Binance warns crypto mogul Justin Sun against SUI token grab

Binance boss Changpeng Zhao today warned fellow crypto mogul Justin Sun that the exchange operator would take action against him if he tried to farm SUI tokens. But Sun quickly apologized for what he described as inadvertent actions and reversed them.

Earlier today, Sun transferred a total of over 115 million TrueUSD (TUSD) stablecoins on Binance, according to Whale Alert tweets. TUSD is one of two tokens — the other is BNB — that can be staked on Binance Launchpool to farm SUI, the native token of Mysten Labs' Sui Network, Binance announced today. Yield farming is the process of earning tokens by providing liquidity to DeFi protocols.

Binance CEO Changpeng "CZ" Zhao noticed the huge transfers of TUSD, and tweeted that if Sun used any of those tokens to grab the Sui tokens available via Launchpool, Binance would "take action against it."

"Binance Launchpool is meant as airdrops for our retail users, not just for a few whales," Zhao said, adding, "On the bright side, blockchains are transparent."

Justin Sun's response

Sun was quick to clarify that the TUSD transfer was made to provide liquidity. He added, however, that some of these stablecoins were "inadvertently" used to participate in exchange campaigns — which would have yielded SUI token rewards — and that the action will be reversed.

Sun said Tron DAO Ventures, a partner market maker of TUSD, deposited the tokens to Binance for market-making purposes. "Regrettably, some of our team members were not fully aware of the intended purpose for these funds and inadvertently used a portion of them to participate in exchange campaigns," Sun tweeted. "Upon realizing this error, we immediately contacted the exchange team and arranged for a full refund of the funds."

"We sincerely apologize for this oversight," Sun added.

Binance Launchpool was created in September 2020 during the rise of DeFi. The platform allows users to earn newly launched tokens in return for staking BNB and other tokens. Launchpool is different from Binance Launchpad, which is essentially a platform for purchasing new tokens.

'Only miscommunication'

This appears to be the first time that Zhao has publicly made such a threat against Sun. The two executives have enjoyed a close relationship over the years. Sun told The Block that this episode was "only miscommunication."

"I have texted CZ and he understands it," Sun said.