Author | darwizzynft
Compiled | Deep Tide TechFlow
A recently exposed OTC cryptocurrency scam involving various well-known tokens, including SUI, NEAR, Axelar, SEI, and dozens more, has shocked many, yet hardly anyone is discussing it!
It is estimated that this scam defrauded investors of over $50 million within a few months, and it was only recently that it became widely known.
The list of victims even includes venture capitalists (VCs), key opinion leaders (KOLs), and heavyweight crypto whales. Below is a detailed account of this scam, thanks to the in-depth research by @AltcoinAlphaOnX.
Phase One: Building Trust (November 2024 - January 2025)
Starting from 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 4-5 month lock-up period.
This is the bait stage of the scam.
Initial trades were fulfilled on time, and investors received tokens as promised. This apparent legitimacy quickly established 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 trades rapidly expanded.
A new wave of transactions flooded into Telegram groups, larger in scale and wider in token range, including SUI, NEAR, GRASS, Axelar, etc.
The trading structure remains unchanged: significant discounts with fixed lock-up periods.
These enticing conditions further attracted more investors, reinforcing the scam's credibility and allowing it to expand rapidly.
Phase Three: Ignoring Warnings (May 2025)
By May 2025, cracks began to appear in the scam.
Industry leaders are issuing public warnings.
Eman Abio from the SUI team reminded users on the X platform to beware of fake Telegram OTC trades, stating clearly: 'There are no such trades!'
Similarly, Lucian Mincu of MultiversX (formerly Elrond) has issued similar warnings.
However, despite these warnings, the community remained blind to the danger signals.
Attracted by past returns, success stories, and seemingly credible group participation, investors continued to flock to new trades.
Phase Four: Scam Exposure and Collapse (June 2025)
The turning point came on June 1.
The last known trade was launched, involving Fluid tokens.
Meanwhile, the token distribution for early OTC trades suddenly stopped.
Investors seeking updates could only get 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 trades, publicly announced that they too had become victims of the scam.
Aza Ventures accuses its main trader 'Source 1' of operating a Ponzi scheme. According to Aza, early trades were legitimate, but later trades relied entirely on funds from new investors to fulfill previous promises—this is the typical Ponzi scheme model.
Worse, Aza Ventures further revealed that their other trading sources 'Source 2' and 'Source 3' were actually also obtaining trades through 'Source 1'.
The situation rapidly deteriorated, becoming extremely chaotic.
List of tokens involved
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.
Mastermind identity: Who is 'Source 1'?
Aza Ventures claims to have identified 'Source 1'.
Insiders suggest that 'Source 1' is likely 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 published more updates regarding the identity of 'Source 1' on X platform.
This scam not only reveals the potential risks of the crypto industry but also serves as a reminder for investors to remain vigilant when faced with too-good-to-be-true deals.
Losses and Impact
The total loss from this scam is estimated to exceed $50 million.
Reports indicate that many investors put in over $1 million in a single investment.
Victims include individual retail investors, large whales in the crypto space, project teams, and venture capital firms (VCs).
Some victims have faced life-changing financial losses, with reports of individuals experiencing severe emotional breakdowns due to the incident.
Next Steps
Aza Ventures claims that they are in active talks 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 trace the relevant wallet addresses, identify accomplices, and dig up more evidence to bring the responsible parties to justice.
This incident has sounded an alarm for the crypto industry, reminding people of the enormous risks faced when engaging in unregulated OTC trades 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 the scammers.
Currently, the entire community is holding its breath, hoping that justice can be served and that victims can eventually get refunds.
