Unique risks
The biggest issue with TRON is its creator, who also served as its CEO for several years. Justin Sun is, to put it mildly, a controversial figure in the crypto community. In March 2022, The Verge published a lengthy investigative report on Sun based on leaked internal TRON documents and interviews with more than 30 sources, including former employees. The report claims that Sun:
- Pushed to complete TRON's ICO before China banned these offerings, which he learned about in advance from the founder of Binance.
- Employed a "market-making team" that would conduct insider trading of cryptocurrencies, including TRON. Sun would direct this team to buy TRX when TRON was planning to announce good news to the public.
- Instructed employees to "fake the KYC" (know your customer) requirements for the crypto exchange Poloniex because the process was slowing down user adoption.
- Had engineers search for Bitcoin that customers of Poloniex had lost by accidentally sending it to the wrong type of crypto wallet. Approximately 230 Bitcoin ended up being siphoned out of Poloniex.
Sun is no longer TRON’s CEO since he stepped down at the end of 2021 to become Grenada's ambassador to the World Trade Organization. Regardless, the allegations of illegal activity, especially of pumping and dumping cryptocurrencies, have damaged TRON's reputation.
TRON has also been criticized for copying other projects. In January 2018, the CEO of Protocol Labs tweeted that the TRON white paper copied portions of other protocols' white papers. In February 2018, a report claimed that copies of code from other projects were found in TRON's code base.
Is TRON a good investment?
Despite the controversies surrounding it, TRON ranks among the top cryptocurrencies by market cap. It certainly has potential, and there are reasons to consider it as a cryptocurrency investment.
TRON is one of the most widely used blockchains. It has more than 85 million accounts and has processed more than 3 billion transactions. In September 2021, TRON ranked second for total transactions on blockchains, behind only Ethereum.
TRON's focus on the entertainment sector gives it a unique niche among blockchain projects. Its acquisition of BitTorrent could also be key in its development here. And it's generally regarded as having a strong development team, which is always important.
The fact that you can earn passive income by staking TRON is also a plus. Just keep in mind that you'll be earning more TRX tokens, so this is only worthwhile if you like TRON as an investment.
All that being said, TRON is still a very high-risk investment, even compared to other cryptocurrencies. Its reputation isn't the best, and it has quite a few strong competitors. If you decide to buy, only make it a small part of your portfolio. Make sure you're also prepared for volatility since cryptocurrency prices can fluctuate quite a bit.
How to buy TRON
TRON isn't widely available in the United States, where most of the biggest exchanges don't offer it. There are, however, a few places where U.S. investors can buy TRON:
- Kraken
- FTX.US
If you're interested in staking TRON, you may want to go with Kraken or eToro since they both have built-in staking available. FTX.US doesn't, although you could buy TRON on that exchange and then stake it yourself through a crypto wallet.
TRON is a project that appears to have operated right on the fringes of what's legal. For those thinking about investing, it's all a matter of whether the project's potential makes up for the risk involved.
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