Welcome to Dark Markets, a newsletter about technology fraud. I’m David Z. Morris, a veteran fraud investigator and Phd historian of technology.
This week we dive back into the archives to look at Tron’s 2018 acquisition of BitTorrent, which one former BitTorrent leader characterized as fundamentally fraudulent - which is also his assessment of Justin Sun as a human being.
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Last week ended with some incredible clown-on-clown violence as Donald Trumps’s World Liberty Financial blacklisted addresses owned by Justin Sun, freezing billions of $WLFI tokens that Sun famously bought as a back-door method to curry favor with Trump. The freeze was apparently a punitive action after Sun appeared to be moving unlocked $WLFI tokens to exchanges to sell.
Thanks to the wonders of blockchain transparency, you can see the blacklist action here. According to Reuters, Sun has pumped a total of $75m into WLFI, and it appears that in dollar terms the frozen funds have appreciated to to around $122m. Say bye-bye to that, Justin.
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This is particularly funny because Justin Sun has been one of the most guilty parties in the degradation of crypto and blockchain’s standards and goals over the years. Most of all, he could not give a single fuck about decentralization and uncensorability, features which, if they were part of World Liberty Financial’s design, would have prevented the project from freezing $122 million of Sun’s property. In fact, that’s kind of the whole point of crypto, so watching Sun get owned like this is extremely satisfying.
It won’t matter in the long term, though, because Sun is exactly the kind of completely shameless liar and con-artist who thrives in our era of Trumpian delusion. That $122m barely matters to him, I’m sure - he’ll just steal it somewhere else.
Tron, after all, was built on theft and lies from the beginning.
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Feb 2
The most important thing to know about Tron is that it began life as a copy-paste of the open-source Ethereum code base. That would have been less of an issue if Sun hadn’t claimed dozens of times that his copy of Ethereum was somehow, magically, faster than Ethereum itself.
This was, of course, a lie. Sun has continued lying in the years since - much like Sam Bankman-Fried, it’s hard to tell whether he’s actually aware of his own lies. This is mirrored in the broader Tron organization, which the insider at the center of today’s story described as “basically a marketing machine layered on a very thin veneer of technology.”
Simon Morris was briefly close to the Tron inner circle after the acquisition of BitTorrent in 2018. I found him through something akin to old-fashioned shoe-leather reporting: When the Bittorrent acquisition was announced, I spammed every LinkedIn account I could find with some connection to Tron or BitTorrent.
I was very excited to hear back from Morris, who had been Chief Strategy Officer at BitTorrent. He was extremely frank in his assessments of the BitTorrent acquisition, of Tron’s technology, and of Justin Sun personally, who he spent hours talking to after the buyout.
Morris ultimately left, because his conversations made clear to him that Justin Sun is a habitual liar. This fundamental fraudulence, so manifestly obvious for nearly a decade. makes it all the more galling that CoinDesk has been destroyed to gratify Sun’s ego.
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December 20, 2024
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Unfortunately, BreakerMag was undone by the crypto winter of circa 2019 (which worked out fine for me, frankly - I moved into a staff reporter role at Fortune). So this and much of my work from that era is now effectively gone from the internet. This is in part an effort at preservation.
I’ve also included Tron’s typically grifty response to the story’s publication, so be sure to read all the way to the end for that.
Originally Published: January 2019, Breakermag.com
Simon Morris had spent nearly a decade as an executive at BitTorrent when the decentralized file-sharing client was acquired by blockchain company TRON last summer (2018). Most recently (following a short departure linked to a shakeup that is a story of its own), Morris was BitTorrent’s Chief Strategy Officer, tasked with exploring the potential of blockchain and cryptocurrency.
“Initially it was just, hey, there’s a crazy bubble going on, let’s join in,” Morris admits. But he and his team, which he says was composed of some of the best engineering talent that had passed through BitTorrent over the years, discovered that there could be serious utility to ‘tokenizing’ their software. Automated auctions to prioritize download queues, Morris says, could make downloads across the entire BitTorrent network as much as 40% faster.
Now, Tron says they’ll implement something like what Morris conceptualized, including by creating a BitTorrent Token [BTT] on the Tron network. There’s only one problem: According to Morris, there’s “no way” the TRON blockchain can handle the transaction volume needed to tokenize BitTorrent. And Morris thinks there’s little reason to believe Tron’s claims about BitTorrent, or anything else.
“It seems they’re going in the same direction [as our plan],” Morris told BREAKER. “But what’s very clear is that they’re going to say they’re going in the same direction, come what may, because that’s what Tron does . . . it’s basically a marketing machine layered on a very thin veneer of technology.”
Morris would know. As BitTorrent CSO during the acquisition process, Morris says he visited Tron operations in China and spent “a decent amount of time” with Justin Sun.
“They’ll probably stick it on a server,” he says, “Then give it to the marketing department, who will probably tell you: oh, decentralized, blah-blah. Tron! And people will believe it because they say it, and they’ll look you in the eye and they’ll lie. And that’s not that unusual, but Tron is a particularly egregious example of it.”
Of Sun, Morris says: “It’s very clear that Justin is very strong at marketing. He has a very nice personality from a marketing point of view. He doesn’t have a technical bone in his body. He wouldn’t understand, technically, anything. But the approach that bothered me was, the very sort of Trumpian approach—if you get caught in a lie, the answer is you double down on the lie. [It was] the endless doubling down on lies that made me think it wasn’t going to be a fit.”
Morris left BitTorrent in July of 2018, as the TRON acquisition became official, after concluding that “the path to building any sort of relationship of trust with the people in charge there looked completely impossible.”
TRON did not respond to a request for comment on Morris’s various accusations. But they reinforce some very public embarrassments suffered by Sun and TRON, including evidence that the network’s initial whitepaper was partly plagiarized. TRON has also been caught using code without proper attribution.
“I had very candid conversations with [Sun] about [the] plagiarized whitepapers. I said, Justin, maybe what you should do is acknowledge the fact that you were young and you were scrappy, and maybe this happened, but now you’ve moved on and you’re sincerely building things. [I told him] this was probably a preferable way to communicate in Silicon Valley than to pretend it didn’t happen.
“His reaction was rather animated. He was rather upset that I pushed him on it. But his reaction was to say, ‘We have come to consensus, that this did not happen. And we have moved on.’ Which is obviously hard [to maintain], because there’s actual proof [of the plagiarism] out there.”
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Sun, the TRON organization, and TRON fans have been exuberant since BitTorrent Token was announced last week. Sun has described BTT as “the token that will enable #blockchain mass adoption”. The hype around BTT had driven the price of TRON [TRX] tokens up by nearly 50% in a week, before the price started retreating early Thursday. TRON holders will receive a share of BTT through an ‘airdrop,’ so the TRX price rally implies that the market believes in Sun’s plans for BTT. On Twitter, Sun has continued his longstanding habit of commenting frequently on TRX’s price—at least when it’s rising.
But according to Morris, it’s unlikely Tron can actually execute transactions at the rate needed to make a tokenized BitTorrent work.
“It was very clear when I was [at BitTorrent] that there was no way the transaction capacity of Tron would [work],” says Morris, sounding more bemused than angry. “The transactional capacity we [were] looking at was needing hundreds of transactions a second just to get started. It’s simply not there – You hear all the bullshit out there, oh, this does 10,000 transactions a second. It’s all crap.”
“I mean, we were going to melt Tron. Literally destroy it.”
Why, then, does Morris think Tron is ignoring this obvious barrier to their plans? Again, he suspects a blurry line between marketing and outright deception.
“When they say [they’re] doing it on Tron, I suspect it’s a lie. I suspect that what they’re really going to do is they’ll do it on some central server, they’ll wave their hands and say, ‘Oh, it’s a Lightning Network for Tron,’ or something, and pretend it’s Tron-based, but it’s not really Tron-based.”
Morris, who has continued to work on blockhain projects after leaving BitTorrent, also threw cold water on Tron’s broader technical claims.
“All the nonsense about, oh, it’s the best blockchain ever, it’s so much better than Ethereum. It’s not: it’s a fork of Ethereum J. They didn’t even bother to apply the security updates subsequently.”
The implausibility of Tron’s plans for BitTorrent Token are particularly disappointing, because the plan for tokenizing BitTorrent that Morris describes is fiendishly clever. BitTorrent works by breaking up big files into pieces as they’re downloaded by a ‘swarm’ of machines, which in turn then pass the file on to others. BitTorrent’s efficiency is determined, in large part, by which members of a downloading ‘swarm’ get files first: if users with the fastest internet connections get their downloads first, they can then ‘seed’ them for other downloaders, in turn letting everyone download faster.
But determining who really has the fastest connection, and thus should be first in line for a download, isn’t easy. BitTorrent currently uses a kind of internal barter system to try to spot the best connections. But according to Morris, a tokenized system would be much better. The mechanism would reward fast seeders with tokens, while those leeching files would automatically bid for a place in ‘line,’ based on a fixed and uniform proportion of the total amount of the BitTorrent token held in the client. Over time, says Morris, wallet balances would become good indicators of the quality of a participant’s connection.
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Of course, that mechanism means that someone with a poor connection could buy BitTorrent token rather than earning it, and effectively jump the line by masquerading as a peer with a fast connection. But, says Morris, this would amount to a revenue stream for BitTorrent, while inflicting a relatively minor penalty on the efficiency of the overall system.
Morris says BitTorrent was well aware that most users aren’t likely to pay for their downloads. But users could opt out of the token system entirely, and still benefit from the increased efficiency—a point that TRON has continued to make as it explains its plans.
All of this is still plausible under TRON’s direction. It’s just not likely, according to Morris, that it will actually run on the TRON blockchain.
“They’ll probably stick it on a server,” he says, “Then give it to the marketing department, who will probably tell you: oh, decentralized, blah-blah. Tron! And people will believe it because they say it, and they’ll look you in the eye and they’ll lie. And that’s not that unusual, but Tron is a particularly egregious example of it.”
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Aug 31
Tron and its communication team acted the way all shitty liars do when they’re subject to criticism: they ignored my initial requests to talk about Morris’ claims, then acted offended when I published without their input.
(Entertaining side note: The PR representative is now a therapist in Tel Aviv who markets himself as “The Feelings Mechanic,” which is perfect in just so so many ways.)
Here are the hilarious emails in full.
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Hi there, David.
Pleasure to e-meet you. My name is Orian and I'm a VP here at MarketAcross. Tel-Aviv based PR agency representing TRON.
I wanted to offer TRON's comment to your article. I would very much appreciate if it were to be featured:
"Morris appears to have little insight into BitTorrent operational plans since his departure," a TRON spokesman said. "Actions and execution will prove louder than the words of a disgruntled former employee."
I would appreciate if you could also reach out, in future TRON related stories, so I could provide you the TRON side of things.
Thank you for your time,
Orian
Orian Tal VP Operations, MarketAcross P: +972509245200 | E: orian@marketacross.com
W:
https://marketacross.com
Orian,
Thanks for this. We will update our story. In future, please reach me at dmorris@breakermag.com - this is my personal email, so responses here will be slower.
More than 24 hours before our story ran, we reached out to Tron's public email press contact (press@tron.network) with details of Morris's comments and an invitation to respond before we published. I'll forward you that email. If the press email on the main Tron page isn't monitored or working, I'd recommend changing it.
We also, as noted in the story, reached out to several Tron execs via LinkedIn before we spoke to Morris, and would genuinely have loved to feature input from all sides. I would suggest they get in the habit of monitoring their comms in the wake of major product announcements.
-David
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