60k BTC and 60k ETH on Justin Sun's Tron Seem Unbacked

blockchain.news:

Crypto analyst ErgoBTC has raised serious questions about the backing of TRC20 BTC tokens on the Tron network in a series of tweets. The analyst suggests that 60,000 of these tokens, currently parked in the JustLend protocol, appear to have never been backed. This implies an unbacked (non-existent) Total Value Locked (TVL) of $1.8 billion, which is roughly 50% of the current TVL in the JustLend protocol.

ErgoBTC's tweets were in response to another tweet by a user named «alto | dollar.eth» who claimed to have found the wallet that backs the 60k ETH on Tron, but its current balance is zero. This raises further questions about the backing of TRC20 tokens on the Tron network.

In a typical centralized peg scheme, the custodian advertises their reserve holdings for transparency and trust, as seen with wBTC. However, information on the custodian for the TRC-20 BTC backing is practically non-existent.

The analyst conducted a thorough investigation into the existence of the total 114k BTC on the BTC blockchain. The findings suggest that if these coins exist, they are not sitting in a dedicated address. Furthermore, a deeper dive into the 60k «mint» done on August 21, 2022, revealed no signs of this activity on the BTC blockchain.

The investigation extended to major exchanges such as Poloniex, Huobi, and Binance, but none showed signs of the 60k BTC transactions. The TronDAO, which is not explicitly used for backing TRC20 BTC, also showed no signs of related non-exchange addresses.

The analyst concludes that these findings are signs that the TRC20 BTC on Tron was at best temporarily and partially unbacked, and at worst, still partially backed (-60k of the reported 114k BTC). The biggest impact seems to be a completely