Operation Couch Cushions: Sun allegedly told Poloniex devs to take users’ Bitcoin

Shortly after Justin Sun bought Poloniex in 2019, the crypto founder allegedly turned his interest to taking 'lost' Bitcoin from its users.
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Crypto entrepreneur Justin Sun hoovered up an estimated $20 million in Poloniex users’ misplaced Bitcoin as part of an audacious scheme dubbed “Operation Couch Cushions.”

According to The Verge, Sun directed Poloniex devs to scour its “digital crevices” in search of Bitcoin “dust” shortly after the Tron founder bought the crypto exchange in 2019.

“Dust” refers to slivers of Bitcoin that had slipped through the cracks of Poloniex’s architecture and been forgotten or lost.

By 2021, Poloniex devs reckoned they’d altogether scrounged some 300 BTC, worth $20 million at the time but $11.6 million today.

“Poloniex’s digital architecture was archaic and strangely programmed, so it became common for bits of money to get trapped … as though buried in the deep recesses of a sofa,” noted The Verge.

Much of the Bitcoin dust was created by users mistakenly attempting to deposit Bitcoin in wallets designed only to receive Tether (USDT).

This Bitcoin remained in limbo, unable to be claimed or returned to the original sender. This was until Sun learned about it and ordered his teams to collect it.

One former Poloniex employee told reporters: “You’d turn a rock over and find a million dollars.”

Justin Sun denies taking user Bitcoin

Journalist Christopher Harland-Dunaway reported that Poloniex had found a way to transfer erroneous Bitcoin deposits en masse via an undisclosed address and into Poloniex’s communal wallet.

During Operation Couch Cushions, employees found Bitcoin dust that had accumulated for over half a decade (Poloniex was launched in 2013). Thousands of Tether wallets were reportedly raided.

From there, Harland-Dunaway was unable to trace the ultimate recipient of the 300 BTC as it was lost amid Poloniex’s flurry of user deposits and withdrawals.

“I think over time, he started to see all the possibilities of using Polo as more or less his personal bank,” said one former employee (via The Verge).

  • Legal experts questioned the legality of any plans to take customers’ funds for personal use.
  • Whether it’s legal to take user Bitcoin might be moot.
  • Just like his business associate Changpeng Zhao of Binance, Sun may no longer step foot on US soil as he prefers not to be bound to any one jurisdiction.

During one business meeting, as reported by Harland-Dunaway, Sun allegedly said that he would “never come to the US anymore” if his schemes collapsed.

Sun’s last reported appearance in the US was to eat lunch with Warren Buffett in January 2020 (an event Sun paid around $4.6 million to attend).

For what it’s worth, Sun denied that he took any customers’ Bitcoin and categorically rebutted the article on Twitter.

Note: Poloniex’s reputation is far less than stellar.

Read more: [Justin Sun’s Grenada post grants diplomatic immunity — in Switzerland]

Chinese social media Weibo previously banned Sun and authorities have even detained senior Tron employees to get back at Sun.

Sun already held citizenship in St. Kitts and Nevis, considered citizenship in South Korea and Guinea-Bissau, and took advantage of Maltese and Grenadian programs by which people effectively buy citizenship.

Protos previously reported that Justin Sun is the personal recipient of at least 200 million USDT.

In any case, the FBI is currently investigating Sun, according to The Verge. Sun has hired a defense attorney specializing in white-collar crimes.

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Out now: the first three episodes of our new investigative podcast series Innovated: Blockchain City.