One of the year’s most elaborate and sorrowful crypto scams has come to light: an enormous OTC (over-the-counter) fraud involving top-tier tokens like SUI, Near, Axelar, and others.
The intricate scheme, which appears to have drained in excess of $50 million from a range of investors—whales, influencers, and even some venture capitalists among them—has left the crypto community in stunned silence.
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From Trust to Trap: The Rise and Fall of “Too-Good-To-Be-True” OTC Deals
In November 2024, the private Telegram channels and venture capital networks started to circulate over-the-counter deals that were deeply discounted. Investors were offered tokens that everyone wanted, like Aptos and Sei, Graph, Swell, and others.
These were not the investment opportunities you tell your friends about at a barbecue, because these tokens were only made available at prices that were 50% below the market rate. And even at those prices, they were announced with the caveat that you should expect these tokens to perform like most things have performed in this market: poorly.
It is remarkable how these deals paid off. When the time came for the tokens to be delivered, they found their way into the investors’ wallets, and when they did, something else happened: real returns were seen. And with these real returns came trust. Trust is a big deal in an industry where so much seems to happen behind closed doors. Without trust, people do not put their money in. With trust, it’s like the floodgates open.
In late February 2025, the operation ramped up significantly. Larger transactions, involving Tier-1 tokens like NEAR, Axelar, SUI, and Grass, started to pour into our private channels. The deals were still pitched as steeply discounted and safely vested, but now we were talking about real volumes and serious dollar amounts. To a lot of us, it felt like we were on the verge of something big, and that this was going to be the last opportunity we had to pre-sell the pre-sold, institutionally-grade tokens.
Ignored Red Flags and the Silent Collapse
By May 2025, the warning signs were flashing. On May 25, Eman Abio, a member of the SUI team, posted a public statement on X, urging users to avoid fraudulent OTC offers. Abio stated bluntly: “There is NO deal.” Shortly thereafter, a similar warning was issued by Lucian Mincu, co-founder of Elrond Network (EGLD). Despite the public service announcements, the scams continued with no apparent slowdown, and our Telegram groups remained filled with messages hawking “exclusive” offers.
🥵 $𝟓𝟎𝐌 𝐂𝐫𝐲𝐩𝐭𝐨 𝐎𝐓𝐂 𝐒𝐜𝐚𝐦 𝐄𝐱𝐩𝐨𝐬𝐞𝐝.
🧵A massive OTC Scam involving SUI, Near, Axelar, Sei, and more just got exposed but no TG Channel or CT is talking about it. Jaw-dropping details! 👇$GRASS $APT $ZRO $BEAM $IMX $BERA pic.twitter.com/aQS08poZvc
— Altcoin Alpha (@AltcoinAlphaOnX) June 20, 2025
The situation developed completely on June 1, 2025. Distributions that were supposed to be sent for earlier deals just stopped. Investors, who were now growing really anxious, were met with half-hearted excuses that were deliberately made to sound like they were reasonable and posed no threat to the company: “The source is traveling (you know how busy and important these people are!),” “There are exchange delays (we’re not really supposed to be telling you all this, but you know how these things go!),” “KYC verification is still pending with the project (as is the case for almost all projects waiting to go live!).” Of course, this only made investors even more suspicious and
OTC Fluid was the last offering made on June 1. By mid-June, an alarming trend was unmistakable.
On June 19, a stunning admission came from Aza Ventures, one of the most active VC groups pushing these OTC opportunities: they had been scammed. The brain behind the op, known inside the firm as “Source 1,” had apparently been running a Ponzi-style scheme. Earlier deals were paid for by buying tokens on the open market, with money raised from subsequent OTC deals, keeping the whole thing looking legit.
This deceptive cycle went on until June when Source 1 entirely stopped delivering tokens. More findings showed that Aza’s other contacts, called “Source 2” and “Source 3,” had also been dealing with the same fraudulent operator.
Who Is Source 1—and What Happens Next?
Though Aza Ventures claims to know the identity of the man behind the scam, he remains officially unnamed. Insider reports suggest that “Source 1” is an Indian national and the founder of a project listed on Binance. However, Aza has chosen, for now, not to dox him, and instead hopes to use pressure and negotiation to recover investor funds.
The fallout has been disastrous. An estimated $50 million has disappeared, with many venture capitalists, crypto whales, influencers, and project team members supposedly losing $1 million or more each. Some retail investors who believed in the scheme and put their life savings into it are now financially ruined and experiencing the worst kind of emotional distress. Reports of mental health crises and suicidal ideation are now surfacing from the once-buzzing-with-hype Telegram groups.
At the same time, the now intensifying search for accountability is zeroing in on the potential perpetrators. Victims of the scam are now doing what any good detective would do: they’re tracking wallets, analyzing blockchain activity, and attempting to uncover bogus details about Source 1’s operations and connections. Aza Ventures claims to be working with Convex Finance and the rest of the community to pressure the scammer into refunding a portion of the stolen funds by the end of June—but many in the community are highly skeptical of this claim.
Conclusion
A large-scale crypto Ponzi scheme has shaken confidence in the RWA and VC-backed sectors of the market and turned a promising wave of OTC opportunities into a busted prospect. A $50 million fraud that was ably perpetrated in trusted Telegram channels and private networks drives home the urgent necessity for verification, transparency, and due diligence—even in seemingly exclusive circles.
While awaiting answers and compensation, the many victims of the collapse that FTX wrought must now serve as a painful reminder of the lesson that—”in a space built on decentralization and trustless systems, trust remains the most vulnerable currency of all.” And to be quite blunt, the space we call crypto seems all the more vulnerable today.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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