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A large-scale fraud in the cryptocurrency OTC (over-the-counter) market has just been exposed on the social media platform X (formerly Twitter) by the Altcoin Alpha account. The incident has seriously impacted many Venture Capital funds, cryptocurrency KOLs, and major investors.
According to initial investigations, the total estimated damage is over 50 million USD, with famous tokens such as SUI, NEAR, Axelar, SEI, Aptos, Graph, SWELL… being used as bait.
Sophisticated Fraud Model Disguised as High-End OTC Transactions
The incident began with attractive investment invitations shared in Telegram groups, typically by Venture Capital funds (VC) or individual investors in closed circles. Those behind the scheme impersonated "Tier-1 OTC deals" – special private investment transactions – to build trust within the community.
Hot tokens like Aptos, SEI, Graph, SWELL… were advertised with discounts up to 50%, accompanied by vesting lock commitments for 4-5 months. In the initial stage, transactions were carried out smoothly and on time, making many investors feel confident and start "investing" with larger amounts.
As trust was built, the number of OTC transactions in Telegram groups continued to increase strongly, accompanied by invitations to own tokens from top projects at rarely seen low prices.
Ignored Warning and Comprehensive Collapse in June 2025
Despite numerous suspicious signs appearing since early 2025, the community continued to pour money into these transactions. One of the most notable warnings came from Eman Abio – a SUI development team member, who spoke out on social media X saying: "There are no deals happening at all!". Similarly, Lucian Mincu from the MultiversX project also publicly issued a warning.
However, most investors ignored these warnings. On June 1, 2025, the final transaction involving the Fluid token was introduced, after which all token distributions from previous deals suddenly stalled. Reasons given for delays included "delayed KYC", "personal movement issues", or "exchange complications".
On June 19, Aza Ventures – one of the large VC funds that participated in many of these OTC deals – unexpectedly announced that they had also become victims. According to Aza's disclosure, the main mastermind – called "Source 1" – had used a Ponzi scheme to defraud, using money from new investors to pay earlier investors.
The situation became more serious when Aza revealed that other sources like "Source 2" and "Source 3" also obtained goods from "Source 1", causing the entire system to quickly collapse.
Perpetrator's Identity: Indian, Former Founder of a Project Listed on Binance
According to Aza Ventures, "Source 1" is an Indian-origin individual, currently the founder of a project previously listed on Binance. Aza stated they are in the process of negotiating to recover the stolen funds, with a deadline at the end of June 2025.
This person was identified as Ravindra Kumar. In his most recent response, Ravindra denied all accusations, simultaneously stating he would soon issue an official announcement. Nevertheless, Aza Ventures still affirms he operated the Ponzi scheme and has transferred a total of 24.5 million USD through wallets currently linked to Binance. To date, Aza is left with only about 100,000 USD, hoping to use profits from new token launches to reimburse investors.
Crypto Community Outraged, ZachXBT Criticizes Lack of Verification
Famous blockchain investigator ZachXBT criticized the victims' lack of caution, as they easily trusted an "unknown Tier 9 fund" without any reputation or transparent connections. He also emphasized that many clear warnings had come from teams like SUI and MultiversX, but most investors ignored them.
Warning Lesson for the Community: Be Careful with OTC Transactions on Telegram
This fraud is once again a warning bell about risks involved in uncontrolled OTC transactions on platforms like Telegram. Despite suspicious signs and public warnings, FOMO (fear of missing out) and social effects caused many to fall into the trap.
The cryptocurrency community is now waiting for further developments in the case, as well as the possibility of recovering lost assets.
