into the underlying causes, citing intensive analysis into TRON’s previous, its founder Justin Solar, and their actions on and off the blockchain.

‘Real’ Cause For The Crypto Breakup Between USDC And Tron

TruthLabs’ report begins with an eye-opening revelation about TRON’s ICO and the distribution of its TRX tokens. “Back in August of 2023, I took a look at Tron’s ICO, the DAO Blockchain founded by Justin Sun. In this thread, I revealed that Justin Sun owned 17 of the top 20 TRX wallets, accounting for over 98% of the entire token Supply,” TruthLabs said, highlighting considerations about centralization and potential manipulation inside the TRON ecosystem.

The report additional delves into the connection between these wallets and a community associated with the Chinese Communist Party (CCP), which is concerned in vital cryptocurrency-related frauds and the laundering of proceeds from unlawful actions. “One of their wallets was a Genesis wallet, receiving 133,7000 $ETH from ETH’s ICO in 2014/15.”

Furthermore, the researcher claims that “over $3 billion in BTC on TRON went missing from a Contract that was last active on 11/11/2022, the day FTX went bust,” highlighting one other suspicious case of potential fraud by Tron founder Justin Solar.

The implications of such findings are huge, with TruthLabs suggesting that the potential for monetary impropriety, such because the creation of unbacked USDT by Solar to be swapped for USDC, might be a contributing issue to Circle’s resolution to distance itself from TRON. “What if Justin Sun, the number one Minter of USDT, decides to print $3M in unbacked USDT, swap them out for backed USDC, and use that to make his unbacked holdings whole again?” posed TruthLabs, highlighting the dangers concerned.

The investigation additionally factors to Solar’s and TRON’s connections to the CCP and entities just like the cryptocurrency trade Huobi, additional exacerbating considerations. “Another good reason to get away from Tron and Justin Sun is their ties to the CCP… Lots of familiar CCP faces, like Longling Capital, Wanxiang, Binance Dev’s, Hashkey, and more,” TruthLabs famous, emphasizing the depth of those associations.

Circle’s strategic transfer to finish its affiliation with TRON is thus portrayed as a crucial step in the direction of making certain its survival and success, particularly in gentle of its public providing ambitions. As Bitcoinist reported, Circle confidentially filed for an IPO in the USA in January.

“Distancing themselves by discontinuing their business on TRON is critical to their survival, and critical if they seek to improve their chances of approval when it is time to go Public,” TruthLabs concluded.

These revelations have the potential to spark a big dialogue inside the crypto group. Nonetheless, neither Circle nor Justin Solar has but commented on these claims. Because the scenario unfolds, the impression of Circle’s resolution on TRON, USDC, and the broader stablecoin market stays a subject of eager curiosity and hypothesis.

At press time, Tron (TRX) traded at $0.1395.