Key takeaways
Crypto investigator ZachXBT criticized Token2049 for poor sponsor vetting, warning that platinum sponsorships don’t equate to legitimacy. A number of sponsors he flagged turned out to have shady information.
JPEX and HyperVerse used occasion sponsorships to challenge credibility. Each later collapsed underneath fraud investigations, inflicting billions in investor losses and arrests.
Purple flags embrace nameless groups, low liquidity, overhyped advertising, poor tokenomics and listings solely on obscure exchanges.
What drives these cash isn’t innovation however hypothesis, influencer buzz and cult-like followings, highlighting how unpredictability fuels their survival.
Within the unpredictable cryptocurrency market, sure digital property live on regardless of dealing with controversies, vital value drops or missing substantial underlying worth. Although flagged as shady cash, they proceed drawing appreciable curiosity from devoted followers. This sustained engagement is commonly pushed by speculative pleasure, sturdy group help and the attract of fast income.
ZachXBT, a widely known crypto sleuth, made some observations through his Telegram channel on just a few sponsors of Token2049, a serious crypto occasion. He felt the organizers of such occasions do little due diligence on their sponsors and {that a} challenge being a platinum sponsor doesn’t enhance credibility. He went on posting on his channel about sketchy Token2049 sponsors.
This text explores why some cash display a exceptional persistence regardless of being sketchy. It discusses 5 shady cash that proceed drawing crypto traders and investigates the explanations for his or her longevity. It’s going to additionally clarify how beginner merchants can shield themselves from such tasks.
Why shady cash survive regardless of the percentages
Regardless of weak fundamentals, many questionable cryptocurrencies persist available in the market. Whereas most fail rapidly, some survive or briefly thrive because of particular components. These embrace:
Speculative buying and selling: Sharp value fluctuations appeal to risk-tolerant merchants looking for fast income.
Devoted communities: Loyal supporters, usually pushed by memes or nostalgia, maintain these tasks alive.
Low market liquidity: Restricted buying and selling exercise permits giant traders or insiders to affect costs, drawing in speculators.
Periodic hype: Social media tendencies, influencer endorsements or sudden information can briefly enhance curiosity in these cash.
Do you know? From “1,000x assured returns” to “satellite-powered DeFi,” scammy tasks usually use flashy narratives to hook merchants. When the claims are daring with out proof, cash are more likely to be sketchy.
5 shady cash refusing to die
ZachXBT mentioned just a few sponsors of TOKEN2049, which persist inside the unpredictable crypto market regardless of opaque operations. He talked about the next cash as sketchy:
Spacecoin (SPACE)
Origin: Launched by Gluwa in 2024-2025 and the title sponsor of Token2049, Spacecoin goals to be the world’s first decentralized bodily infrastructure community (DePIN) powered by satellites. It claims its decentralized satellite tv for pc community will present international 5G web to the two.9 billion individuals who at the moment lack entry, to attach your complete world.
Controversies: Onchain investigator ZachXBT labeled Spacecoin as “botted” and unreliable, questioning its legitimacy. Whereas botted might be interpreted in some ways, not one of the meanings is flattering.
Why questionable: There are considerations surrounding Spacecoin. For instance, in June 2022, it claimed to have undergone a number of months of refinement and good contract auditing, with out naming a particular audit agency, and no public report was supplied. Furthermore, there isn’t a verifiable documentation relating to the launch of satellites.
What sustains it: Robust promotional efforts, occasion sponsorships and speculative curiosity, together with a devoted group and media consideration, maintain restricted buying and selling exercise alive.
JuCoin
Origin: JuCoin, beforehand Jubi, is a Singapore-based cryptocurrency alternate established in 2013, with its JU token and CeDeFi providers increasing its ecosystem by 2025.
Controversies: ZachXBT flagged JuCoin as a “sketchy” platinum sponsor of Token2049, citing a historical past of possession modifications, rebrands and regulatory pivots.
Why questionable: JuCoin lacks regulation in main markets, although it has utilized for a license in Taiwan. The challenge shouldn’t be regulated within the US, EU or different main markets having sturdy regulatory requirements, aside from Singapore’s Financial Authority.
What sustains it: Hypothesis across the token and an aggressive advertising drive for buying and selling exercise.
Weex
Origin: Weex is a Singapore-registered crypto futures platform working since 2018 and providing nameless buying and selling and bonus incentives.
Controversies: Weex shouldn’t be regulated by any monetary authority with strict requirements.
Why questionable: There have been social media posts complaining of surprising habits on the alternate, together with frozen accounts and sudden Know Your Buyer (KYC) points.
What sustains it: The attraction of futures buying and selling, speculative curiosity in high-yield alternatives preserve buying and selling quantity and aggressive promotions maintain driving it.
DWF
Origin: Listed as a platinum sponsor at Token2049, DWF is a sketchy market maker, based on ZachXBT, that conducts trades on over 60 exchanges and is engaged in high-profile investments. It has little publicly obtainable details about its background or workforce.
Controversies: It could have been included on ZachXBT’s listing because of prior accusations of wash buying and selling as a market maker and a more moderen allegation of a “rug pull” from Vite Labs.
Why questionable: On March 27, 2025, Vite Labs said its improvement funds have been “rugged” by DWF’s market-making providers and Binance’s resolution to delist the challenge.
What sustains it: Recognition from convention sponsorships, promotional narratives and speculative hype round listings retains minimal buying and selling curiosity alive.
Bitunix
Origin: Based round 2021, Butunix is a crypto alternate registered in Saint Vincent and the Grenadines. It gives spot and futures buying and selling.
Controversies: Labeled “sketchy” by ZachXBT most likely for drawing the scrutiny of South Korea’s Monetary Intelligence Unit (FIU), which is a part of the Monetary Companies Fee (FSC), for offering providers to Korean prospects with out the required registration.
Why questionable: Restricted regulatory oversight and an unclear company construction undermine belief.
What sustains it: Buying and selling quantity is pushed by listings of area of interest altcoins, bonus incentives and speculative merchants looking for fast income.
Do you know? Corporations like CertiK or Hacken audit legit good contracts. Many sketchy cash declare “inner audits” or just skip them fully, exposing customers to bugs or exploits.
Earlier cases of sketchy tasks posing as sponsors
Listed here are two instances when shady crypto tasks grew to become sponsors of distinguished occasions, solely to make use of the credibility they’d earned to dupe traders:
JPEX
At Token2049 in Singapore, JPEX contributed $70,000 to grow to be a platinum sponsor, utilizing it to look legit. Nonetheless, after Hong Kong regulators issued warnings in mid-September 2023, JPEX deserted its sales space and disappeared from the occasion by the second day.
Shortly afterward, the alternate halted withdrawals, charged extreme charges of 999 USDt (USDT) on 1,000-USDT transactions and confronted hundreds of complaints accusing it of fraud and working and not using a license. Authorities arrested a number of people, froze property and estimated investor losses at over 1 billion Hong Kong {dollars}.
HyperVerse
HyperVerse hosted lavish promotional occasions, together with a $3,500-per-person get together on a $40-million Seafair megayacht in Florida, that includes rapper Rick Ross, to current itself as a prestigious crypto and metaverse platform. It claimed to be growing a “good digital world” and promised day by day returns to draw traders worldwide.
Nonetheless, US regulators later revealed that HyperVerse was a Ponzi scheme that defrauded traders of roughly $1.89 billion. Key promoters, together with Steven Lewis and Brenda Chunga, have been charged by the US Securities and Change Fee for working a fraudulent pyramid scheme.
Do you know? Some shady cash use bots to create pretend buying and selling quantity and trick platforms into rating them larger. It’s essential to analysis effectively earlier than investing.
What beginner merchants ought to be careful for
For these new to cryptocurrency, figuring out suspicious cash early can forestall monetary loss and stress. Listed here are key components to think about when evaluating a cryptocurrency:
Analysis the workforce and challenge historical past: Search for warning indicators reminiscent of nameless founders, frequent rebrands or a scarcity of respected partnerships.
Consider advertising ways: Be cautious of cash promoted via aggressive advertising, together with meme-driven social media, paid influencer endorsements or unrealistic claims like “assured 100x returns.”
Assess liquidity: Cash with low buying and selling quantity or concentrated possession are susceptible to cost manipulation by insiders.
Study tokenomics: Look ahead to pink flags like excessively giant token provide, unclear token-burning processes or allocations closely favoring insiders, which can point out dangers of value manipulation or scams.
Confirm alternate listings: Cash listed solely on lesser-known or poorly regulated exchanges could lack transparency.
Examine previous points: Analysis any historical past of issues, reminiscent of halted withdrawals, scams or regulatory warnings.
Use dependable instruments and diversify: Keep away from relying solely on influencers or trending charts. As a substitute, use onchain analytics to watch pockets exercise and diversify investments to restrict threat.
Shady cash usually act as warnings slightly than real funding alternatives. They appeal to traders with guarantees of large income, however they sometimes conceal manipulative schemes, unclear workforce backgrounds and weak fundamentals. Regardless of frequent market crashes or controversies, these cash persist as a result of unpredictable, community-driven nature of crypto markets.
This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer entails threat, and readers ought to conduct their very own analysis when making a call.
