Shuli Ren
Just when Bitcoin seemed to be breaking out of its long winter, a publicity stunt by one of the crypto industry’s most prominent billionaires is raising questions as to whether this asset class should be in mainstream investors’ portfolios.
Justin Sun, the Trump family’s earliest and biggest crypto backer, is suing a Chinese actress and her parents to recover what he describes as a bride price of 30 million yuan ($6.3 million). In a long essay posted on X, titled “My Girlfriend Jing Tian,” he recounts their relationship and portrays Jing as high-maintenance and money-hungry.
This dispute has captivated Chinese society and the crypto world. The original August 27 X post alone has garnered 40 million views. In response, Jing wrote on Chinese social media Weibo, where she has more than 26 million followers, that she would never trade love for money and believes that justice would prevail.
With an estimated net worth of $US8.3 billion, Sun is an expert in creating media buzz, sometimes as a way to boost the value of his business dealings. He is known for spending $US6.2 million at Sotheby’s on a conceptual artwork composed of a fresh banana stuck to a wall — and eating it in front of reporters afterwards.
The crypto billionaire is also litigious, suing World Liberty Financial, a crypto project co-founded by President Donald Trump, for extortion after their business associations turned sour. The company counter-sued for defamation. He also previously sued Bloomberg for reporting on his wealth, but ultimately voluntarily dismissed his case.
But is this publicity stunt smart? Flamboyance doesn’t bode well when the Chinese government embraces common prosperity and is keen to rein in capital flight.
In the well-crafted essay — the 36-year-old won a national writing competition in 2007 that secured him a spot at the prestigious Peking University — Sun spent pages flaunting his wealth. He’s especially fond of his Airbus A330, estimated to be worth $US200 million, boasting that the Maldives airport is too small for the private plane and the islanders at Tenerife off West Africa had never seen anything like it.
The public backlash in China was almost immediate, with prominent influencers calling Sun vengeful and a social outcast (crypto trading is illegal in China). Over the weekend, Binance founder Changpeng Zhao, who was instrumental in Sun’s early success, suggested he tone down the rhetoric.
After all, we don’t need to look far to see how Beijing feels about flashy displays of wealth. In 2022, regulators asked the entire brokerage industry to implement pay cuts after the wife of a junior trader at China International Capital Corp. drew public ire by revealing her husband’s monthly salary on social media. Finance executives’ compensation only started to bottom out last year.
China more recently has been cracking down on capital flight, banning unauthorised offshore issuance of yuan-pegged stablecoins. These cryptocurrencies allow people to move money internationally without sharing identifying information, even bypassing stringent economic sanctions.
It’s not hard to see how Sun may irritate Beijing. The bulk of his wealth stems from Tron, a blockchain system that has morphed into a global payments network that moves much more than PayPal. Nearly 40 per cent of Tether’s USDT, the world’s most-used dollar-pegged stablecoin, is transacted on Tron, which counted Asian crime syndicates among its early adopters, according to the United Nations Office on Drugs and Crime.
Meanwhile, crypto exchange HTX, where Sun is a self-described advisor, hosts plenty of suspicious activities. It has been accused by the UK and the European Union of helping Russia move money. HTX has pushed back, saying Huobi Global SA — the first defendant in a legal claim the UK has made — is distinct from the online exchange, which is committed to full compliance worldwide.
At last week’s Bitcoin Asia conference in Hong Kong, Binance’s Zhao tried to strike a bullish tone, predicting that Bitcoin will soon overtake gold. But there are plenty of sceptics.
Both assets are floated as potential beneficiaries of the so-called debasement trade — whereby investors seek refuge from the dollar for fear that it’s being devalued — but legally they’re miles apart.
Central banks are buying gold to diversify their reserves, while the crypto industry still operates in a tight regulatory environment and as such, it can ill afford negative coverage now.
Unfortunately, Sun’s sordid essay will deepen the public’s crypto scepticism and fatigue.
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