Sounds extreme and conspiratorial, right? However, an onchain analyst called Truth Labs (@boringsleuth) claims to have the evidence to prove it. Truth Labs hasn’t published all his data yet, but running some of the addresses that I could source from his work, I could confirm that his workings are correct (from what I had available).
Truth Labs is mainly arguing that a large Chinese auto-parts conglomerate called Wanxiang Group is involved in the funding and setting up of many major crypto industry players, namely the Ethereum Foundation, Binance, Kraken, crypto.com, Coinbase, and Huobi. Vitalik Buterin had even worked for Wanxiang and Wanxiang Group US’s partner, Prometheum was the first exchange to have been given a broker-dealer license by the SEC in what other industry participants are describing as preferential treatment. Prometheum, which is alleged to be a shell of Wanxiang, was also the owner of the crypto addresses killtrump.eth and killtrump.crypto, while Hunter Biden (President Biden’s son) is also alleged to have acted as a broker for Wanxiang in the US.
There’s a lot to this story and for an introduction, you can read this Protos’ feature about it here. Since this feature was written, there have been some interesting developments, such as a former attorney for the Ethereum Foundation, Steven Neyaroff, starting to vouch for Truth Labs. It is important to note that XRP investors have a direct interest in this story given that they have always claimed that the SEC has provided preferential treatment to the Ethereum Foundation by suing Ripple for breaches of security laws while giving a pass to the Ethereum Foundation.
What’s also raising suspicion about the alleged favoritism to Prometheum is that Wanxiang signed a blockchain cooperation agreement with MIT in 2018, and MIT is also the place where Gary Gensler, now SEC chairman, gave a class on blockchain and money. Sure, this is circumstantial, and Gensler has shrugged off US lawmakers’ concerns by simply saying that any licensed dealer in the US would have to abide by the rule. Congressman Ralph Norman rebutted by telling Gensler “Does China play by the rules?” Wanxiang Group which has a large real-estate portfolio in the US and also exports car parts may not be complying with US sanctions if it is also the biggest mineral trader in North Korea. Allegedly, Wanxiang has close ties to the Chinese government because it could keep its one of mines in North Korea thanks to support from the government and one of Wanxiang’s companies was also involved in the early development of blockchain and digital currency technology at the People’s Bank of China.
The Communist Party of China makes no secret of its strong friendship with Wanxiang Group. Its founder, Lu Guanqiu, was a respected member of the CCP and so is his son, Lu Weiding who now runs the group. If Truth Labs’ allegations that Wanxiang and its associates and affiliates pre-mined most of Ethereum’s ICO, and still own the majority of the ETH, the Ethereum network is basically a network of Chinese money.
The allegations that a Chinese conglomerate close to the CCP has this overreach in the crypto industry are very serious, but Buterin has never denied them, and neither has the Ethereum Foundation. On the other hand, Changpeng Zhao of Binance has always strongly denied any connection with the CCP citing such allegations as baseless and racist. Binance which is owned by Changpeng Zhao has always had from its origins a mysterious Chinese director who has helped CZ build his empire from the shadows.
I will closely follow Truth Labs’ research and how the press covers this story. Eventually, I would suppose that Truth Labs’ work will be independently verified by a consortium of journalists. As the sleuth himself proclaims, his research is extensive, akin to the depth and volume of a book. The implications of his findings are very serious apart from being potentially very revealing about the deep bowels of crypto.
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