Telegram OTC scam siphons $50M via discounted altcoin deals

A Telegram scam has been exposed, offering trending altcoins at discounted prices. Over $50M has been taken through Telegram deals, promising a discounted price against a vesting schedule. 

Telegram users have reported channels where discounted offers were made for potentially trending altcoins. An estimated $50M has been taken from buyers, who were promised a sale of altcoins at a discount, while agreeing on a vesting schedule. 

The scammers offered altcoins with sufficient liquidity and presence on social media, promising potential rallies. The offers included SUI, NEAR, SEI, and Axelar (AXL). The offers came from Tier-1 coins, which were considered reliable and liquid, with a lower risk profile compared to memes. 

The scam started with the first sale rounds in November 2024, just as crypto was entering another hype cycle. The first round of coins offered 50% discount on The Graph (GRT), Aptos, SEI, WELL, and others. On-chain data showed the tokens were available in designated wallets, and the scheme built up trust. 

Scam revealed by Aza Ventures Bulletin on Telegram

Following a few rounds of OTC sales, the deals expanded in size, again including Axelar, NEAR, GRASS, and other tokens. The last offer came on June 1, for FLUID tokens. 

Token teams started being aware of the potential loss, with SUI and EGold (EGLD) warning about the OTC deals. The teams explained there is no program or deal for deep discounts and vesting. 

Even on-chain investigator ZachXBT warned about the risk of doing deals on Telegram, offered by an unknown VC fund. Despite this, the subscribers showed trust and demand for the deals, due to the track record of some of the participants. Until recently, the team sent out excuses that the deals would go through, citing project delays and technicalities. 

In the past two weeks, the main source of deals, referred to as Source 1, disappeared from the OTC channel Aza Ventures Bulletin. The channel announced that part of the deals were in fact Ponzi schemes, while others were legitimate and some value could be salvaged. Aza Ventures is a Tier-4 crypto VC fund, with 71 investments in relatively small projects. 

The channel admin is now dealing with the three main originators of OTC deals, aiming to recoup the funds by the end of June. Authorities and exchanges have been notified, with the possibility to freeze funds. 

Up to $50M have been taken from buyers, which include whales, KOLs and other projects. The deals included multiple trending tokens, including Kava Fluid, OG, Aethir, Movement, The Sandbox, Ronin, Celestia, Wormhole, Arkham, Berachain, and more. The offers showed awareness of crypto trends, offering some of the hottest trending altcoins and projects.

Scammer linked to Binance-listed crypto project

One of the biggest blows against trust in crypto is the person referred to as Source 1. For now, the channel is guarding their identity, though there are claims the seller is also the founder of another significant crypto project, with a reputation and a listing on Binance. 

Initially, the OTC deals channel will not dox the identity of Source 1, aiming to use the leverage for recouping as much value for investors as possible. 

“I want to be clear: the only reason I am not currently disclosing Source 1’s identity is because I believe keeping this confidential for now gives us the best chance to recoup both your and my investments. If, at a later stage, the community feels it is better to dox them and proceed differently, I am open to that. But at this point, disclosure could jeopardize recovery efforts,” announced the channel admin. 

However, Source 1 may have leaked his real personality, by trying to differentiate his social profile from the scam. Recently, Ravindra Kumar posted on X, stating he was not involved with OTC deals. Kumar is one of the founders of Self Chain (SLF), formerly known as Frontier.

Your crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites