Earlier this day, ZachXBT shared updates about his newest observations by his Telegram crew. This time, the spotlight changed into as soon as on Token2049, a illustrious cryptocurrency tournament that is expected to appeal to valuable industry gamers in three separate events later this twelve months.
The alert warned people of the crew to be cautious of sponsors as the tournament approaches because conveners generally create puny or no due diligence on these supporters. “Correct form because someone is a title or platinum sponsor does now not mean they are credible,” Zach wrote.
Zach blows whistle about shady and sketchy Token2049 sponsors
The file listed Spacecoin as the title sponsor of the upcoming tournament, but according to Zach, it is a “botted project.”
Connect with @_spacecoin, Title Sponsor of #TOKEN2049 Dubai!
Spacecoin is the enviornment’s first DePIN powered by satellites, constructing trustless, decentralized web connectivity on a global scale.
Learn more: https://t.co/ove4Sodour pic.twitter.com/n6DMQ1rZgm
— TOKEN2049 (@token2049) March 20, 2025
A brief sight at Spacecoin’s web page reveals it is aiming to be the enviornment’s first DePIN project that is powered by satellites. It claims its “decentralized satellite tv for computer constellation supplies global 5G web entry to the two.9 billion other folks that remain unconnected” and has lofty ambitions of connecting the enviornment by its satellites.
The term “botted” would per chance also even be interpreted in a necessity of solutions in crypto, but none is flattering. On the brilliant side, its name looks alongside platforms love OKX, BloFin, MEXC,KuCoin and Binance as“title sponsors.”
The on-chain sleuth also tagged Bitunix, JuCoin, WEEX, and DWF, which Token2049 lists as platinum sponsors as“sketchy.”
Zach identified in his file that the groups he mentioned are the ones on his radar for now. However, he expects the listing to develop longer sooner than the valuable tournament begins in April.
For the centralized exchanges that made the “sketchy” listing, Zach stated he checked to confirm if the group is public and has a prior work history in the dwelling. The listedplatforms collectively with Bitunix, JuCoin,& WEEX all failed this test.
Bitunix, which Zach described as a “sketchy alternate,” is an true cryptocurrency alternate registered in Saint Vincent and the Grenadines and it supplies situation and futures procuring and selling.Some days ago, a file published that Bitunix is being focused by South Korea’s Monetary Intelligence Unit (FIU) of the Monetary Companies and products Commission (FSC) for offering services and products to Korean customers with out correct registration.
The crypto platform reportedly operates Korean-language web sites and supplies market and buyer enhance activities focused to Korean merchants with out notifying authorities or submitting for a VASP license.
JuCoin, also tagged “sketchy” by Zach, is one more alternate, beforehand is named Jubi. It might well most likely even have gotten on Zach’s radar because it has a history of ownership adjustments,rebrands and regulatory pivots. Satirically, the alternate launched that it had utilized for its VASP license to characteristic in Taiwan, stating that it “is taking the lead in Taiwan’s compliance project by formally making exhaust of for regulatory licenses, imposing KYCsystems.”
One other eyebrow-raiser would per chance be that JuCoin is now not regulated in the US, EU, or rather about a valuable markets with strict regulatory standards, rather then for an exemption from Singapore’s Monetary Authority.
WEEX, one moresketchy company according toZach, is a crypto futures alternate established in 2018 and registered in Singapore. The doubts about the alternate are because it is now not regulated by a monetary authority with strict standards. There have also been social media posts complaining of unfamiliar conduct on the alternate, equivalent to frozen accounts and unwarranted KYC disorders.
DWF, tagged as a “sketchy market maker,” is a known Web3 investor and market maker, procuring and selling on over 60 exchanges and smitten by high-profile investments. It would per chance also had been integrated on Zach’s listing on story of past accusations of wash procuring and selling as a market maker and the more newest rug allegation from Vite Labs.
Vite Labs made the rug allegation hours ago this day, March 27, 2025. The allegation changed into as soon as shared on the project’s X web page and claimed that “the funds left for vogue acquired rugged by @DWF market making provider and @binance delistdedication.”
“We are able to most efficient relish the network till we are able to now now not enhance it. All roadmap plans are cancelled,” the submit from Vite Labs concluded.
Hi guys we are in search of to update that the funds left for vogue acquired rugged by @DWF market making provider and @binance delist dedication.
We are able to most efficient relish the network till we are able to now now not enhance it.
All roadmap plans are cancelled.
— Vite Labs 🏃🏻♂️ (@vitelabs) March 27, 2025
In the comments part of the submit, other folks demanded more info on how DWF Labs might even have rugged the funds, but Vite Labs did not present to any extent further clarification. As for Binance, it claimed that it delisted Vite Labs’ token because it now now not met positive requirements.
The wash procuring and selling allegation linked to DWF Labs came in Can also merely 2024. It accused the market maker of conducting over $300 million in wash trades all the strategy in which by seven tokens in 2023, manipulating the associated payment of Yield Guild Games’ native token, YGG and rather about a cryptocurrencies.
Binance refuted the allegations, claiming that the transactions had been proprietary and had been free of manipulation whereas accusing the pinnacle of the monitoring group of collaboration with DWF’s competitors, resulting in his termination.
Binance has affirmed its strict market surveillance program and commitment to combating market abuse. The alternate has stated that it does now not tolerate manipulation practices and has brushed off almost 355,000 customers with a transaction quantity of over $2.5 trillion for violating its phrases of exhaust previously couple of years.
The hazard of sketchy platforms posing as sponsors
A sketchy character sponsoring an tournament, impress, or politician happens in all spheres of existence, collectively with crypto.
It does now not happen generally on the Token2049 event but a case changed into as soon as recorded now not too long ago which had disastrous consequences. Zach in heys report highlighted one incident from unimaginative 2023 when a sketchy alternate is named JPEX changed into as soon as chosen as a platinum sponsor for that twelve months’s Token 2049 convention.
The group changed into as soon as flagged by the Hong Kong govt all the strategy in which by the convention as an unlicensed company with allegedly “suspicious positive aspects.”
After victims made about 1400 experiences to legislation enforcement, about 70 other folks had been arrested by the police in reference to the HK$1.6 billion JPEX cryptocurrency scandal and almost HK$230 million (US$29.37 million) in belongings had been straight away frozen.
The scandal changed into as soon as tagged Hong Kong’s finest case of alleged monetary fraud. Despite the whole heat, the platform remained defiant, hitting customers with an exorbitant payment for virtual asset withdrawals.
Police Commissioner Raymond Siu Chak-yee later revealedthe need of arrests linked to the case had shot up to72 and about HK$228 million had been frozen.
“The capability has acquired 2,636 experiences regarding the case as of this day, and the quantity enthusiastic is ready HK$1.6 billion,” he stated.
Amongst those beforehand arrested had been social media influencers who had seemed in adverts for the procuring and selling platform and assign up their very have over-the-counter shops. These integrated Chan Flit-yee, Joseph Lam Chgood enough and Sheena Leung.
We’re joyful to be partnering for TOKEN2049, a key crypto tournament! Be part of us for our “Take the Bitcoin” activity with a total prize pool of up to 100,000 USDT. From Sep 13-14, 2023, at Marina Bay Sands, Singapore. Entire tasks to rep a Bitcoin & more! Glimpse you at TOKEN2049#JPEX… pic.twitter.com/QuT3IsPOp4
— JPEX_Official (@ExchangeJpex) September 12, 2023
JPEX doubtlessly signed on as a sponsor for the tournament in hopes that it will lend a hand boost its credibility, which might well appeal to even more customers.
One other example of a crypto project that employed this tactic is Centra Tech, a untrue crypto project that leveraged celeb endorsements and tournament appearances to form credibility.
With its antics, it secured $32 million in funding by an ICO, claiming to give a debit card for crypto funds. These in the aid of it went as a long way as talking about it at events, touting untrue partnerships with Visa and Mastercard.
The SEC charged them with fraud in 2018, and co-founder Sohrab Sharma changed into as soon as sentenced to eight years in penal advanced.
A absorbing more accepted example is the FTX saga. FTX, now a bankrupt alternate, historical its foremost political impact, which itacquired by sponsoring politicians, to toughen its repute.
Its originateerCEO Sam Bankman-Fried would donate hundreds and hundreds to political campaigns in the US, collectively with $1 million to a McConnell-aligned bigPAC days sooner than FTX’s 2022 give method. The explanation of the spending changed into as soon as to relish FTX on the favorable side of regulation, but in the discontinue, FTX changed into as soon as uncovered for misappropriating $10 billion in buyer funds, resulting in Bankman-Fried’s conviction in 2023.
