Why Crypto Should Care About Justin Sun's Steem Drama

Published on by Coindesk | Published on

Mentioned in this article
Justin Sun has seized control of the Steem blockchain - with the apparent help of several prominent crypto exchanges.

In short, exchanges have staked STEEM they controlled to "Vote" for new leadership.

The turmoil began on Feb. 14 when it was announced Sun, the controversial founder of the Tron blockchain, had acquired Steemit, a blogging site that owns a very large quantity of the STEEM cryptocurrency.

In response, STEEM community leaders, the validators of the blockchain, initiated a soft fork on Feb. 23 that censored the stake of tokens held by Steemit, usually referred to in the community as the "Ninja-mined stake," as CoinDesk previously reported.

STEEM value has been generally down since the acquisition, trading at roughly $0.23 before the news and now at around $0.17, according to CoinMarketCap.

Then the accounts enacted a new version of Steem software, version 22.5, which released the tokens controlled by Steemit.

For context, the Steemit STEEM holdings have been an issue within the community for some time.

There are hundreds of apps built on Steem, including alternative blogging front-ends that could start reading a new chain rather than the one controlled by Tron.Blogging alternatives on Steem include eSteem, Busy.org and SteemPeak, according to Stokes.

Until the Steem software is changed, tokens will be locked up for much longer.

One user told CoinDesk he initiated a withdrawal of 500,000 STEEM on Binance following last night's news and it took three hours to arrive, shortly following the Binance CEO's announcement that it will "Likely remove the vote."