A sophisticated $50 million over-the-counter (OTC) crypto scam running on Telegram has been exposed, involving fake discounted deals on popular altcoins such as SUI, NEAR, SEI, and Axelar (AXL). Despite multiple warnings from crypto insiders and project teams, many investors, including retail traders, whales, and venture capitalists, were deceived by the scam that operated from November 2024 through June 2025.
The fraudsters impersonated legitimate OTC dealers offering tokens at steep discounts with purported vesting periods, initially delivering profits to early investors to build credibility. This illusion of legitimacy attracted more participants via private Telegram groups and endorsements allegedly from prominent crypto figures and whales.
As the scheme evolved, it expanded to include more tokens like Aptos (APT), The Graph (GRT), Swell, GRASS, and Fluid. By June 2025, token distributions abruptly stopped, revealing the Ponzi-like structure in which new investor funds paid returns to earlier participants.
Aza Ventures, a major broker involved, publicly identified the scam mastermind—referred to as 'Source 1'—suspected to be an Indian national linked to a Binance-listed project, though his identity remains undisclosed pending fund recovery efforts. Blockchain investigators and analysts from Altcoin Alpha and Crypto Sleith are tracking wallet addresses and transactions related to the scam.
Market impact has been observed with SUI, NEAR, and AXL experiencing price drops between approximately 1.9% and 4.8%, while SEI interestingly saw a 5% gain despite the broader downtrend around the scam news. The scam adds to growing concerns over crypto-related crimes despite a reported overall decline in illicit crypto activity in 2024.