Major OTC Crypto Scam Targets VCs and Whales

Sophisticated $50 Million OTC Crypto Scam Targets Major Coins

A sophisticated $50 million over-the-counter crypto scam has targeted major coins such as SUI and SEI, affecting venture capitalists and crypto whales as they were lured by fake deals in Telegram groups.

Market reactions underscore the persistent vulnerabilities in over-the-counter transactions, highlighting the need for enhanced due diligence among investors.

The scam, attributed to the founder of Self Chain, Ravindra Kumar, exploited investor trust in private Telegram groups, offering high-value tokens at deep discounts. Despite his denial of involvement, scrutiny around Kumar has intensified. The scam impacted several major tokens, including SUI, SEI, and NEAR, misleading participants through impersonation. Key figures such as Eman Abio from the SUI team issued warnings that the deals were fraudulent.

“There is NO deal!” — Eman Abio

Investor trust suffered as sophisticated scammers imitated legitimate actors, leading to a $50 million loss. The deception has raised concerns among industry players and affected assets like SUI and SEI. Immediate reactions from industry leaders highlight the complexities of detecting fraudulent schemes within OTC environments. Projects haven’t had foundation funds compromised yet, but investors call for improved grievance mechanisms.

Historical trends in similar scams, often exploiting fragmented trust channels, raise questions about regulatory gaps. The incident further emphasizes vulnerabilities in peer-to-peer trades and has spurred discussions on needed regulatory changes. The need for heightened scrutiny and preventive measures becomes evident as affected investors digest the impact, prompting calls for regulatory overhauls.