When Chinese millionaire Justin Sun acquired BitTorrent, was he tryingto skirt the trade war? Or fly right in the face of it, no matter the cost?
By Chris Harland-Dunaway | Sep 29, 2020, 10:00am EDTPhoto by Calvin Sit/Bloomberg via Getty ImagesIllustrations by Alex Castro/The Verge
When Chinese millionaire Justin Sun acquired BitTorrent, was he trying to skirt the trade war? Or fly right in the face of it, no matter the cost?
By Chris Harland-DunawaySep 29, 2020, 10:00am EDTPhoto by Calvin Sit/Bloomberg via Getty ImagesIllustrations by Alex Castro/The Verge
Hype manof the century
If Silicon Valley operated under the idea that companies should move fast and break things, then BitTorrent had become an exception. Employees enjoyed patiently tinkering with creative projects and going home at a reasonable time, free from the tyranny of startup culture. The company was founded in 2004, and though its namesake protocol helped shape the modern internet, by 2018, the company was languishing. After all, not all influential things make money.
One BitTorrent employee told me they enjoyed the slower pace of work: “It wasn’t growing like crazy or anything.” Establishing new revenue streams was difficult, and the company was starting to look like a distressed asset. And there were rumors someone was actively trying to acquire it, a sign that management’s only means of escaping stagnation was to court a wealthy buyer.
BitTorrent had a challenging reputation. Its technology, a peer-to-peer protocol that allows large files to download quickly, was notorious because those large files tended to be pirated movies and music. Its genius came from being decentralized — spreading the burden of bandwidth, and liability, across a number of users instead of one company. The philosophy of decentralization shaped BitTorrent’s laissez-faire view of itself. It supplied a technology and had no responsibility for the pirated content illegally distributed by it.
Soon it emerged the BitTorrent acquisition rumors were true. The man buying the company was a young Chinese uber-millionaire named Justin Sun. It seemed like a fit. Sun ran a cryptocurrency company in Beijing called Tron, and like BitTorrent, crypto’s whole philosophy was built on decentralization. Some employees were excited. One told me their initial reaction was, “Oh, cool, crypto, that’s a neat space that I’ve wanted to get into.” Sun was undeterred by BitTorrent’s associations with piracy. Later, employees would discover he was more than willing to embrace it.
But right away, Sun struck some BitTorrent employees as a controversial character. For one, crypto enthusiasts noticed striking similarities between a cryptocurrency white paper Sun released and other cryptocurrency projects, including Ethereum, the world’s second-largest cryptocurrency. Twitter was abuzz with allegations that the document was plagiarized, borrowing heavily from two other papers. Juan Benet, the crypto developer behind those papers, claims that, of the 44 pages, three also contained a “basic Ethereum contract,” while nine copied exact language from Benet’s decentralized crypto projects.
One former Tron employee agreed the white paper was conceptually indistinguishable: “It was cribbed off of for sure.” Publicly, Sun defended himself, claiming the similarities came from problems with on-the-fly translation from Chinese to English. BitTorrent employees watched the controversy quietly and didn’t get any internal explanation from their new boss.
New Tron hires would be initiated into Sun’s worldview, and within a matter of months, the company’s internal business strategy was apparently “copy Ethereum,” a former employee told me. The other was “get the pump on the coin.” The oft-repeated phrase meant doing anything to make Tron look flashy and lobby people across the world to convert their national currencies, whether they be renminbi, rupees, or dollars, into Tron’s digital cryptocurrency — thus, pumping up the value of Tron and Justin Sun himself.
If cryptocurrency and the BitTorrent protocol were technologies built on the idea of decentralization, Tron’s acquisition of BitTorrent seemed designed to centralize power on Sun. Cribbing Ethereum’s white paper would be just the beginning in a series of ethically dubious moves by Sun: giving away Tesla cars and bidding millions on a showy power lunch; launching products that effectively rewarded piracy and products that exploited pornography. Then there was his alleged abusive conduct, which ranged from threats of violence to actual physical violence in the office.
Employees had mixed opinions when BitTorrent was acquired. None of them realized how much their steady, quiet work environment would be upended as Sun’s bravado and self-promotion steered the company into the center of the US and China’s dangerous geopolitical conflict — the trade war — all in an effort to, as Sun might say, get the pump on the coin.
Anyone following Justin Sun on social media couldn’t be faulted for thinking his reign over Tron consisted solely of insufferable, nonstop winning. In trying to separate facts from fiction in Sun’s story, and Tron’s, I spoke to former and current employees, both in China and the US, both rank-and-file and senior level, across multiple departments. In all, 18 insiders, current and former, spoke to me on the condition their names not be used out of fear of retaliation, with one exception who is on the record. Sun and Tron did not respond to repeated requests for comment.
Sun isn’t outwardly intimidating. He’s been described as a self-styled “whiz kid.” He’s 30 years old and makes sure it’s widely known that he graduated from a special business seminar run by Jack Ma, a co-founder of Alibaba and one of Asia’s top multibillionaires. According to Sun’s autobiography, Brave New World, his meeting with Ma inspired him to become wealthy and successful. In Sun’s first Instagram post, he stands side by side with Ma, holding a graduation certificate. It makes him look like a protégé.
Sun’s first major success was an app called Peiwo, which translates to “accompany me,” an audio-based mashup of Tinder and a live-stream chat room with 10 million users. The app matched people using voice clips, but the app also had audio chat rooms where hosts flirted with soundbites that generally contained content that exceeded pillow talk. In fact, a user might drop into a chat room only to discover their host was already in the throes of orgasm. It was easy to understand why the app was successful when its content so often bordered on some kind of aural pornography. Eventually, Peiwo was booted from the Apple and Android app stores, and the Chinese authorities shut it down, along with other content that “disrupts socialist values.”
Somewhere between Sun’s constant travel back and forth from Beijing to San Francisco, he bought BitTorrent for $140 million. Part of what made the deal unique was the clash-of-superpowers atmosphere that surrounded it. According to the Pentagon, Chinese businesses have tapped into a roaring pipeline of intellectual property and funneled it back to mainland China. In the summer of 2018, some American experts were saying the US-China trade policy damaged the US economy with little benefit and evoked Cold War paranoia. After the purchase of BitTorrent, Sun suddenly straddled the conflict, with one foot in Beijing and the other in San Francisco.
Senior employees at BitTorrent were concerned the US government might scrutinize the merger. Sun was unfazed by the risks of the US-China trade war looming above. “Justin looks at barriers and thinks, ‘I can get around these barriers,’” a former senior employee told me. “In some ways that’s great. It’s kind of the entrepreneur’s mindset,” they said. But “that would include rule-breaking on the less scrupulous side of things.” Sun seemed to push those concerns aside with what became a famous phrase inside the company: “I think it’s okay.”
After all, even Jack Ma’s Alibaba is blacklisted by the US Trade Representative for IP infringement. But BitTorrent had survived for so long precisely because the company’s senior employees and lawyers avoided gray areas. They provided a technology. They didn’t distribute pirated content. “We want to make damn sure we’re doing things legally.”
Sun’s imagination lay in the globe-spanning Wild West of cryptocurrency. This was a place where the rules were unclear and regulations hadn’t been widely enforced. Since the rise of bitcoin, a bevy of cryptocoins have emerged, jockeying for dominance, their value often entirely speculative. Their sales pitches focus on currency that can’t be manipulated or controlled. “Decentralize the web” is an official marketing slogan Tron uses.
Sun’s acquisition came with perks. BitTorrent moved out of its old building encircled by a freeway ramp and into a skyscraper downtown at 301 Howard St. “The new office is fucking beautiful, oh my god,” a former employee said. They marveled at the panoramic of San Francisco Bay. Catered lunches became the norm. By this point, employees knew Sun only through video chat. As one former employee described, “He came off as very casual, just like young-casual. I would say no nonsense, but at this time, it was kind of in a playful way. Not in a threatening way.”
Sun finally flew to San Francisco to build his cryptocurrency empire, wearing his signature Gucci sneakers bedazzled with large pineapples over the laces every day. Tron’s “initial coin offering” of its own cryptocurrency, TRX, had gone extremely well. Sun told employees that, for one day, he was richer than Bill Gates.
“When you see him in real life, he thinks he’s a celebrity. He doesn’t smile.” He had an assistant bring meals on a platter to his office. Multiple employees claimed that Sun’s ego was easy for sycophants to subtly exploit. One of Sun’s lieutenants at Tron would carry Sun’s bag across the office for him, deferentially walking a half step behind him. It indulged Sun’s own image of himself as famous and powerful. Among English-speaking rank-and-file, he was greeted casually, “Hi, Justin.” But a former employee who grew up in China says Chinese rank-and-file were expected to call him, “Sun Zong,” which is far more formal. “It’s like, I’m terrified of you.” As another Chinese employee put it, “When you talk to your own people, you tend to be worse,” they said. “We are more tolerant of higher pressure and expectations.”
Sun fancied one of the conference rooms, so he seized it as his office. It was impossible to see through its frosted glass walls, but employees occasionally entered to fulfill random tasks for Sun and emerged with concerns about what they saw. They were baffled by occasional piles of cash (“stacks of hundred dollar bills!”) that sprouted on his desk, or one time, an envelope of ones (“mad stripper money!”). It was noteworthy because Sun apparently had no lock on the door. He juggled more than five phones and sometimes disappeared to China for weeks, leaving his phones, and potentially proprietary information inside them, laying on his desk. Some employees feared a shakedown if one went missing.
While Sun may have played fast and loose with his stacks of cash and phones, his expectations for employees were very different. A former employee says that Sun once began a meeting with a five- or 10-minute diatribe about how his driver accidentally locked him in his car in Beijing. Something about a child safety lock. “Who hired this person?” Sun demanded. The peak of his entitled behavior, according to a former employee, was when he fired his personal assistant because she booked a doctor’s appointment and sent him along in an Uber. Sun was furious. Sun expected the doctor to come see him. HR explained to the assistant that she didn’t know how to serve rich people.
“Why did he behave like a spoiled brat?” a former employee wondered, “He reads as someone who ended up with a lot of money and had no idea how to use it.” A former senior employee thought that Sun imagined himself as coming from “the kind of elite in China, where there’s these men who think like, ‘I’m destined for greatness.’”
Employees had questions about where Tron was headed and submitted anonymous questions for BitTorrent’s traditional Q&A with the company’s senior leadership. Hours before the Q&A, Sun called together his marketing team “to send him the list of questions,” so he could censor questions he didn’t like, says a former employee officially briefed on the meeting. Sun started reading existential questions about Tron’s future, such as, “What if TRX [Tron’s crypto] drops to zero?” Sun’s mood soured instantly. “He took it extremely personally.” According to the employee, he began yelling and threw a tantrum. “Whoever asked this question, we’re going to track them down,” Sun seethed, before threatening “to kill their entire family.”
The Q&A took place well after work via Zoom. The office’s central conference room filled with about 10 employees at a long table flanked by frosted glass walls. Sun and Tron leadership in Beijing joined remotely. A senior Beijing employee answered questions, and employees’ concern over the survival of the company bubbled up again. The Beijing employee dished out a tongue-lashing, “essentially saying none of you should question Justin. He knows what he’s doing, he’s gotten this far, how dare you question the ability of Justin? It’s disrespectful, it’s spoiled to ask this.” Employees exchanged looks with each other and dug in, defensive about their unlimited vacation policy. The reply: “Nobody can tell you when you can take vacation. Only the Chinese government can tell you when you can take vacation,” a former employee recalled. “That’s when the culture shift started coming in.”
“What if TRX drops to zero?” stabbed at the heart of every cryptocurrency’s dilemma. It derives its value from people actually using it, which is why Sun evangelizes Tron. As one former employee told me, “I would say he’s the hype man of the century.”
It’s an odd accolade. On one hand, it’s a compliment. On the other, it’s a warning.
Because he was born in a poor, rural province of China, Qinghai, Justin Sun always felt he needed to prove himself. “From the very beginning he had this dream to do something that was apparently impossible,” a former employee told me. Sun’s autobiography says his mother was an unrelenting “tiger mom,” and his dad was a penny-pincher who hated throwing away old belongings. As a child, Sun left home to study the ancient game Go in Wuhan. Other articles say that while he was away at Go school, his parents divorced, but he didn’t know until he arrived home.
He overcame his disadvantages with cleverness and focus. “He’s a machine. He can work 20 hours a day.” Sun started to believe he should impose his work ethic across his company.
Sun flooded the San Francisco office with articles from the Beijing PR shop. “A lot of them were about Justin Sun and how he is a genius and how talented he is and his leadership. Really just singing the praises of Justin Sun,” a former employee said. “It was really disgusting.”
Other articles came through the transom, all about a new company work culture: “9-9-6.” As one former employee who grew up in China explained, “Basically, a lot of internet companies in China work this 9-9-6 schedule from 9 AM to 9 PM, six days a week.”
The first article that caught everyone’s attention featured Sun’s hero, Jack Ma. In the article, Ma demanded employees be grateful they have a 9-9-6 job, that people envied them. “I shared the article and people were really confused in the US office,” a former employee told me. “Like, what is he implying? Is he trying to say that we should start this 9-9-6 bullshit?” Some of the Tron employees in San Francisco witnessed 9-9-6 culture in the Beijing office. During one 5AM call, Beijing time, SF employees were surprised by the appearance of the lead engineer on the call. “He turned on the video and he looked like he just rolled out of bed or something. He said, ‘I slept in the office tonight,’” a former employee recalled. “I really feel for them.”
“Americans by contrast, they’re lazier, but they’re more creative,” a former senior employee recalled Sun explaining. “So he’d kind of give the grunt work to the Chinese team,” they said, “the engineers, the developers, no question, they’re working 9-9-6.” There was an irony in Beijing, though. While the engineers were indentured to the 9-9-6 credo, coding at all hours, everyone else at the Beijing office ignored it. So long as they maintained “the illusion.” Sun, after all, was in San Francisco.
HR mandated that employees replace Slack with a Chinese equivalent called DingTalk. It came with added surveillance features that went as far as using Apple Health to count people’s steps and pinged users at all hours. “DingTalk is spyware,” said one former employee. Another employee asked HR what might happen if they refused to install it. HR replied that a list of noncompliant employees was being compiled and sent directly to Sun. The former employee harkened back to the moment. “Okay so we’re doing threats now?”
Employees had difficulty gauging what changes in Tron’s work environment were attributable to Chinese tech work culture, where management generally exercises far more control, or whether these changes were specific to Sun’s leadership. A couple of former employees told me about their past experiences working in Beijing. They saw aspects of China’s corporate culture in Sun, but thought he was actually an outlier, “one of a kind.”
Sun had more in common with another powerful American, which earned him the moniker “The Chinese Trump.” On at least one occasion, Sun fawned over Donald Trump’s marketing at a meeting. A former employee also believed both had an affinity for dictatorial power. Sun only selects “yes men” for his inner circle, former employees explained, so they stake their future on him. One compared Sun’s apparent insistence on loyalty to Trump’s control over the Republican Party, except Sun is “many levels better than that.”
Despite Sun’s evangelism for a “decentralized” internet where ideas compete and the best one wins, he and his tight clique of lieutenants dictated terms to his workforce. His penchant for control also bled into Tron’s business dealings.
A former employee says when Tron was pilloried on a popular Reddit thread, Tron paid the moderator, “perogies,” to allow the company to erase negative posts. A former employee said perogies was actually “a hardcore-fucking-Redditor to the bone, all about free speech.” Free speech is part of the ideology of decentralization, where ideas flow without gatekeepers. Tron started deleting any post it wanted. Bristling, perogies threatened to reveal his payments publicly. The Beijing office took over, the former employee said, “and he disappeared into the fucking night, never heard from him again.”
Even though Sun went to extremes to control Tron’s public image, his own app store, called the Tron Network, was a free-for-all. Users purchased some apps with Tron’s cryptocurrency, and the company sometimes took a sliver of the app’s revenue. The most successful were gambling apps, employees told me, and Tron preferred to “squash” any app by imitating it. Sun eventually built an office in Shenzhen, China, where programmers worked on copycats. Meanwhile, questionable developers gathered on the Tron Network like ants to sugar. “We didn’t know who they were. We had zero way of contacting them. So these people would get on our blockchain and scam. Scam all day, 24/7. It never ended,” a former employee said. Complaints streamed in, like, “Hey, I just lost my life savings!” A former employee recalled Sun and the senior Beijing employees ignoring the scam warnings during weekly meetings and sometimes mocking English-only employees’ ideas in Mandarin, before telling the interpreter, “Don’t translate that.”
Scammed users tried to fight back. Letters from the Better Business Bureau arrived in Tron’s San Francisco office one month. “They were coming in quite frequently,” said a former employee, “like, piles building up.”
Even though Tron succeeded in deflecting scam victims and criticism on Reddit, the company was about to suffer a very public self-inflicted wound.
As a promotional stunt, Sun raffled off a Tesla. Sun tweeted a pre-recorded video of the drawing, but people noticed a flash on the screen, which, slowed down, showed an image of the winner’s Twitter profile before the announcement. Crypto watchers thought it was a sham. Sun blamed Twitter’s video compression, calling it a “glitch.”
“Somebody fucked up and the graphic came on the screen before [Sun] read the winner,” a former employee says, “which to any Internet conspiracy theorist is like, ‘This is bullshit, they literally came on the screen before he picked it!’” It was a real contest, employees insisted. But the online furor was too much, and Sun retracted the Tesla. Sun did a new drawing, with a new winner, but the controversy continued. So he gave away two Teslas, one for each winner.
Sun’s leadership style caused the “fuck-up,” a former employee believed. “Justin doesn’t care about how to actually run a business,” they said. “He just cares about making loud noises and getting results.” When employees reviewed the Tesla sweepstakes in a meeting later, they realized, “Wow, this is actually illegal.”
The Tesla debacle was important, internally, for another reason. “That’s probably his biggest meltdown,” a former employee said. Multiple former employees could hear Sun screaming at people in his office, his shouts echoing down the hall. Sometimes he leapt out of his office, slammed the door, and unleashed a rageful howl at no one in particular. His assistant sitting outside his office didn’t budge. Employees talked about times when they could hear him kick his door while eviscerating workers in his office or over the phone. Everyone dreaded meetings. From then on, “there were always rumors that he wanted to fire a bunch of people.”
After the disaster, a Tron employee ran into a top communication manager for Justin Sun’s hero, Jack Ma, at a function in the Bay Area. “As soon as I mentioned Tron and Justin Sun, she said, ‘Please tell him that we don’t want to have anything to do with him.’”
Nearly everyone I talked to said the cornerstone of Sun’s business wasn’t necessarily technology, but using marketing to extract money from users. In a meeting, Sun once compared the marketing team’s objectives to the business of a “whorehouse.” With the failure of the Tesla stunt, the answer, to Sun, was to pursue a bigger, even flashier stunt: be the highest bidders at a charity auction for lunch with Warren Buffett.
“He thrived on just doing anything for attention and clout,” a former employee says. “Clout-chasing, as the kids call it.”
Sun won the auction, costing him $4.57 million — roughly the value of 130 Teslas. When the marketing department asked Sun how high he was willing to bid, Sun replied, “I don’t care, I want to win it regardless.” There was no cap. “It’s hard to get him to pay a bill but it’s easy to get him to spend money.”
The media hype was considerable. But as a CNBC interviewer pointed out to Sun, Buffett had “compared Bitcoin to gambling in Las Vegas” and said cryptocurrency was “rat poison squared.” Sun gamely laughed and insisted that one of the world’s most successful investors didn’t have the right sources of information.
Not long after, President Trump tweeted that he’s “not a fan of Bitcoin and other Cryptocurrencies,” whose value is based “on thin air.”
“Mr. President, you are misled by fake news,” began Sun’s reply, “Bitcoin & Blockchain happens to be best chance for the US! I’d love to invite you to have lunch with crypto leaders along with @WarrenBuffett on July 25.” Sun invited Trump to lunch.
A week later, Tron’s Twitter account announced the lunch was postponed because Sun had kidney stones. The next day, Chinese newspapers published stories that Sun was not only suspected of illegal fundraising, gambling, and money laundering, but supposedly detained by Chinese authorities in Beijing.
That afternoon, Sun’s Periscope account went live. He appeared in his white-walled San Francisco apartment, the Bay Bridge over his shoulder. He riffed about Tron’s business plans, before saying, “I’m completely fine.”
Employees told me what actually transpired. The Chinese authorities had been calling Sun for weeks, “essentially saying, you can’t have this lunch,” a former employee says, because Buffett was a “capitalist pig symbol.” Things boiled over when Sun invited Trump. It was apparently intolerable for a Chinese citizen to lunch with the US president during the trade war. The Chinese government kept calling Sun, “and he had been essentially ignoring them,” a former employee says.
The authorities targeted Tron. In Beijing, “they raided the office and took six top employees.” They even found Sun’s estranged father in whichever province he was living and detained him, too. Their phones were confiscated, and they were told Justin Sun was under investigation for corruption. One of the detained employees was so scared she began crying. Six hours later, the authorities returned and said, “Here’s your phones back if somebody wanted to call Justin and mention that maybe you shouldn’t have this lunch with Trump.” Their final message: “You can’t mention this to the press.”
Sun finally told his inner circle what happened. “He was sort of laughing and he said, ‘Oh you know, one of the women was crying,’” a former employee said. “I thought, I’d be fucking scared. I would have shit my pants if the Chinese government comes in.” Yet, Sun was chuckling about it. “That’s just so callous.”
Tron convened an emergency “war council,” and they allegedly advised him to concoct a medical excuse to get out of lunch with Buffett. Kidney stones were the result. The stories emerging in the Chinese press were also false. “China decided they were going to get even with him in the state newspaper,” a former employee recalled, “basically saying that he was a crook.”
Sun gathered the company for an all-hands. He sauntered in, laughing. “Now I understand why they say fake news, right?” he said, assuring the workforce the stories were untrue. “My jaw just hit the floor,” an employee said. Only hours before, they were told Sun had kidney stones, yet here he was, in perfectly good health. “It’s like a whole company full of people standing there being lied to.”
The lunch was postponed indefinitely. A day later, Sun made a long and strange post to his millions of followers on Weibo, the Chinese equivalent to Twitter. “I didn’t sleep all night yesterday, and deeply reflected on my memories and was introspective of my behavior and words — I felt ashamed for my over-marketing,” he said, according to a translation. Sun called Chinese regulators “elders” to whom he would “open my heart” and heralded “the rapid development of socialism with Chinese characteristics in our country’s new era.” He closed with a promise: “I will repair my shortcomings, reduce my vocalizations on Weibo, shut the door and decline visitors, reduce the media interviews” in the name of “national interests.”
It was the most uncharacteristic apology Justin Sun had ever posted. He deleted it shortly after.
While Sun suffered publicly, workplace standards deteriorated: “Everything went toxic real fast.” There were plenty of reasons for co-workers to confide in one another, but instead, an incongruous silence settled in, and events within Tron stayed remarkably well-hidden.
During one of those days, a new Tron software engineer fresh out of San José State University, Lukasz Juraszek, arrived at work early, unaware of a shocking incident he was about to witness. Juraszek grew up in Poland and flew to the US to work as an au pair. He met his future wife on the flight over, and the precocious children he babysat helped him learn English. He piled up debt pursuing a bachelor’s degree in computer software engineering. His new job at Tron was crucial to both his career ambitions and complying with US visa requirements. Juraszek was sitting at his desk that early morning at Tron, when Sun rushed out of his office nearby and accosted someone out of sight behind Juraszek’s low cubicle wall. The argument escalated. Juraszek peeked over his workstation divider across the office and saw Sun and the head of engineering, Cong Li, standing a stone’s throw away outside a conference room.
“At one point they both looked at me,” Juraszek told me, and he ducked down.
When Li joined the company, he was a soft-spoken, diplomatic technical lead with an infectious smile. He scaled the company ranks because “he got Justin to trust him,” a former employee said. But there was another more Darwinian reason Li succeeded. He was one of the few willing to tolerate Sun’s constant demands and in his case, threats. Once, on a call with multiple other employees, Sun half-jokingly, half-seriously, threatened to fire Li if he didn’t do what he said. It seemed to stick with Li.
Juraszek sat listening to Sun yell at Li, struggling to focus on his work. “Your hands are shaking, you have cold sweats,” he said. “Then I heard spitting.”
Li screamed. Juraszek stood and looked over the cubicle wall and saw Li recoiled, holding his hand on his arm. Sun had just pummeled him.
Nearly every worker I spoke to recalled only hearing a fuzzy rumor about it. But it wasn’t some strange unreality. Li later confirmed to another employee, “Justin hit me.” The violence seemed to change Li and the office.
Tron refocused on a project called BT Movie. Sun pressured Li to release it as soon as possible and micromanaged him, wearing Li thin, taking his time away with his two little daughters, sometimes calling him at four in the morning with inane requests. BT Movie was a decentralized app designed to distribute videos and movies. Uploaders were rewarded with cryptocurrency. But one employee worried the design might actually encourage the distribution of pirated movies or be “gamed by hackers” who would defraud the company. The employee also said BT Movie might alarm US regulators because other illegal content might pass through Tron’s servers, like child porn.
Oddly, according to Juraszek, BT Movie discussions were kept off the record or informally messaged about on DingTalk.
Juraszek’s supervisor, a Chinese employee named Zhimin He, was just as concerned about BT Movie. One day, Juraszek was at his desk, when he heard an argument erupt in a nearby conference room that was so loud it cut through the electronic dance music Juraszek was listening to on his Bose noise-canceling headphones. He could see two feet where the conference room’s frosted glass ended, near the floor. It was Cong Li and Zhimin He. There was a loud crack of a laptop spiked on the table inside. Then, Juraszek heard a sound “like a punch, slap, or a strike of a hand.” Li barged out of the conference room, flinging the door wide. Juraszek saw Zhimin He, “apparently extremely disturbed and in an awkward sitting position, leaning back.”
Juraszek turned to his teammates, “This is crazy what’s happening at this company. It goes on and on.” He walked to HR, hands shaking the whole way. He felt that he was crossing a threshold, putting his job at risk, and thus, his US visa. “It’s hard to explain to a non-immigrant, but that’s something that’s in the back of your head always,” he said. “If I don’t find a job within a month, I’m going to be deported.” After he detailed what happened, the HR specialist told Juraszek that if there was any retaliation, “Please let me know.”
Shortly after, HR introduced a course on workplace harassment.
When employees pressed Cong Li with concerns about the legality of BT Movie, he told them they “should not worry about it.” After all, “we just did the engineering.” It matched Sun’s mantra: “I think it’s okay.”
Juraszek understood this as a plea of ignorance. At that point, the software supposedly wasn’t operational, but Juraszek was suspicious. He went and booted up BT Movie to inspect. It was already live, and what he saw shocked him. There was a long list of Hollywood movies available for download, starting with The Lion King, which had only been in theaters for a couple of weeks, followed by Once Upon a Time in Hollywood, Godzilla: King of the Monsters, Hobbs & Shaw, John Wick: Chapter 3, Avengers: Infinity War, Ant-Man and the Wasp, Black Panther, and others.
Juraszek later learned HR inaccurately reworded his complaint about Li, so he corrected them in writing, only to be warned that, according to the employee handbook, he was “disrupting the workplace.” “My stomach sunk,” he said. “It was a confrontation of my values, my principles, what I want to accomplish.” He understood HR to be saying, “You little dude. What are you doing? That’s not your place. Just shut up and do your job.” Juraszek threw the employee handbook right back at HR, listing the litany of incidents that broke company rules. An hour later, the HR email correspondence disappeared. “As if I had never sent it.” That afternoon, Juraszek’s computer stopped working. He was told there were “server maintenance issues.” Puzzled, Juraszek poked around and discovered other people had accessed his Tron email. More emails went missing.
Juraszek felt the walls closing in. He opened DingTalk, the office communication app employees feared was spyware, to screenshot evidence. He surfed to the BT Movie discussions and saw a long list of “Message deleted. Message deleted. Message deleted.” Juraszek rushed to the project manager, Tom Mao, and told him that messages were vanishing on DingTalk, and they needed to preserve evidence. Mao agreed but seemed twitchy. After they finished talking, Juraszek peered over at Mao’s screen and says he saw him deleting messages on their back-up Slack thread. “Absolute betrayal,” Juraszek said. (Mao did not reply to a request for comment.)
On the train home that evening, Juraszek filled out an IC3 complaint and sent it to the cybercrime division at the FBI.
Inspired by whistleblower Edward Snowden, Juraszek tried to filter out his emotions and build a methodical process for collecting evidence before he ran out of time. “There’s no real sleep,” Juraszek said. Several days later, Cong Li, HR, and Tron’s lawyer pulled Juraszek into a meeting. They accused Juraszek of “sharing company information with [at least one] third party.” He was fired.
When I interviewed Juraszek, he wore a Tron T-shirt. On his computer, he showed me the source code for BT Movie, which is publicly accessible. The code shows that, as a rule, Tron takes 20 percent of all tips that users send to each other in BT Movie. The coding for the app also uses version control, which logs every single change to the code and who made it. Every person who makes a change has an identifier — a random string of letters and numbers. But they’re not random to Juraszek. He has a list of the unique identifiers that belong to the Tron employees who worked on BT Movie. He showed me that Tron employees uploaded torrents that would direct users to servers where pirated Hollywood movies lived. Then, Juraszek highlighted a bit of code that showed Tron drew the remaining 80 percent of the tips for every movie they uploaded. But were the pirated movies sitting on Tron servers? Impossible to know, Juraszek said.
Tron had waded directly into one of the United States’ central grievances in the trade war: intellectual property theft. “It’s an unreal situation,” Juraszek told me, thinking back to his last days and hours at Tron. “It’s a melding of fiction and reality.”
The FBI never replied to Juraszek’s complaint.
In March, Cong Li resigned. In some ways, Sun had treated his right-hand lieutenant far worse than Juraszek, the whistleblower.
Sun never discovered the most important reason why Li was so pliant to his every whim: Li, like Juraszek, was in the US on a work visa. A former employee said Li tried to keep his visa status carefully hidden from Sun. If Li had been fired, his family might have been forced to leave the US.
If BT Movie was a liability, it was nothing compared to BT Live. It troubled multiple former employees, and Sun apparently wanted the true scope of the project kept secret.
On the surface, it was just a live-stream app. In fact, BitTorrent’s brainy founder, Bram Cohen, originally coded the bare bones. “It got canned and set aside, so it had to be revived.” But it was a “bizarre” situation where the engineers didn’t really know what they were building. Sun demanded “a very, very aggressive schedule.” Employees thought the project was “cool,” but the market was saturated with live-stream apps like FaceTime, Facebook Live, and Skype. A confused former employee wondered, “What’s the selling point?” “It’s not hard to stream video to people on their phones,” another employee said. Then, management added a familiar objective: decentralize it. “And so you say that word and say, ‘Alright, now this is a really interesting problem.’” The idea was to use the BitTorrent protocol to support the live streams. There would be no central system controlling and forwarding the live streams. “And I’m thinking, man, it’d be great if during the Arab Spring this app existed because Syria was turning off the internet and stuff like that,” a former employee says. “So that’s how we got kind of amped for it.”
It looked like maybe Sun was pursuing software that dissidents all over the world could only dream of. He attended most meetings and called the shots. Employees had never seen this before. “He gave us a directive, and it’s basically like, ‘Go copy BIGO Live,’” a former employee said, before adding a caveat, “I can’t say that’s a direct quote because almost all the meetings that I was in with him, he did not speak English. And there’s a translator involved.”
BIGO Live is a Chinese live-streaming app with chat rooms that users watch. The viewers pay streamers with tips. BIGO Live had used India as a beachhead to get outside the Chinese market. So Tron put Richard Hall, a brash British expat and Silicon Valley veteran, on a plane to India to research BIGO Live.
Employees at the time say Hall was initially excited by his findings. He surveyed streamers and discovered BIGO Live ran a sloppy operation in India that would be easy for Tron to beat. Live-streamers earned little to nothing. Since Tron needed streamers to jump-start their audience, Hall’s idea was to pay them “straight up rupees,” a former employee says. “We just give them, you know, a fair amount of money for their time. We’ll easily convert them over to using BT Live.”
Then, Hall began interviewing BIGO Live streamers. Typically, they were Indian college girls looking for a side hustle. He learned they endured a daily torrent of lewd remarks. The worst offenders seemed to be wealthy oil emirs from the Gulf. A handful of BIGO Live streamers talked to me on the condition their names be withheld. They confirmed they were barraged with sexual harassment and the platform’s moderation was lacking. One streamer remembered her colleague’s headshot was photoshopped onto a naked body and circulated by a repeat offender. A shaken Hall returned to San Francisco with a simple message: “We cannot not have moderation. We must have moderation.”
Hall kept pushing for moderation for several Tron projects. Later, when Hall was preparing for a $10,000 vacation cruise with his family to celebrate his 50th birthday and 20th wedding anniversary, Tron pressured him to cancel it, despite it having been approved months in advance. When Hall started sharing memos of his conversations with management, he was told, “this will not end well for you.” Ultimately, Hall was called to a meeting and fired because he was “not a fit.” He walked to a co-worker’s apartment, had a whiskey, and vowed to sue. (Richard Hall declined to comment for this story.)
Sun wasn’t concerned about Hall’s discoveries in India. But former employees say BitTorrent’s CEO at the time, Jordy Berson, who was deeply involved in BT Live, made a commitment: “We will not do it unless there’s moderation.” Besides, the cost of an officeful of moderators in India was negligible. And at least in theory, BT Live wouldn’t survive a single day in the Apple or Android app stores without moderation.
Sun was furious with the team’s objections. “He basically wanted to replace the entire team with the China team. He just had it. He had it with us.” San Francisco employees tried commiserating with the head of BT Live’s engineering and product team in China, whose name is Garlic. Garlic called Sun, “Laoban” or “Boss” in Mandarin, and said, “At the end of the day Boss will just do what Boss wants and you just gotta do what he says.” They doubted Garlic would resist Sun’s worst instincts. As Sun pushed forward, no one knew that someone in the San Francisco team discovered his well-kept plans for BT Live.
I was told about a product designer on the BT Live team named Oscar Ko. He was an American BitTorrent employee and a churchgoer who washed the feet of San Francisco’s homeless some weekends. And he had a secret skill.
“He speaks Mandarin,” a former employee says, “And I didn’t know that. And neither did anybody else on my team.” One day, Ko suddenly quit. A confused former employee asked what happened. “Talk to me offline,” Ko said. At their rendezvous, Ko told a story. Sun walked into the conference room in San Francisco during a meeting one day and explained offhand in Mandarin what his vision for BT Live was, then stood up and left. Ko understood everything. “Justin Sun wants this to be a porn app so it can get around the Chinese censorship laws and Great Firewall.”
The key was exploiting the BitTorrent protocol. “Because the nature of [peer-to-peer decentralized sharing] it’s extremely hard to track down and shut down when something gets started and gets seeded and gets transmitted,” a former employee explained. “Best case scenario, people can talk about freedom, democracy, Tiananmen Square, and political reforms and all that stuff.” But it was a Pandora’s box, they explained. Anything could be live-streamed — child abuse imagery, terrorist content. “Even worse, you can have people livestreaming themselves murdering people. And the government and authorities wouldn’t have a way to shut it down.”
Now, the team knew and confronted Sun. But his response shocked them. “He explicitly wanted Pandora’s box! To him, because in China, in their environment where everything is restricted, where everything is so tightly controlled, he imagined if he can open this Pandora’s box and then the government can’t shut it down. He would have an exclusive stranglehold on the market in a place where anything goes. Anything that people used to not be able to see, to do, to broadcast… Now, anyone can do that, at any point, and it’s unstoppable.”
And everyone would use Tron’s cryptocurrency to buy in.
The BT Live team pulled the brake lever, hard. At a meeting, they demanded Sun moderate the app. Sun walked to a whiteboard with an idea. He drew a square. Then he drew a line through the middle, it looked like the front page of a newspaper. Everything above the line, or “above the fold,” was the landing page users would see when they accessed BT Live. All completely moderated. Then, Sun pointed to the bottom half of the square. “Below the fold” is where all the unmoderated content would go. All users needed to do was scroll down.
Employees in the meeting were appalled. The team even developed a $9,000 moderation toolset that could be automated. Sun barely acknowledged it. When the team leaders briefed their engineers on Sun’s moderation ploy, one engineer slammed their laptop closed and “rage quit” the meeting.
Shortly after, the team demoed the app for Sun. “It’s very clear Justin doesn’t care at all. He’s totally checked out. He’s not paying attention,” a former employee believed. Nevertheless, Berson, BitTorrent’s CEO, sent an email praising the BT Live team for their hard work. He announced his resignation the next day. “He was 100 percent fired,” a former employee says. Sun transferred the project to the Chinese office, where employees suspect it could be completed later. “In my opinion, Justin Sun is an evil genius,” a former employee said. “Nothing can stop him.”
Months later, Lucasz Juraszek and Richard Hall filed a lawsuit against Justin Sun: civil charges ranging from fraud to harassment to whistleblower retaliation. They demanded a public trial. Sun’s lawyers requested arbitration. The judge sided with Sun, meaning details from the case may never be public.
Juraszek and Hall’s lawyers sent the lawsuit’s 52-page complaint to a US attorney at the Department of Justice in San Francisco, but they never heard back.
Decentralization, as a principle, carries the irresistible promise that pervaded the early days of the internet, when it was less regulated and wasn’t saturated with surveillance. It was free in a way that still makes the era feel like a halcyon touchstone. Perhaps decentralization truly could achieve that kind of internet. But it’s extremely difficult to believe that Justin Sun is seriously aiming for such a lofty goal. His business ideas don’t aim to enhance decentralization but merely to exploit the idea for profit, regardless of the harm it could cause. What decentralization has offered Sun is a plausible ideology under which he can continue to avoid accountability.
“There’s no bottom to how low he’s willing to go to achieve his goals,” a former employee said. “He doesn’t care about anybody. He doesn’t care about anything.” Wrung out and exhausted for standing up for their beliefs, a procession of employees quit or were fired. The final tragedy being that Sun took idealists and made unbelievers out of them. “I believe in the technology. I believe the technology has purposes,” one said, before thinking about the real-life consequences of how Sun wanted to implement it: “This is not something he would ever even consider.”
“I have to see the human cost of all this.”