Brother Sun, got cut! Can you believe it? — The man most skilled at 'cutting' in the crypto circle has also become the one who got cut this time.
Brother Sun suddenly 'reported to the police', the entire crypto circle was stunned.
Yesterday, the crypto circle welcomed a piece of news that can be called a 'annual plot twist': Sun Yuchen held a media briefing on the progress of global judicial pursuit of (TUSD reserve assets).
Yes, you heard it right. This person once known online as 'Sun Cut', this man famous for 'cutting others',
this character that is always flamboyant, always aggressive, and always strong in the industry —
Suddenly started crying out: I got cut! I really got cut!!! Now I want to pursue global judicial cross-border action.
At that moment, the entire crypto world was amazed. The comments in the circle showed the most magical remark: "Sun cutting, being cut. This plot is more absurd than all meme coins."
The question arises: what exactly happened to TUSD?
Why would an issue with the custody assets of a stablecoin prompt Sun Ge to take action personally? Why would this matter shake the entire market?
More importantly—why this time, the crypto world even began to sympathize with Sun Yuchen? Today, in this article, Yongqi will clarify this drama from start to finish.
TUSD's reserve assets are suspected of being "externally controlled":
This is not a small incident; this is a systemic danger. The core message released by Sun Yuchen in the briefing is only one sentence: part of TUSD's reserve assets has been improperly controlled and misappropriated at the custody end by others, so Sun Ge wants to pursue legal action across borders.
If you do not understand the stablecoin system, you might think this is just a financial dispute.
But people in the crypto world understand: this is not a dispute; this is "the lifeline being choked." Why is it so serious? Because the core value of stablecoins is: one dollar on-chain is equivalent to one dollar in off-chain custody.
If off-chain assets disappear, are misappropriated, or taken away by third parties—this means: the soul of stablecoins is gone.
And the problem with TUSD happens to occur at the most critical position: the actual control of reserves is not in the hands of the project party, but in some "larger, more hidden system" off-chain.
What does this sentence mean in the crypto world? In one sentence: this is not a decoupling; this is being choked.
This is why Sun Ge must stand up and hold a press conference. This is also why the crypto world is shaken: Can Sun Ge's "off-chain" be manipulated by others? Then who can protect our off-chain assets?
Off-chain asset control:
The most fatal and the most overlooked "black hole" of stablecoins.
This incident has made everyone reawaken to a harsh reality: the true control of stablecoins has never been on-chain. Rather, it is off-chain.
Why is USDT so strong? Why can USDC be trusted by regulatory authorities in various countries?
Because behind them are: U.S. Treasury bonds, AAA-grade assets, compliant custodians, and professional auditing systems and regulatory penetration mechanisms.
Stablecoins are not technological products, not tokens issued on-chain, not stories in white papers. They are a governance model for off-chain asset custody.
All stablecoins know this truth. The difference is: are you in control of your assets, or have you handed over the power of life and death to others?
The essence of the TUSD crisis is: the minting rights of on-chain assets are in one's own hands, while the power of life and death over off-chain assets is in someone else's hands.
This is the most terrifying structure in the industry. Because: on-chain you are a god, off-chain you are Sun.
A sentence for Sun Ge: "On-chain is performance, off-chain is reality." The TUSD incident is not just a problem of a stablecoin project; it is the shared fate of the entire stablecoin track.
This is why it will shake the entire crypto ecosystem.
Sun Ge never thought he would be cut!
This could be the biggest surprise of 2025!
Looking back at Sun Yuchen: he has always been an offensive player, never thinking he would be "counter-attacked." The reason this has resonated so strongly is that it subverts too many people's perceptions. Because Sun Yuchen's "persona" is too strong.
He is the most powerful figure in the crypto world. He is the most capable and daring player. He is the player who makes the best use of the narrative in the market.
He has done these things: bidding for Buffett's expensive lunch, attempting to acquire Tron, BitTorrent, Steemit, expanding the USDD stablecoin ecosystem, resisting FUD, public opinion, black swans, hacker attacks, and investing in Huobi during the most panicked times. But he never expected to be cut!
He has always been the image of actively attacking, never admitting defeat. But this time—he was not only forced to defend but also "passively beaten."
This is the most magical part that the crypto world feels. Because for players of Sun Ge's level: you always think you control the game, until you realize you are also part of the chess pieces.
Event shockwave:
TUSD is not an island; it impacts three major systemic assets.
The first impact: the Tron (TRON) ecosystem.
The Tron ecosystem is extremely dependent on the liquidity of stablecoins. If TUSD encounters problems, it means: some off-chain reserves are unstable, market trust is impacted, while the TRON ecosystem must bear additional pressure; cross-chain bridges, DEX, and lending protocols will all face risks of runs.
The "stablecoin empire" of Tron has shown its first real cracks.
The second impact: the long-term narrative of USDD.
The history of USDD has proven: the ultimate fate of algorithmic stablecoins is: they must return to off-chain reserves.
And this time, the TUSD incident made everyone realize: off-chain custody is the weakest point.
USDD has been striving to improve the transparency of reserve assets, and this TUSD crisis has brought more external scrutiny to the entire system.
The third impact: the exchange ecosystem (HTX / Huobi)
Huobi (HTX) has a high degree of overlap with Tron assets. When TUSD encounters off-chain issues: transaction depth risk increases, user trust may be affected, regulatory scrutiny will sharply rise, short-term outflow pressure will increase, and the ecosystem must stabilize powerfully.
Sun Ge had to hold a press conference just to stop the spread of this crisis. Otherwise: this is not TUSD's crisis; this is a systemic crisis of the Tron system.
Then why this time, the entire crypto world "sympathized with Sun Ge" being cut?
This is the most interesting part of the matter.
Yongqi will analyze it from three levels.
First, from an emotional level: "The one who cuts others has been cut; this is a kind of fate's irony."
Everyone knows, Sun Ge has always been teased as: "Sun cutting", "on-chain leek harvester", "cutting without leaving a trace."
But this time, people saw: the one who cuts others can also be cut by others.
This is a dramatic role reversal. This is a strange pleasure of "the wheel of heaven turns well." This is an absurdity akin to historical retribution.
Thus, the comment section featured the most magical sentence in the industry: "I actually... feel a bit sympathetic towards Sun Yuchen?"
Secondly, cognitive level: "If even Sun Ge cannot protect off-chain assets, we are even less able to."
This is the essence. Because Sun Ge is not an ordinary player. He is: the actual controller of the exchange, the founder of the public chain, and the issuer of stablecoins. He has multiple national identities and ample funds, with complete legal, licensing, and resource support.
If even such players can be 'counter-killed' by off-chain custodians, what about ordinary people?
The market suddenly realized: off-chain assets are not yours; you are just their tenant.
Thus, everyone's emotions towards Sun Ge shifted from ridicule → entertainment → sympathy → reflection.
The final deep logic: "This is not a problem of Sun Ge; it's a problem of the entire industry."
This is the key. The TUSD incident is not a mess created by Sun Ge, nor is it an operational accident, much less a malicious act by the team.
It reveals: "The highest risk point in the stablecoin industry: off-chain custody control."
This has nothing to do with whether Sun Ge is "cutting". This is about: global regulatory systems, off-chain custody legal systems, banking regulatory frameworks, governance structures of financial service companies, and other issues.
Which jointly create structural risks. So this time, the crypto world has rarely understood Sun Ge: this is not Sun Ge's conspiracy; this is Sun Ge being conspired against.
The stablecoin war has entered the "off-chain transparency era."
The Sun Ge incident is a watershed; in the past few years, the core of the stablecoin war has been: on-chain efficiency, minting speed, cross-chain capability, depth, liquidity, scenarios, and scale.
But after 2025, the narrative will fundamentally change: stablecoins are not a technological battle but an off-chain regulatory battle.
The TUSD incident will lead the entire industry to experience three major transformations:
(1) Stablecoins will fully capitalize the market.
Future stablecoins will transform from: "financial products made by entrepreneurial teams" to "international settlement tools managed and regulated by financial institutions."
This path has been taken by USDC, USDT, and Hong Kong regulators. Sun Ge's incident accelerated this turning point.
(2) The reserve structure will change from "trust-based" to "strong regulatory-based."
That is to say: it is not the project that claims transparency, it is not your own audit, it is not the on-chain report,
But rather: multi-country regulatory joint reviews, bank-grade custody, judicial penetration, and risk control traceability.
The TUSD incident will become a new industry-standard risk education material.
(3) Off-chain assets will become a common lifeline for all public chains.
You will find: MakerDAO, USDT, USDC, PYUSD, FDUSD
They are all doing the same thing: making off-chain assets compliant. TUSD's reverse control once was enough to alert the entire industry for ten years.
Deep reflection: Even Sun Yuchen could be cut?
What safety boundaries do ordinary users have? This is the most important point. Because everyone is asking a fundamental, ultimate question: If even Sun Ge cannot withstand off-chain risks, what should we ordinary people do?
Yongqi believes there are three very realistic issues:
① On-chain is transparent, off-chain is always a black box.
On-chain can be audited, traceable, verifiable, and penetrable. Off-chain is always: banking systems, auditing firms, financial institutions, judicial systems, custodians, and conflicts of laws from multiple countries.
Off-chain is always chaotic. You never know: whether the reserves are frozen? Whether the custodian has run away? Whether assets are being intervened by regulators? Whether the judiciary has already intervened? Whether third parties control key permissions?
This is not a capacity issue for the project party; it's a structural issue.
② Stablecoins are not crypto assets; they are financial assets.
That is to say: you must adhere to all the logic of the financial world: compliance, transparency, auditing, financial regulation, control by banks, and legal risks.
Stablecoins are not tokens; they are part of the shadow dollar system. This has been underestimated by everyone.
③ The crypto world has never been about "the weak eat the strong", but "the strong have stronger players among them."
Is Sun Ge strong? Of course, he is. But he faces global custodians, regulations from multiple countries, and financial regulatory systems; this is not the world of on-chain DeFi. This is a larger, more complex reality system.
So you will find: you thought Sun Ge was controlling the winds and rains in the crypto world, but the hands of the off-chain world are bigger than any dealer.
This is the biggest shock that the TUSD incident has brought to the crypto world.
Yongqi summarized: "You've seen too many instances of Sun Ge cutting others,
But this is the first time to see him being cut.
The reason this incident sparked intense discussion is not because of TUSD's technical issues, nor because of Sun Yuchen's controversial persona. But because this incident punctured the biggest illusion in the entire industry.
We have always believed: a strong project party = lower risk? Large traffic = safer?
Public chain + exchange + stablecoin = foolproof
A player of Sun Yuchen's level cannot be schemed against, but the TUSD incident tells us:
The real risk of stablecoins has never been on-chain, but off-chain.
It has never been about technology, but about control. It has never been about Sun Ge, but about a larger system.
So the entire crypto world suddenly had a subtle emotion: it turns out that even Sun cutting can be cut. It turns out that the one who cuts the best can also become the target of harvesting.
This is not ridicule; this is reality. This is an irony of an era.
More importantly, it is a statement worth remembering by everyone: in the crypto world, there are no eternal dealers, only eternal risks.
Deep observation · Independent thinking · Value goes beyond price.
Star mark #Wall Street Crypto Intelligence Agency, don't miss out on great content⭐
Finally: many viewpoints in the article represent my personal understanding of the market and do not constitute advice for your investment.
