Crypto investigator ZachXBT criticized the sponsorship vetting process of Token2049, warning that platinum sponsorship does not equate to legitimacy. Several sponsors he pointed out were later found to have suspicious records.
JPEX and HyperVerse used event sponsorships to enhance their credibility. Both later collapsed in fraud investigations, leading to billions in losses for investors and resulting in arrests.
Warning signs include anonymous teams, low liquidity, overly hyped marketing, poor token economics, and listings only on unknown exchanges.
The driving force behind these tokens is not innovation, but speculation, influencer hype, and cult-like followings, highlighting how unpredictability drives their survival.
In the unpredictable cryptocurrency market, certain digital assets continue to exist despite controversies, significant price drops, or lack of substantial intrinsic value. Despite being labeled as suspicious tokens, they still attract loyal followers. This ongoing engagement is often driven by speculative excitement, strong community support, and the allure of quick profits.
Renowned crypto detective ZachXBT shared his views on some sponsors of Token2049, a significant crypto event, through his Telegram channel. He believes that the organizers of such events conduct little due diligence on their sponsors, and becoming a platinum sponsor does not increase credibility. He continues to post information about suspicious sponsors of Token2049 on his channel.
This article explores why some tokens, despite being suspicious, exhibit remarkable persistence. It discusses five dubious tokens that continue to attract crypto investors and investigates the reasons for their longevity. It will also explain how novice traders can protect themselves from such projects.
Despite weak fundamentals, many suspicious cryptocurrencies still exist in the market. While most fail quickly, certain tokens manage to survive or briefly thrive due to specific factors. These factors include:
Speculative trading: Dramatic price fluctuations attract risk-tolerant traders seeking quick profits.
Loyal community: Dedicated supporters, often driven by memes or nostalgia, help these projects survive.
Low market liquidity: Limited trading activity allows large investors or insiders to influence prices, attracting speculators.
Cyclical hype: Social media trends, influencer endorsements, or unexpected news can temporarily boost interest in these tokens.
Did you know? From "guaranteed thousandfold returns" to "satellite-enabled DeFi," scam projects often use flashy narratives to attract traders. If the promotional slogans are bold and lack evidence, such cryptocurrencies are likely very risky.
ZachXBT discussed some sponsors of TOKEN2049 that, despite their opaque operations, still exist in the unpredictable crypto market. He mentioned the following tokens as suspicious:
Origin: Spacecoin, launched by Gluwa in 2024-2025, is a named sponsor of "Token2049," aiming to create the world's first decentralized physical infrastructure network (DePIN) powered by satellites. The project claims its decentralized satellite network will provide global 5G coverage to the 2.9 billion people currently without internet access.
Controversy: On-chain investigator ZachXBT labeled Spacecoin as "robotic" and unreliable, questioning its legitimacy. While "robotic" can have various interpretations, none are positive.
Why suspicious: There are concerns surrounding Spacecoin. For instance, in June 2022, it claimed to have undergone months of improvements and smart contract audits but did not mention specific auditing firms or provide public reports. Additionally, there are no verifiable documents regarding satellite launches.
What supports it: Strong promotional campaigns, event sponsorships, and speculative interest, combined with a loyal community and media attention, sustain limited trading activity.
Origin: JuCoin, formerly Jubi, is a cryptocurrency exchange established in Singapore in 2013, with its JU token and CeDeFi services set to expand its ecosystem in 2025.
Controversy: ZachXBT marked JuCoin as a "suspicious" platinum sponsor of Token2049, pointing out its history of ownership changes, rebranding, and regulatory shifts.
Suspicious reasons: JuCoin lacks regulation in major markets, although it has applied for a license in Taiwan. The project is not regulated in the U.S., EU, or other major markets with strict regulatory standards, except for Singapore's Financial Management Authority.
Sustained momentum: Speculation around the token and aggressive marketing drive trading activity.
Origin: Weex is a cryptocurrency futures platform registered in Singapore, operating since 2018, offering anonymous trading and bonus incentives.
Controversy: Weex is not regulated by any financial regulatory body with strict standards.
Suspicious reasons: Users on social media have complained about irregularities at the exchange, including frozen accounts and KYC issues.
Sustained momentum: The appeal of futures trading and speculative interest in high-yield opportunities maintain trading volume, while active promotional activities continue to drive its growth.
Origin: As a platinum sponsor of Token2049, DWF is a dubious market maker that, according to ZachXBT, trades on over 60 exchanges and engages in high-profile investments. There is little public information about its background or team.
Controversy: It may have been listed by ZachXBT due to previous accusations of wash trading as a market maker and recent allegations of "rug pulling" by Vite Labs.
Suspicious reasons: On March 27, 2025, Vite Labs stated that its development funds were "rug pulled" by DWF's market-making services, and Binance decided to delist the project.
Sustained momentum: The visibility from conference sponsorship, promotional narratives, and speculative hype surrounding the project's launch drive limited trading interest.
Origin: Founded around 2021, Butunix is a cryptocurrency exchange registered in Saint Vincent and the Grenadines. It offers spot and futures trading.
Controversy: Marked as "suspicious" by ZachXBT, possibly due to attracting the attention of the Korean Financial Intelligence Unit (FIU), part of the Financial Services Commission (FSC), for providing services to Korean customers without registration.
Suspicious reasons: Limited regulatory oversight and unclear company structure undermine trust.
Sustained momentum: Trading volume is driven by listing obscure altcoins, bonus incentives, and speculative traders seeking quick profits.
Did you know? Companies like CertiK or Hacken audit legitimate smart contracts. Many suspicious tokens claim to conduct "internal audits" or skip audits entirely, exposing users to vulnerabilities or attacks.
Here are two cases of suspicious crypto projects becoming well-known event sponsors, using the credibility gained to deceive investors:
At the Token2049 conference in Singapore in mid-September 2023, JPEX became a platinum sponsor for $70,000, shaping a compliant image. However, after warnings from Hong Kong regulators, JPEX withdrew its booth and disappeared the day after the event.
Subsequently, the exchange suspended withdrawals, charging fees of up to 999 USDT for each withdrawal of 1,000 USDT. The platform also received thousands of complaints of fraud and unlicensed operations. Law enforcement arrested several individuals involved and froze assets. It is estimated that investors lost over 1 billion HKD.
HyperVerse hosted a lavish promotional event, including a $3,500-per-person party on a $40 million Seafair super yacht in Florida, inviting rapper Rick Ross to showcase itself as a prestigious crypto and metaverse platform. It claimed to be developing a "perfect virtual world" and promised daily returns to attract global investors.
However, U.S. regulators later revealed that HyperVerse was a Ponzi scheme, defrauding investors of approximately $1.89 billion. Key promoters, including Steven Lewis and Brenda Chunga, were charged by the U.S. Securities and Exchange Commission for running a fraudulent pyramid scheme.
Did you know? Some suspicious tokens use bots to create fake trading volumes, deceiving platforms into raising their rankings. Research is essential before investing.
For novice cryptocurrency traders, early identification of suspicious tokens can prevent financial losses and stress. Here are key factors to consider when evaluating cryptocurrencies:
Research the team and project history: Look for warning signs such as anonymous founders, frequent rebranding, or lack of well-known partnerships.
Evaluate marketing strategies: Be wary of tokens promoted through aggressive marketing, including meme-driven social media, paid influencer endorsements, or unrealistic "guaranteed 100x returns" claims.
Assess liquidity: Tokens with low trading volumes or concentrated ownership are susceptible to price manipulation by insiders.
Examine token economics: Be cautious of tokens with excessively large total supplies, unclear burn mechanisms, or distributions heavily favoring insiders, as these may indicate risks of price manipulation or fraud.
Verify exchange listings: Tokens listed only on unknown or poorly regulated exchanges may lack transparency.
Investigate historical issues: Research any historical problems, such as withdrawal suspensions, scams, or regulatory warnings.
Use reliable tools and maintain asset diversification: Avoid relying solely on influencers or trend charts. Instead, use on-chain analysis tools to monitor wallet activity and limit risks through diversified investments.
Suspicious tokens are often seen as warning signs of market risk rather than worthy investment targets. Investors should be wary of the allure of high returns, as these tokens often face issues such as price manipulation, opaque team backgrounds, and weak fundamentals. Even amid frequent significant fluctuations or controversies in the market, such tokens remain common, primarily due to the inherent unpredictability and community-driven nature of the crypto market.
Related: A bull market needs a bigger bubble; what stage are we currently in this cycle?
Original article: “Big Stage, Big Scam? 5 Eye-Catching Crypto Projects”
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