Blockchain company Chain announced plans to take legal action against TRON founder Justin Sun over defamation following his allegations of market manipulation involving the XCN token. The announcement, made on January 24, was in response to the TRON founder’s claims on X.
https://twitter.com/justinsuntron/status/1882741054618628385?t=2VhwOSOUI52cQ-4oxZEfGw&s=19
Sun accused Chain of engaging in harmful high-leverage trading practices that allegedly destabilized XCN’s price. He also pledged to report these activities to the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). “We will report their illegal activities to the SEC and DOJ for further investigations,” Sun stated in his post.
Chain Denies Allegations and Clarifies XCN Governance
In response, Chain strongly denied the accusations, asserting that it is neither involved in trading XCN nor engaged in market manipulation.
“The Chain team is not actively engaged in ANY trading of XCN, nor involved in ANY market manipulation directly or indirectly. We take these allegations extremely seriously and are exploring legal remedies against Justin Sun,” Chain posted on X.
The company also clarified that the XCN token is managed by OnyxDAO, a decentralized autonomous organization (DAO), and not by Chain itself. This distinction underscores the decentralized governance structure of the XCN ecosystem.
Background
XCN, the governance token for OnyxDAO, recently saw a sharp price increase, surging by nearly 150% in market value last week. As of January 24, XCN is trading at $0.0023, according to CoinGecko.
Justin Sun attributed the spike to market manipulations by Chain, before the denial by the blockchain firm. The tensions between Sun’s allegations and Chain’s rebuttal highlight the complexities of accountability in blockchain projects.
As legal proceedings unfold, the outcome is likely to influence broader discussions on token transparency and regulatory compliance, offering key lessons for stakeholders navigating the evolving crypto landscape.
