Valkyrie, a Crypto Asset Manager, Reveals Justin Sun as their Top Secret Client

• Justin Sun, the founder of Tron, has his majority of Bitcoin stored in U.S.-based Valkyrie Investments.
• Sun is one of the biggest shareholders of Valkyrie and has provided major investments to the company.
• Valkyrie has partnered with Tron, creating a TRX trust and a BitTorrent trust, and promoted Tron using its own marketing materials.

Justin Sun, the founder of Tron, one of the largest and most influential projects in the cryptocurrency space, has been revealed to have a major stake in Valkyrie Investments – a U.S.-based crypto asset manager. Sun’s bitcoin (BTC) holdings with the firm amount to over $580 million, which is over 90% of the money stored in Valkyrie’s largest division, Valkyrie Digital Assets LLC.

This information comes from a private financial document that CoinDesk has reviewed, which shows that Sun has one of the largest stakes in the firm. Sun has also stated that he is one of the largest shareholders in Valkyrie. This relationship between Sun and Valkyrie has been beneficial to Sun’s empire in many ways, with Valkyrie building investment products for “Justin tokens” such as Tron’s TRX and BitTorrent’s BTT, which many other crypto asset managers have avoided.

In addition to this, Valkyrie has also promoted Tron using the blockchain network’s own marketing materials, and even allowed the Tron logo to be featured when Valkyrie rang the bell at Nasdaq in September. Valkyrie’s Chief Investment Officer, Steve McClurg, refused to discuss the source of Valkyrie’s client funds, citing confidentiality. Sun did not respond to CoinDesk’s request for comment.

Valkyrie’s assets under management (AUM) have been bolstered by Sun’s investments, with Sun’s tokens anchoring the firm’s largest trust at $37 million. There has also been a $700 million partnership with crypto protocol NEM/Symbol in January, though the deal fell apart months later. In October 2021, Sun stated he was the largest investor in Valkyrie’s bitcoin futures exchange-traded fund (ETF).

John Key, the former head of Valkyrie’s SMA product, stated that Sun’s SMA was an institutional-type product that differed from the retail offerings. Having one whale in an SMA doesn’t necessarily pose a threat to clients with money in other products, but it could become problematic for the asset manager’s fee revenue – and its ability to pay staff – if that client ever decided to leave.

Sun has clearly been a vocal backer of Valkyrie, joining the firm’s mid-2021 equity round and calling Valkyrie a “strategic partner” when Tron launched its Tron Trust three months later. Sun also stated that Valkyrie was the Tron ecosystem’s access route to U.S. investors, and the firm was planning to list its Tron trust on over-the-counter markets and create a Tron ETF. However, neither of these have come to pass yet.

Valkyrie has also toyed with creating trusts for BitTorrent tokens, though this hasn’t come to fruition yet. Valkyrie CEO and founder Leah Wald has also taken a board position at crypto exchange Huobi, which Sun reportedly acquired, and Sun is a board member of the exchange.

The relationship between Sun and Valkyrie is yet another example of centralization in the crypto industry, which is rife with whales carrying outsize clout, in spite of its decentralized ideals. Whilst Sun’s investments in Valkyrie have been beneficial to the firm, it raises questions about the asset manager’s reliance on a single client for growth.