Crypto Scam: Insiders Expose $50M Fraud Involving SUI, NEAR, & Others

One of the largest over-the-counter (OTC) crypto scams using popular tokens such as SUI, NEAR, and Axelar was revealed.

The crypto scam estimated to defraud investors of more than 50 million dollars since November 2024 to June 2025 has been running on trusted Telegram channels.

Despite obvious preliminary red flags, a large number of retail traders, crypto whales, and venture capital firms were convinced.

According to Altcoin Alpha reports, the mastermind of the scam, dubbed as Source 1, has not been arrested, but the recovery of the funds is underway.

Crypto Scam: Trust Building Phase Led to Widespread Confidence

Altcoin Alpha disclosed that the crypto scam started at the end of 2024 with seemingly legitimate offers of OTC deals that were available through invite-only Telegram groups.

High-profile tokens like Aptos, GRT, SEI, and Swell were offered at steep discounts of up to 50% below market value.

The buyers were informed that the tokens were going to be delivered after a 4 to 5-month vesting period.

Early investors did not have any trouble receiving their tokens. The profitable deals created an image of legitimacy that prompted other people to contribute even more.

By the beginning of 2025, there were more people joining in as stories of sure deals and fast profits were spread.

VCs, KOLs, and crypto whales began allocating sizable funds, further strengthening belief in the crypto scam.

Crypto Scam Added Popular Tokens to OTC Deals

From February 2025, the volume and variety of OTC offerings expanded sharply. New tokens like SUI, NEAR, GRASS, Axelar, and Fluid were added. The deals continued to promise discounted prices and clear timelines, which drew even more investors.

As more users bought into the crypto scam, some began overlooking inconsistencies. Though public warnings were issued by crypto insiders, many investors dismissed the alerts.

According to a May post on X by Eman Abio from the SUI team, “There is NO deal!” Despite this, Telegram activity remained high, and trust in the scheme persisted.

Lucian Mincu of MultiversX also issued a statement discouraging participation in such OTC deals, warning that many were crypto scams. However, confidence in past successful deliveries made most investors ignore the cautionary messages.

Collapse Started with Delays

By June 2025, reports of missing token distributions started to surface. The final known deal was for Fluid tokens, introduced on June 1. Soon after, delivery of previously promised tokens stopped entirely.

Explanations from the crypto scam organizers included travel delays and Know Your Customer (KYC) complications, though no concrete updates followed.

On June 19, Aza Ventures — one of the lead VC groups involved — publicly admitted that they too had been scammed.

The firm claimed that the dealer known as “Source 1” had used new funds to cover older promises in a Ponzi-like cycle.

Moreover, they also revealed that other supposed sources, “Source 2” and “Source 3,” were unknowingly routing deals through the same person. Aza stated,

“We believed the deals were legitimate. Early deliveries happened. But eventually, it turned into a fund recycling scheme.”

According to their latest updates, “Source 1” is suspected to be an Indian national and reportedly the founder of a project listed on Binance.

His identity is known to Aza Ventures, who have chosen not to name him publicly while attempting to recover funds.

Wallet addresses linked to Source 1 have now been exposed by Altcoin Alpha. Screenshots and transaction histories are being reviewed by on-chain investigators.

The crypto community has also begun tracking transactions to understand how the crypto scam progressed.

More so, according to the crypto scam report, the token list spans more than 30 crypto assets, including Celestia, LayerZero, Ronin, Sandbox, Berachain, and Conflux.

Recovery efforts are underway, but many affected parties remain uncertain about reimbursement.

The fraud news comes shortly after the crypto scam of Nobitex Exchange where over 100 million of digital assets were stolen by hackers.

Following the hack, hackers posted the complete source code and systems information of Nobitex publicly, putting users funds at risk.