• Justin Sun’s FTX plan has caused Tron's native token TRX to trade at $0.28 on FTX while its market value on Binance sits at $0.056.
  • Following FTX and Justin Sun's agreement on a 1:1 TRX swap, the altcoin shot up by 4,126% on November 10.
  • FTX users looking to swap would be getting 17 cents on the dollar, given the difference in prices on exchanges.

Justin Sun has been an avid supporter of Sam Bankman-Fried (SBF) and his FTX empire even after its collapse this week. The fall of FTX and its sister company, Alameda, led to the exchange halting its withdrawals. However, Sun's support is now being interestingly rewarded by FTX, even allowing users to withdraw their assets, but at a cost.

Justin and SBF working together for profits?

FTX announced on November 10 that the exchange reached an agreement with TRON to rescue the traders. This plan would allow the stranded exchange’s users to swap their assets at 1:1 value with TRON ecosystems assets like TRON (TRX), Bittorent (BTT), JUST (JST), Sun (SUN) and Huobi Token (HT).

As per the deal, Tron has deployed $13 million worth of assets on the exchange to allow users to swap their assets. This led to the value of the abovementioned tokens selling at a premium on FTX, with TRX rising by as much as 4,126% on November 10. While the asset's actual value is close to $0.056 on other exchanges, including Binance.

TRXUSD 1-day chart

TRXUSD 1-day chart

This price is still 387% above the market value of the altcoin, which has created significant problems for traders. The pump came from the fact that since withdrawals have been paused on FTX, users will have to convert all their holdings into Tron ecosystem tokens in order to get them out. 

But when users swap their TRX based on the ratio of 1:1, the value of their holdings decreases dramatically. This is because when they attempt to sell TRX on other exchanges, they will only get 17 cents on the dollar based on current prices.

Thus traders will suffer losses either way - even if they swap and sell their assets on other exchanges or don't and wait until FTX resumes withdrawals, which at the moment is unknown.

The only ones to profit in this situation are FTX, its sister company Alameda and Justin Sun. Swapping at the pumped price would generate profits from commission to the exchange and could also provide Sun with a cut. This would help FTX and Alameda reduce their liabilities.

Traders looking to arbitrage this opportunity by selling their TRX holding on FTX could gain profits, but since withdrawals remain paused, their profits would remain held on the exchange. Thus, it is best to sit back and wait to see where FTX goes from here since making no money is a far better option than losing all your money.

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