Unveiling the Large-scale Crypto Assets OTC Eyewash: Losses Exceed 50 Million USD

A large-scale over-the-counter trading involving multiple well-known coins ( OTC ) crypto assets eyewash has recently been exposed, with victim coins covering dozens of types including SUI, NEAR, Axelar, SEI, and more. Shockingly, this eyewash has defrauded investors of over 50 million dollars within a few months, yet it has hardly sparked widespread discussion.

The list of victims includes venture capitalists, opinion leaders, and heavyweight Crypto Assets investors. Here are the detailed steps of this eyewash:

Phase 1: Establishing Trust (November 2024 - January 2025)

Starting from November 2024, multiple venture capital groups and private investment pools will launch seemingly legitimate high-end OTC trades in Telegram groups. These trades promise to sell tokens of well-known projects at a 50% discount from market prices, such as Graph (GRT), Aptos (APT), SEI, SWELL, etc., and set a lock-up period of 4-5 months.

This is the bait stage of the eyewash. Initial transactions are fulfilled as promised, and investors receive tokens as agreed. The superficial legitimacy quickly establishes trust. Early success stories and smooth operations attract more and more investors, who even increase their investment amounts.

Phase Two: Expand the eyewash scale (February 2025 - June 2025)

In February 2025, the coverage of OTC trading rapidly expanded. A new wave of trading surged into Telegram groups, with larger scales and a wider range of tokens, including SUI, NEAR, GRASS, Axelar, and more. The trading structure remained unchanged: significant discounts and fixed lock-up periods. These enticing conditions further attracted more investors, enhancing the credibility of the eyewash and making its expansion unstoppable.

Phase Three: Ignoring Warnings (May 2025)

In May 2025, the eyewash began to show vulnerabilities. Industry leaders issued public warnings one after another. Eman Abio from the SUI team reminded users to be wary of false Telegram OTC transactions on social media, clearly stating: "There is no such transaction at all!" Similarly, Lucian Mincu from MultiversX also issued a similar warning.

However, despite these warnings, the community continues to ignore the danger signals. Attracted by past investment returns, success stories, and seemingly credible group participation, investors keep pouring into new trades.

Phase Four: Eyewash Exposure and Collapse (June 2025)

The turning point occurred on June 1. The last known transaction was launched, involving Fluid tokens. Meanwhile, the distribution of tokens from early OTC trades suddenly stopped. Investors seeking updates were only given vague excuses, such as travel delays, exchange issues, and verification problems.

On June 19, the venture capital group Aza Ventures, which led these transactions, publicly announced that they had also become victims of an eyewash. Aza Ventures accused their main trader "Source 1" of operating a Ponzi scheme. According to Aza, the early trades were legitimate, but the later trades completely relied on the funds from new investors to fulfill previous commitments - this is the typical Ponzi scheme model.

Worse still, Aza Ventures further disclosed that their other deal sources "Source 2" and "Source 3" were actually also obtaining deals through "Source 1." The situation quickly deteriorated and became extremely chaotic.

List of Involved Tokens

Early Trading (November 2024 - January 2025): Aptos, Sei, Swell, Coti, Kava, Fluid, OG, Aethir

Later Trading (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.

Identity of the mastermind: Who is "Source 1"?

Aza Ventures claims to have knowledge of the identity of "Source 1". According to insiders, "Source 1" is suspected to be of Indian nationality and is reportedly the founder of a current listing project on a trading platform. However, Aza Ventures has chosen not to disclose their identity publicly, but instead is pressuring them privately to return the stolen funds.

Losses and Impacts

The total loss amount of this eyewash is expected to exceed 50 million USD. Reports indicate that many investors invested more than 1 million USD in a single transaction. Victims include individual retail investors, large investors in the Crypto Assets sector, project teams, and venture capital institutions. Some victims have experienced life-changing financial losses, and there are even reports of some individuals experiencing severe emotional breakdowns due to this incident.

Follow-up Actions

Aza Ventures claims that they are actively negotiating with "Source 1" to try to recover funds and have set the end of the month as the deadline. Meanwhile, the broader Crypto Assets community is working to trace relevant wallet addresses, identify accomplices, and gather more evidence to bring the responsible parties to justice.

This incident has sounded the alarm for the Crypto Assets industry, reminding people of the immense risks they face when engaging in unregulated over-the-counter trading through informal channels. Despite early warning signs and public alerts, trust, greed, and the so-called social "proof" have become powerful weapons in the hands of scammers.

Currently, the entire community is holding its breath, hoping that justice can be served and that the victims can ultimately receive refunds.