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Tron Founder Justin Sun is in the headlines today after his latest on-chain transaction was brought to life. According to insights shared by crypto sleuth Lookonchain, Justin Sun transferred a total of 23,000 ETH worth approximately $43 million to Poloniex. While the purpose of the transfer remains unknown, there has been growing speculation from crypto Twitter.
Justin Sun transferred 23,000 $ETH ($43M) to #Poloniex ~10 mins ago.
— Lookonchain (@lookonchain) July 8, 2023
Justin Sun transferred a total of 67,500 $ETH ($126M) to #Poloniex in 7 transactions over the past year.https://t.co/VTN13dGJ1q pic.twitter.com/fYa4bBI8DS
Potential reasons for funds movement
Justin Sun owns the Poloniex exchange and, as a crypto founder with many top Web3.0 companies in his portfolio, the recent funds movement, which is not uncommon with him, can mean a lot of things. First, Justin Sun may set his eyes on gradual liquidation to take advantage of the recent bouts of price surges that Ethereum has experienced over the past few months.
According to an extensive review of the associated wallet address, it was discovered that Justin Sun is a functional trader in the Decentralized Finance (DeFi) ecosystem, partaking in a series of staking activities from which he earns regular rewards. As a platform that supports staking, part of the reason for moving the funds to Poloniex might be to also stake it there as he has a record of doing this.
Another plausible reason is to cushion liquidity on the Poloniex exchange. With Justin Sun's direct oversight on the trading platform, ensuring there is enough liquidity to fulfill all customers' orders is essential, and this funds movement can be directed to this purpose.
Justifiable fears?
Justin Sun is undeniably a market whale with large holdings of different digital currencies beyond Ethereum. While the recent moves with respect to the Ethereum transfer have sparked fear of a possible sell-off, the fear of a sell-off might be unjustified.
This is because the total sum of the funds might not make a dent in the Ethereum market, which boasts a market capitalization of over $224 billion. Should Justin Sun choose to sell off the quoted ETH tokens, the impact on the market may not be as grievous as is being projected.
Alex Dovbnya
Valeria Blokhina
Vladislav Sopov
