Phase 1: Building Trust (Nov 2024 – Jan 2025)

In November 2024, various venture capital groups and private investment pools started bringing what appeared to be legitimate Tier-1 OTC deals in Telegram groups.

These deals promised tokens of high-profile projects like Graph (GRT), Aptos (APT), SEI, SWELL, and others — all available at steep discounts of up to 50% below market value, with a 4–5 month vesting period.

Credit: @AltcoinAlphaOnX

Here’s where bait comes in.

These initial deals were fulfilled on time.

Investors received their tokens as promised, which quickly built confidence in the scheme.

The apparent legitimacy drew in an increasing number of investors, who reinvested larger amounts, encouraged by early success stories and smooth operations.

Phase 2: Scaling the Scam (Feb – June 2025)

By February, the scope of the OTC offerings expanded dramatically.

New deals flooded Telegram groups, but at an even bigger and better scale, featuring tokens such as SUI, NEAR, GRASS, Axelar, and others.

The deal structure remained consistent: steep discounts and the same vesting periods.

Again, this only attracted even more interest, reinforcing the illusion of a trustworthy and highly profitable opportunity for investors, scaling the scam at an unstoppable rate.

Credit: @AltcoinAlphaOnX

Phase 3: Ignored Warnings (May 2025)

Cracks in the operation began to appear by May 2025.

Industry leaders issued public warnings.

Eman Abio from the SUI team took to X to caution users against fake Telegram OTC deals, explicitly stating: “There is NO deal!”

Similarly, Lucian Mincu of MultiversX (formerly Elrond) echoed the alert.

Credit: @AltcoinAlphaOnX

Despite these warnings, the community largely ignored the signs.

Investors continued to pour money into new deals, lured by past returns, success stories, and the continued involvement of seemingly credible groups.

Phase 4: The Scam and Collapse (June 2025)

The turning point came on June 1.

The last known deal was introduced, offering Fluid tokens.

Around the same time, token distributions for older OTC deals stopped.

Investors seeking updates were met with vague excuses, including claims of travel delays, exchange complications, and KYC issues.

Then, on June 19, the leading VC group behind the deals, Aza Ventures, publicly announced that they too had been scammed.

They alleged that their primary dealer, known as “Source 1,” had been running a Ponzi scheme. According to Aza, early deals were genuine, but later ones relied on funds from new investors to fulfill earlier commitments — a textbook Ponzi operation.

Credit: @AltcoinAlphaOnX

To make matters worse, Aza Ventures revealed that their other sources, referred to as “Source 2” and “Source 3,” were themselves sourcing deals through Source 1.

Things very quickly became very ugly.

Tokens Involved

Early Deals (Nov 2024 – Jan 2025)

• Aptos, Sei, Swell, Coti, Kava, Fluid, OG, Aethir

Later Deals (Feb 2025 – Jun 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, and more.

The Mastermind: Who is “Source 1”?

Aza Ventures claims to know the identity of Source 1.

According to insiders, he is believed to be of Indian nationality and reportedly the founder of a project currently listed on Binance. However, Aza Ventures has declined to publicly reveal his identity, opting instead to pressure him privately to return the stolen funds.

@AltcoinAlphaOnX have published an update on X, with more info on “Source 1’s” identity.

Altcoin Alpha
@AltcoinAlphaOnX
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🥵 [𝐎𝐓𝐂 𝐒𝐂𝐀𝐌 𝐔𝐏𝐃𝐀𝐓𝐄]: 𝐒𝐎𝐔𝐑𝐂𝐄 𝟏 𝐃𝐎𝐗𝐄𝐃, 𝐒𝐂𝐑𝐄𝐄𝐍𝐒𝐇𝐎𝐓𝐒 & 𝐖𝐀𝐋𝐋𝐄𝐓 𝐑𝐄𝐕𝐄𝐀𝐋𝐄𝐃 !

🧵Millions vanish, founder of Binance listed project accused, and lives are on the line. Time to expose wallets and screenshots. 👇

1:39 PM · Jun 20, 2025

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Estimated Damage and Fallout

The total amount stolen is estimated to exceed $50 million

Numerous investors reportedly committed over $1 million each.

Among the victims are individual retail investors, crypto whales, project teams, and VCs.

Some victims are now facing life-changing financial losses, and there are reports of severe emotional distress among those affected.

Credit: @AltcoinAlphaOnX

What Happens Next?

Aza Ventures claims to be in active negotiations to recover funds from Source 1 and has set a deadline for restitution by the end of the month.

Meanwhile, the wider crypto community is attempting to track wallet addresses, identify accomplices, and uncover further evidence to bring those responsible to justice.

Credit: @AltcoinAlphaOnX

This incident serves as a chilling reminder of the risks inherent in unregulated OTC crypto trading, especially within informal channels like Telegram, Discord etc.

Despite early signs and public warnings, the combination of trust, greed, and social “proof” proved a powerful tool in the scammers’ hands. For now, the community watches and waits, hoping that justice and refunds will eventually be served.

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