Author: darwizzynft
Compiled by: Deep Tide TechFlow
A recent exposure revealed an OTC cryptocurrency scam involving multiple well-known tokens, including SUI, NEAR, Axelar, SEI, and dozens more, yet shockingly, almost no one is discussing it!
It is estimated that the scam defrauded investors of over $50 million within months and was only widely known recently.
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 @AltcoinAlphaOnX's in-depth research.
Phase One: Building Trust (November 2024 – January 2025)
Starting in November 2024, various venture capital groups and private investment pools began launching seemingly legitimate top OTC transactions in Telegram groups.
These transactions claimed to sell tokens of high-profile projects, such as Graph (GRT), Aptos (APT), SEI, SWELL, etc., at discounts of up to 50% off the market price and promised 4-5 months of lock-up periods.
Source: @AltcoinAlphaOnX
This is the bait stage of the scam.
Initial transactions were fulfilled on time, and investors received 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 Two: Scaling the Scam (February 2025 – June 2025)
By February 2025, the coverage of OTC transactions rapidly expanded.
A new wave of transactions flooded into Telegram groups, with larger scales and broader token ranges, including SUI, NEAR, GRASS, Axelar, etc.
The transaction structure remained unchanged: significant discounts and fixed lock-up periods.
These enticing conditions further attracted more investors, reinforcing the scam's credibility and allowing the scam to expand rapidly.
Source: @AltcoinAlphaOnX
Phase Three: Ignoring Warnings (May 2025)
By May 2025, the scam began to show cracks.
Industry leaders issued public warnings.
Eman Abio from the SUI team reminded users on the X platform to be wary of fake Telegram OTC transactions, stating clearly: 'There is no such transaction!'
Similarly, Lucian Mincu from MultiversX (formerly Elrond) also issued a similar warning.
Source: @AltcoinAlphaOnX
However, despite these warnings, the community remained blind to the danger signals.
Attracted by past investment returns, success stories, and seemingly credible group participation, investors continued to flock to new transactions.
Phase Four: Scam Exposure and Collapse (June 2025)
The turning point occurred on June 1.
The last known transaction has been launched, involving Fluid tokens.
Meanwhile, the token distribution from early OTC transactions 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 led these transactions, publicly announced that they themselves had also become victims of the scam.
Aza Ventures accused its primary trader 'Source 1' of operating a Ponzi scheme. According to Aza, early transactions were legitimate, but later transactions relied entirely on funds from new investors to fulfill previous commitments—this is the typical Ponzi scheme pattern.
Source: @AltcoinAlphaOnX
Worse, Aza Ventures further disclosed that their other trading sources 'Source 2' and 'Source 3' were actually obtaining trades through 'Source 1'.
The situation deteriorated rapidly, becoming extremely chaotic.
List of Involved Tokens
Early Transactions (November 2024 – January 2025)
Aptos, Sei, Swell, Coti, Kava, Fluid, OG, Aethir
Later Transactions (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 allegedly the founder of a project currently listed on Binance. However, Aza Ventures chose not to publicly disclose their identity but instead privately pressured them to return the stolen funds.
@AltcoinAlphaOnX has released more updates on the identity of 'Source 1' on the X platform.
This scam not only reveals the potential risks in the crypto industry but also reminds investors to remain vigilant when faced with deals that seem too good to be true.
Losses and Impact
The total loss from this scam is estimated to exceed $50 million.
Reportedly, many investors have 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, with reports of some experiencing severe emotional breakdowns due to the incident.
Source: @AltcoinAlphaOnX
Next Steps
Aza Ventures claims that they are actively negotiating with 'Source 1' to recover funds and have set the end of the month as a deadline. Meanwhile, the broader crypto community is working to track relevant wallet addresses, identify accomplices, and gather more evidence to bring the responsible parties to justice.
Source: @AltcoinAlphaOnX
This incident sounded the alarm for the crypto industry, reminding people of the enormous risks associated with unregulated OTC transactions in informal channels (such as Telegram, Discord, etc.).
Despite early warning signs and public alerts, trust, greed, and the so-called social 'proof' became powerful weapons in the hands of the scammer.
Currently, the entire community is holding its breath, hoping that justice can be served and that victims will eventually receive refunds.
