The $50 Million OTC Crypto Scam No One Saw Coming

In a world already sceptical of cryptocurrency’s wild west reputation, a $50 million scandal has emerged from the shadows, reminding everyone why trust is such a fragile currency in the digital asset space. The saga unfolded not through the pages of a whitepaper or the lines of a smart contract, but through a network of Telegram messages, backroom token deals, and ultimately, a multi-million-dollar loss that stunned even the savviest of crypto veterans.

This wasn’t a rug pull in the traditional sense. It wasn’t the collapse of a DeFi protocol due to sloppy code or a DAO vote gone rogue. No—the con was quieter, more deliberate. It took place through over-the-counter (OTC) trades, an often opaque part of the crypto market where large deals occur peer-to-peer, outside the visibility of exchanges. And it all came crumbling down in June 2025.

🥵 $𝟓𝟎𝐌 𝐂𝐫𝐲𝐩𝐭𝐨 𝐎𝐓𝐂 𝐒𝐜𝐚𝐦 𝐄𝐱𝐩𝐨𝐬𝐞𝐝.

🧵A massive OTC Scam involving SUI, Near, Axelar, Sei, and more just got exposed but no TG Channel or CT is talking about it. Jaw-dropping details! 👇$GRASS $APT $ZRO $BEAM $IMX $BERA pic.twitter.com/aQS08poZvc

— Altcoin Alpha (@AltcoinAlphaOnX) June 20, 2025

The Rise of “Source 1” and the Allure of Private Deals

At the heart of this scandal lies a man known only by a pseudonym— “Source 1.” For months, Source 1 had been offering what seemed like golden-ticket opportunities to buy early-stage or vested tokens at steep discounts. These weren’t unknown meme coins. These were household names in crypto: Graph, Aptos, SEI, SUI, NEAR, MultiversX, and even upcoming allocations of Fluid. The prices were so attractive that even seasoned investors, family offices, and crypto-native funds joined in.

These offers didn’t come out of nowhere. They were facilitated by a known Indian OTC brokerage firm, Aza Ventures, which had a decent reputation and a track record of successful deals. That trust played a key role in what would come next.

The first few deals were delivered as promised. Buyers received tokens on time. Vesting schedules were honored. This created a feedback loop of credibility, allowing Source 1 and Aza Ventures to scale up rapidly. The transactions began small—$50,000 here, $100,000 there—but soon ballooned into deals worth millions of dollars. Some investors reportedly allocated over $5 million in a single transaction.

What’s important to understand is how this scam differed from typical crypto fraud. There was no flash; there was no marketing blitz. It all operated on reputation and relationships, often built through Telegram groups and community circles. The scammers knew that credibility was their currency, and they spent it wisely.

Whispers Turn to Alarms

In May 2025, things started to change. Founders of some of the tokens being sold—particularly SUI and MultiversX—began publicly warning investors: there was no official deal. These weren’t minor statements. Eman Abio from SUI took to social media to say, “There is no SUI token deal. Anyone claiming otherwise is lying.” Similar messages came from the MultiversX team as well.

Even the pseudonymous SmokeyTheBera, co-founder of Berachain, posted bluntly: “There is NO deal. Stop buying into OTC lies.”

Still, the machine kept running. Investors rationalized the warnings, assuming perhaps the founders were unaware of private allocations or that this was all part of the back-channel nature of OTC crypto culture. The truth was harder to swallow; there was no deal—not with the projects, not with token issuers. The only real transactions happening were from new investors funding returns to earlier ones. A textbook Ponzi.

Aza Ventures Sounds the Alarm

By June, things began falling apart. Investors were suddenly unable to get their tokens. Payments were delayed. Questions started piling up. Then, on June 19, Aza Ventures publicly revealed the shocking truth: they, too, had been conned.

They identified “Source 1” as the linchpin of the scheme, someone who had allegedly gained their trust over months of successful trading. They admitted to having no idea that what they were helping facilitate had morphed into a full-scale Ponzi scheme. Even more stunning was their confession that they had depleted their own company’s reserves—and even personal savings—trying to cover obligations once the scam came to light.

Aza’s founder, Mohammed Waseem, filed a complaint with Indian authorities and pledged full cooperation in any criminal investigation. He publicly stated that Source 1 had until the end of June to repay the stolen funds, although few in the community are holding their breath.

A Name Surfaces: Ravindra Kumar

Shortly after the revelation, eyes turned to Ravindra Kumar, co-founder and CEO of a Layer-1 blockchain project known as Self Chain. According to Aza Ventures and multiple victims, Kumar had personally facilitated some of the fraudulent deals. His name appeared on contracts, WhatsApp threads, and group chats.

The response was swift. On June 23, Self Chain’s board voted to remove Kumar as CEO, citing actions that diverged from the founding vision. The SLF token, native to Self Chain, plunged nearly 30% on the news.

Kumar denies all wrongdoing. In a statement posted on X, he said:

I’ve been accused of serious wrongdoing, which is completely false. My legal team and I are working on a statement to address this matter. Stay tuned for updates.

— Ravindra Kumar (@ravidsrk) June 20, 2025

Whether he was the mysterious “Source 1” or merely another actor in the chain remains to be proven. But the optics aren’t good.

A $50 Million Hole and Counting

According to internal estimates shared by Aza and corroborated by victims, over $50 million was swept into this scheme. Many investors are still unsure how much, if any, they’ll recover. Some were counting on future token unlocks to fulfill agreements, but those unlocks never existed.

There’s a mix of anger, shame, and disbelief among victims. Some say they ignored red flags out of greed. Others genuinely believed this was the “new normal” of OTC token economics. More than one investor described it as “one of the most elaborate and psychologically manipulative scams” they’ve ever seen.

Lessons from the Rubble

The collapse of this scheme sends several messages to the crypto community.

First: Trust is not a substitute for verification. The informal nature of OTC markets—where deals are done via Telegram and enforced by screenshots—creates an environment ripe for abuse.

Second: Even well-known intermediaries can fall prey to fraud, or worse, become complicit in it. Aza Ventures insists they had no knowledge of the Ponzi mechanics, but some investors argue they should have vetted Source 1 more thoroughly before scaling up.

Third: Due diligence must evolve. Project teams now need to be louder and more proactive when their tokens are being falsely marketed. Warning tweets are not enough.

The Road Ahead

As June draws to a close, the crypto world waits. Will funds be recovered? Will Indian authorities pursue legal action? Will we finally learn the true identity of Source 1?

There’s a darker undertone as well. The scam didn’t just rob people of money. It damaged the credibility of legitimate OTC brokers, tarnished token reputations, and sowed new distrust in a market that desperately needs institutional confidence.

Crypto has always been about decentralization and disintermediation. But it was also supposed to be about transparency—an immutable ledger to prevent exactly this kind of manipulation. And yet, here we are.

If there’s one takeaway, it’s this: In crypto, it’s never “just business.” It’s people, their livelihoods, and often their reputations. The $50 million OTC scam is a lesson written in loss—but one the industry cannot afford to ignore.