The founder of a little-known cryptocurrency is making big waves.
First leaked last week, more details emerged Tuesday on how Justin Sun, the founder of a controversial cryptocurrency project called Tron (with a market capitalization of more than $3 billion), is acquiring the file-sharing service BitTorrent for as much as $140 million.
(A subsequent CoinDesk report pins that total at closer to $120 million).
If you just did a double-take, you’re not alone.
A quick recap: Tron, the 10th-largest cryptocurrency in the world according to data published by CoinMarketCap, is in the midst of gearing up for its big software launch.
The project officially kicked off efforts in May to shift from the ethereum token it used for fundraising (in what’s called a ‘token swap‘) to new coins on a wholly independent blockchain, dubbed Odyssey 2.0. But the road to that point has been a tumultuous one, marked by allegations of plagiarism about its white paper.
As such, the acquisition was yet another opportunity for supporters and critics to spar.
Investors, you can guess, were more than ecstatic about the news.
Amidst the social celebration, though, some of the network’s more ardent critics took the opportunity to raise questions about the timing of the news as well as the reasoning behind the acquisition.
Variety and TorrentFreak provide some key background to the sale’s origins.
Sun reportedly began pursuing acquisition of BitTorrent last September under a “no shop” clause that prevented BitTorrent from engaging in similar talks with other potential buyers.
On May 25, word got out that this clause had been violated by BitTorrent and that Sun had filed legal paperwork to sue. Fast forward to today, when news was broken by Variety of a merger between a registered company called Rainberry Acquisition Inc. owned by Sun and Rainberry Inc, the actual company owning BitTorrent.
Beyond the speculation over how negotiations for the acquisition of BitTorrent actually went down behind the scenes, critics have questioned the strategic motivation of even purchasing BitTorrent’s file-sharing services in the first place.
For one, the technology behind the services BitTorrent offers is entirely open-source and available for public view.
As such, some have been suggesting that what Sun is going after with this acquisition is not BitTorrent’s services per say but rather the established platform BitTorrent possesses from which to create entirely new services.
Others feel that the speculation is unnecessary given the sheer reach of BitTorrent around the globe servicing millions of users each day.
Still, without a clearly defined motive, critics of Tron continue to warn away investors and view this acquisition as a poor attempt to “legitimize” what is clearly, to some, a “scam.”
For now, it seems Sun is content with staying tight-lipped about potential next steps for Tron as it relates to BitTorrent. (BitTorrent announced Tuesday that it doesn’t plan to shift its services in light of the deal).
Still, it might be too early to tell just what’s in store.
In an interview on Huobi Talk, transcribed and translated on Medium, he said:
“Regarding how we can unite with BitTorrent, I will keep it secret first. In July, we will have some activities with BitTorrent, please pay attention to that, thank you.”
Photo via Shutterstock.