In brief Justin Sun's takeover of Steemit is meeting major resistance.

Exchanges Binance and Huobi, which originally voted in favor of Sun, have withdrawn their votes.

The community has since regained control of the network, and is preventing Sun from migrating it to Tron.

A civil war between the users of Steemit and Tron founder Justin Sun is threatening to destroy the popular social network, long prized as a decentralized alternative to Reddit.

The battle escalated yesterday when accounts run by crypto exchanges Huobi, Binance, and Poloniex used their voting power—acquired by pledging their customers’ money—to give Sun control over Steem, the blockchain that houses Steemit.

But in a series of setbacks for Sun today, Huobi and Binance said they were withdrawing their support for him. Later, the community reelected enough of its members to prevent Sun from restoring exchanges’ control over their Steem tokens. That had bad repercussions for some customers, who are reporting that they can no longer withdraw the native token from exchanges.

And compounding all the chaos, Steemit’s development team quit en masse today, meaning that Sun’s new team must figure things out for themselves—or buy back control.

Just another day in the life of the always exciting Justin Sun.

The Steemit Wars

Today’s operatic events began with Sun launching a massive tweetstorm that attempted to explain his version of recent events. Sun said his attempt to seize control of Steemit was designed to protect the site, which he claimed was being subverted by “malicious hackers.”

“Misleading comments re us collaborating w/ exchanges on a hostile takeover is false,” he tweeted. “Our intention was never to take over the network & all parties' votes will be withdrawn. We wanted to protect the sanctity of private property & the interests of all from malicious hackers.”

He added: “The risk of nullifying the #STEEM network puts every STEEM holders’ interest in danger.”

Sun bought Steemit.com last month, which is essentially a decentralized version of Reddit that runs on the Steem blockchain. The new site adds to his decentralized media empire, which currently comprises live-streaming site DLive (which also used to run on the Steem blockchain) and Bittorrent. Sun’s plan is to move Steemit onto his own blockchain network, TRON.

With the purchase, Sun also acquired 65 million of the Steem native token (valued at around $12 million). The tokens had been pre-mined before the launch of the network, and belonged to Steemit’s former owner, Ned Scott.

Sun had hoped to use the coins to control the blockchain and the site, and migrate it all to the TRON blockchain.

But in retaliation, nine days ago, the Steemit community voted in favor of a soft fork on the blockchain, which would block Sun from using the tokens until he laid out his plans for the future of the network. (They also discussed destroying those tokens, since there was a chance that the Sun could use them to ruin the network.)

By enlisting the aid of the exchanges yesterday, Sun had hoped to do an end run around the soft forkers. However, today, two of the biggest exchanges, Binance and Huobi, said they wanted no part of the battle, and indicated they would withdraw their support for Sun.

Binance has “no interest in chain governance. We stay neutral,” tweeted Binance CEO Changpeng Zhao.

In a statement today, Huobi said that it had originally supported Sun, thinking it “was in the best interest of our users — and the network at large.” But, given the community backlash, it too withdrew its support.

Poloniex has not issued a statement on the matter.

The Steemit standoff

Now deadlocked, and unable to control his new site, Sun must face the dissidents at a virtual “town hall” meeting Friday. It will likely be a hostile mob.

“Justin just ruined a whole community and a place where many new crypto enthusiasts first start... and now he calls witnesses elected by OUR own stake in a normal DPoS hackers,” tweeted one community member, Teutonium.

“[Sun] single handedly took over the blockchain and installed fake witnesses. That kind of unity is called dictatorship and totalitarianism and utmost centralization where I come from,” tweeted another member, Ervin Lemark.

Some support for Sun

In Sun’s defense, Steemit’s platform wasn’t in great shape, some say. “As far as plutocracies go, it's been an infamous example of why DPOS leads to centralized power in the hands of a wealthy and early adopted minority,” Steemit contributor Alexander Klein told Decrypt. “When I go on it's very difficult to find original content independently on the platform that is worthwhile, and the bot voting is crazy,” he added.

Joshua Bouw, an early user of Steemit, told Decrypt that Steem tokens were held back by people who got rich in the early days of the platform. He said they held onto their Steem tokens and used them to keep control of the platform—to the site’s detriment. “Eventually they all got together and were having people pay them for votes,” he said, suggesting that the community was rotten to the core.

Likewise, people in a pro-TRON Telegram group defend Sun’s position: “The witnesses, acting like a mafia, did a soft fork to take the whole network and block accounts without any reason,” wrote a pseudonymous “Piter”.

He considers Sun’s actions democratic. “The problem here is that old witnesses think that the network belongs to them because they [have been part of] Steem since [the] beginning, and that's not true. The network belong[s] to the holders. More stake=more power to decide, that's how everything works in real life,” he wrote.

Whether pro-Tron or pro-Steemit, the debacle raises questions about the authority exchanges have to influence blockchain networks, and what countermeasures, if any, ought to be implemented in the future.

“It’s nothing new for a team that claims authority over a project to ask an exchange to fork with a minority of support,” said Bouw. But “this is the first real example of the flaws of the position that exchanges took,” he said.

At Friday’s town hall, that debate will be played out in full.