OX.FUN denies extortion claims as liquidity concerns rise

OX.FUN, a crypto exchange, is facing allegations of extortion since the leaked screenshots of DMS on social media show that it demanded promotional posts in return for 1 million in frozen user funds. However, in a recent statement, OX.FUN has denied these allegations.

On February 23rd, JefeDAO, the artist collective, shared a screenshot of DMs sent by an OX.FUN representative. The messages contained an offer from the exchange to repay frozen funds in installments of $200,000 per month for five months only if the affected users start promoting the trade on their X accounts. The crypto exchange also wanted to get the negative posts removed by the users and their friends.

.@nicodotfun the founder of @OXFUNHQ DMd us saying the only way to get the $1m USDC that they stole back is to give them free promotion for 5 months

I literally know this is 100% fraud just based on the fact that it is highly unusual and suspicious for an exchange to request… pic.twitter.com/dNyIpBjMJA

— jefeDAO (@thejefedao) February 23, 2025

JefeDAO referred to it as “blackmail”. JefeDAO claimed the exchange had frozen the funds based on the accusation of market manipulation.

On February 24th, OX.FUN said in an X post that JefeDAO aggressively sold Jailstool tokens to manipulate the market. The exchange reveals the group went against the terms of service with an “Oracle manipulation attack.”

Good morning OXFUN.

Over the past months, OXFUN has focused on becoming a premier and trusted exchange for users to trade assets. It is heartbreaking to see a group of bad actors attempt to profit off of illegal market manipulation and then proceed to attempt to tarnish…

— OX.FUN (@OXFUNHQ) February 24, 2025

As revealed in the exchange’s statement, JeffeDAO deposited 1 million USDC on February 14th and started selling large amounts of JAILSTOOL to repurchase it after driving its price down to $0.034.

OX.FUN allegations have raised doubts about its financial stability

The X community note is tagged in OX.FUN post suggests that the exchange has no proof of the claims and is holding the user’s $1 million USDC in funds for extortion. Furthermore, the note says that the platform is linked to Su Zhu and Kyle Davies behind 3AC “and should be treated with caution without proof.”

According to Coinbase director Conor Grogan, the exchange has less than $1.7 million in liquidity apart from its native token, citing the data from Arkham Intelligence. He says if the exchange processes the pending $1 million withdrawal request, they will be left with only about $1000 USDC in holdings.

Conor added, “There is a chance that they have untagged wallets I’m unaware of/not able to track. But let’s be honest, it’s Su Zhu.”

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