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TRON’s Justin Sun Pays $2.8M for Warhol NFT Amid Ethical Concerns

Cryptocurrency Jul 01, 2021 08:00AM ET
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TRON’s Justin Sun Pays $2.8M for Warhol NFT Amid Ethical Concerns

  • TRON Founder Sun paid $2.8 million U.S. to win an NFT of Warhol’s portraits.
  • APENFT issued a separate press release announcing the launch of its own NFT token that will run on the TRON blockchain.
  • Additionally, Binance supported the June airdrop of APENFT’s token to holders of TRON (TRX), BitTorrent (BTT) and JUST (JST) – all of those coins are owned by TRON.

Ethical questions are surfacing in the wake of a recent, massive NFT purchase involving Justin Sun, the founder of TRON cryptocurrency and blockchain. Sun recently paid $2.8 million U.S. to be the winning bidder of an NFT representing the physical series of three self portraits created by late pop-culture artist Andy Warhol.

Sun’s winning auction bid was the highlight event associated with the launch of Binance NFT Marketplace, which was called the Genesis Auction. In its press release announcing the Genesis Auction, Binance stated that this event would be:

Hosted in collaboration with TRON and APENFT the auction will feature exclusive collectibles and can't-miss content from popular artists and creators, the event is set to be the ultimate, no-compromise NFT experience you've been waiting for.

Furthermore, across the top of the digital poster that APENFT shared via Twitter announcing Sun’s winning bid, all logos for APENFT, Binance NFT, and TRON appear across the top of the image.

What’s interesting, is that a month before the auction took place, APENFT issued a separate press release announcing the launch of its own NFT token that will run on the TRON blockchain. Here’s an excerpt from the APENFT announcement:

The roadmap is broken down into 4 phases: Phase 1: Build the infrastructure for the NFT ecosystem Powered by TRON, one of the world's top three public chains, and BitTorrent, the world's largest distributed digital storage system, APENFT adopts a highly-integrated and heavily-invested infrastructure to drive the implementation of ERC721/TRC721 and its supporting facilities. While there’s nothing illegal with APENFT announcing the launch of its proprietary NFT on the TRON blockchain, or that Binance collaborated in the auction with both TRON and APENFT, the fact that TRON’s founder won a major artifact up for bid on the same auction raises serious questions, namely how could a founding co-sponsor of the event be allowed to bid on any of the auction items?

At the very least, Sun should have personally disclosed the existing relationship between TRON, APENFT and Binance prior to the bid and sought guidance from a lawyer. A strong ethical argument could be made that the relationship between the three organizations created a clear conflict of interest that perhaps should have prevented Sun – or anyone from any of the three organizations – from bidding on any APENFT-Binance-affiliated auction.

Additionally, Binance supported the June airdrop of APENFT’s token to holders of TRON (TRX), BitTorrent (BTT) and JUST (JST) – all of those coins are owned by TRON. While technically not illegal, these relationships needed to be disclosed and thoughtfully considered before a co-founder – whether from TRON, APENFT or Binance – could bid and win a significant collectible from an auction on which they all collaborated.

On the Flipside

  • This initial Genesis auction by Binance, in collaboration with APENFT and TRON raises serious concerns regarding the judgement (or lack of judgement) of the leaders of these organizations.
  • No executives or employees of any of the three organizations should have been able to bid on any Genesis Auction items.
  • It would be interesting to know IF employees were not allowed to bid, but leaders were – it’s unlikely we’ll ever know.
  • Going forward, co-collaborators or sponsors of auctions should not be allowed to bid on items in those auctions. The appearance of unfair access undermines the trust and integrity of the auction process.

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TRON’s Justin Sun Pays $2.8M for Warhol NFT Amid Ethical Concerns
 

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