TRON news reports that one of the most popular crypto-projects is preparing for an IPO, and the headline-driven rush pushed many investors to buy TRX. Unfortunately, fresh TRON news may mislead the market, and hopes for an explosive price rally could prove unrealistic. Some observers already brand the situation a TRON scandal. Below we explain what is wrong with the upcoming listing and why the company’s moves could trigger a TRX crash.
IPO TRON: What’s Wrong with It
Before rushing to buy TRX, investors should consider several problems linked to the widely discussed TRON reverse IPO.
- Centralized control.
The project plans to go public by absorbing the listed company RM Entertainment, after which the vehicle will be renamed TRON Inc. Control will rest with founder Justin Sun’s father, Weike Sun, whom analysts rank among key TRON insiders.
Problem: a strictly centralized structure prevents outside investors from influencing decisions that could move TRX, the native token.
- Charter capital in TRX.
The future TRON Inc. intends to keep all corporate funds in its own coin, a setup that clashes with Wall Street’s vision of proper charter capital.
Problem: the token’s health will hinge on management actions; a single large sale could sink the price and make the asset TRON risky for investors. Other dangers remain: the firm could fail, and crypto’s notorious volatility means TRX can dive without warning, dragging the company’s valuation down with it.
- Project entanglement.
Chinese entrepreneur Justin Sun maintains close ties with the U.S. political elite—links often dubbed TRON political ties. He has invested millions in crypto ventures linked to the Trump family and attends the president’s blockchain events, while Eric Trump publicly calls himself a big fan of the project.
Problem: American regulators are trying to hold Trump accountable for his crypto dealings, dissatisfied with the pump-and-dump cycles he allegedly orchestrates and with the president’s overly liberal stance on digital assets. If that effort succeeds, Sun will likely be pulled into the same TRON investigation.
The prospect of an SEC investigation TRON therefore cannot be ruled out. Lengthy court battles could batter TRX, and critics still ask, is TRON a scam? Sun has already faced U.S. regulators in the past, so the story may repeat itself.
TRX chart. Source: TradingView
Bottom Line
After news of the IPO preparations, bullish forecasts flooded the market, predicting new highs for the token. In reality, turning the project into a public company may curb its appeal because of tighter centralization of control and a charter capital made entirely of the native coin. Weigh these threats carefully when planning your investments.
The easiest way to track TRX is on Quickex, and if you decide to exit the position, the same service offers a favorable TRON/USDT exchange rate.