Despite early warning signs and public alerts, trust, greed, and so-called social "proof" became powerful weapons in the hands of scammers.
Author: darwizzynft
Translation: Deep Tide TechFlow
A recent exposure of an over-the-counter (OTC) cryptocurrency scam involving various well-known tokens has come to light, with victim tokens including dozens such as SUI, NEAR, Axelar, SEI, and shockingly, almost no one is discussing this matter!
It is estimated that this scam defrauded investors of over $50 million within a few months, and it was only recently widely recognized.
The list of victims even includes venture capitalists (VCs), key opinion leaders (KOLs), and heavyweight crypto whales. Here is a detailed account of the scam, thanks to the in-depth research by @AltcoinAlphaOnX.
### Phase 1: Building Trust (November 2024 – January 2025)
Starting in November 2024, various venture capital groups and private investment pools began launching seemingly legitimate top OTC trades in Telegram groups.
These trades claimed to sell tokens of high-profile projects, such as Graph (GRT), Aptos (APT), SEI, SWELL, etc., at discounts of up to 50% off market prices, promising a lock-up period of 4-5 months.
Source: @AltcoinAlphaOnX
This was the bait phase of the scam.
Initial trades were fulfilled on time, and investors received their tokens as promised. This apparent legitimacy quickly built trust.
Early success stories and smooth operations attracted more and more investors, who even increased their investment amounts.
### Phase 2: Expanding the Scam (February 2025 – June 2025)
By February 2025, the coverage of OTC trades rapidly expanded.
A new wave of trades flooded into Telegram groups, larger in scale and broader in token range, including SUI, NEAR, GRASS, Axelar, etc.
The trading structure remained unchanged: significant discounts and fixed lock-up periods.
These enticing conditions further attracted more investors, reinforcing the credibility of the scam and allowing its expansion to gain momentum.
Source: @AltcoinAlphaOnX
### Phase 3: Ignoring Warnings (May 2025)
By May 2025, the scam began to show cracks.
Industry leaders issued public warnings.
Eman Abio from the SUI team warned users on the X platform to beware of fake Telegram OTC trades, clearly stating, "There are no such trades!"
Similarly, Lucian Mincu from MultiversX (formerly Elrond) issued a similar warning.
Source: @AltcoinAlphaOnX
However, despite these warnings, the community continued to ignore the danger signals.
Attracted by past investment returns, success stories, and seemingly credible group participation, investors continued to flock to new trades.
### Phase 4: Scam Exposure and Collapse (June 2025)
The turning point came on June 1.
The last known trade was launched, involving Fluid tokens.
At the same time, the distribution of tokens from early OTC trades suddenly stopped.
Investors seeking updates could only receive vague excuses, such as travel delays, exchange issues, and KYC (Know Your Customer) problems.
On June 19, the venture capital group Aza Ventures, which dominated these trades, publicly announced that they too had become victims of the scam.
Aza Ventures accused their main trader "Source 1" of operating a Ponzi scheme. According to Aza, the early trades were legitimate, but later trades relied entirely on funds from new investors to fulfill previous commitments—this is the typical Ponzi scheme model.
Source: @AltcoinAlphaOnX
Worse still, Aza Ventures further disclosed that their other trading sources "Source 2" and "Source 3" were actually also obtaining trades through "Source 1."
The situation rapidly deteriorated and became extremely chaotic.
### List of Involved Tokens
Early Trades (November 2024 – January 2025)
Aptos, Sei, Swell, Coti, Kava, Fluid, OG, Aethir
Later Trades (February 2025 – June 1, 2025)
SUI, NEAR, Aptos, Sei, Highstreet, Altlayer, Kava, Grass, Movement, Bio, Sandbox, Graph, Ronin, Axelar, Celestia, LayerZero, Renzo, Beam, Conflux, Wormhole, Arkham, Adventure Gold, Immutable, Vana, Berachain, Virtuals, EGLD, Fluid, etc.
### Who is the Mastermind: "Source 1"?
Aza Ventures claims to have identified "Source 1."
According to insiders, "Source 1" is suspected to be of Indian nationality and is reportedly the founder of a project currently listed on Binance. However, Aza Ventures has chosen not to disclose their identity publicly but is privately pressuring them to return the stolen funds.
@AltcoinAlphaOnX has posted more updates regarding the identity of "Source 1" on the X platform.
This scam not only reveals the potential risks in the crypto industry but also serves as a reminder for investors to remain vigilant when faced with deals that seem too good to be true.
### Losses and Impact
The total estimated loss from this scam exceeds $50 million.
Reports indicate that many investors invested over $1 million in a single transaction.
Victims include individual retail investors, large whales in the crypto space, project teams, and venture capital firms (VCs).
Some victims have suffered life-changing financial losses, and there are even reports of individuals experiencing severe emotional breakdowns due to this incident.
Source: @AltcoinAlphaOnX
### Next Steps
Aza Ventures claims they are actively negotiating with "Source 1" to try to recover the funds and have set the end of the month as a deadline. Meanwhile, the broader crypto community is working to track related wallet addresses, identify accomplices, and gather more evidence to bring the responsible parties to justice.
Source: @AltcoinAlphaOnX
This incident serves as a wake-up call for the crypto industry, reminding people of the enormous risks involved in unregulated over-the-counter (OTC) trading through informal channels (such as Telegram, Discord, etc.).
Despite early warning signs and public alerts, trust, greed, and so-called social "proof" became powerful weapons in the hands of scammers.
Currently, the entire community is holding its breath, hoping for justice to be served and for victims to ultimately receive refunds.
Disclaimer: The information provided in this article is for reference and educational purposes only and does not constitute any investment advice.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
