March 31, 2025 1:08:47 PM
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ZachXBT raises red flags about Token2049 sponsors

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Earlier today,  ZachXBT shared updates about his latest observations via his Telegram group. This time, the spotlight was on Token2049, a prominent cryptocurrency event that is expected to attract major industry players in three separate events later this year.

The alert warned members of the group to be wary of sponsors as the event approaches because conveners typically do very little due diligence on these supporters. “Just because someone is a title or platinum sponsor does not mean they are credible,” Zach wrote.

Zach blows whistle about shady and sketchy Token2049 sponsors

The report listed Spacecoin as the title sponsor of the upcoming event, but according to Zach, it is a “botted project.”

A quick look at Spacecoin’s page reveals it is aiming to be the world’s first DePIN project that is powered by satellites. It claims its “decentralized satellite constellation provides global 5G internet access to the 2.9 billion people who remain unconnected” and has lofty ambitions of connecting the world via its satellites.

The term “botted” can be interpreted in a number of ways in crypto, but none is flattering. On the bright side, its name appears alongside platforms like 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 pointed out in his report that the teams he mentioned are the ones on his radar for now. However, he expects the list to grow longer before the first event starts in April.

For the centralized exchanges that made the “sketchy” list, Zach said he checked to verify if the team is public and has a prior work history in the space. The listedplatforms including Bitunix, JuCoin,& WEEX all failed this test.

Bitunix, which Zach described as a “sketchy exchange,” is an actual cryptocurrency exchange registered in Saint Vincent and the Grenadines and it offers spot and futures trading.Some days ago, a report revealed that Bitunix is being targeted by South Korea’s Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) for providing services to Korean customers without proper registration.

The crypto platform reportedly operates Korean-language websites and provides market and customer support activities targeted to Korean investors without notifying authorities or filing for a VASP license.

JuCoin, also tagged “sketchy” by Zach, is another exchange, previously known as Jubi. It may have gotten on Zach’s radar because it has a history of ownership changes,rebrands and regulatory pivots. Ironically, the exchange announced that it had applied for its VASP license to operate in Taiwan, stating that it “is taking the lead in Taiwan’s compliance process by officially applying for regulatory licenses, implementing KYCsystems.”

Another eyebrow-raiser may be that JuCoin is not regulated in the US, EU, or other major markets with strict regulatory standards, except for an exemption from Singapore’s Monetary Authority.

WEEX, anothersketchy company according toZach, is a crypto futures exchange established in 2018 and registered in Singapore. The doubts about the exchange are because it is not regulated by a financial authority with strict standards. There have also been social media posts complaining of weird behavior on the exchange, such as frozen accounts and unwarranted KYC issues.

DWF, tagged as a “sketchy market maker,” is a known Web3 investor and market maker, trading on over 60 exchanges and involved in high-profile investments. It may have been included on Zach’s list because of past accusations of wash trading as a market maker and the more recent rug allegation from Vite Labs.

Vite Labs made the rug allegation hours ago today, March 27, 2025. The allegation was shared on the project’s X page and claimed that “the funds left for development got rugged by @DWF market making service and @binance delistdecision.”

“We will only maintain the network until we can no longer support it. All roadmap plans are cancelled,” the post from Vite Labs concluded.

In the comments section of the post, people demanded more information on how DWF Labs may have rugged the funds, but Vite Labs did not provide any further explanation. As for Binance, it claimed that it delisted Vite Labs’ token because it no longer met certain requirements.

The wash trading allegation linked to DWF Labs came in May 2024. It accused the market maker of conducting over $300 million in wash trades across seven tokens in 2023, manipulating the price of Yield Guild Games’ native token, YGG and other cryptocurrencies.

Binance refuted the allegations, claiming that the transactions were proprietary and were free of manipulation while accusing the head of the monitoring team of collaboration with DWF’s competitors, leading to his termination.

Binance has affirmed its strict market surveillance program and commitment to combating market abuse. The exchange has said that it does not tolerate manipulation practices and has dismissed nearly 355,000 users with a transaction volume of over $2.5 trillion for violating its terms of use in the past couple of years.

The danger of sketchy platforms posing as sponsors

A sketchy character sponsoring an event, brand, or politician happens in all spheres of life, including crypto.

It does not happen often at the Token2049 event but a case was recorded not too long ago which had disastrous consequences. Zach in his report highlighted one incident from late 2023 when a sketchy exchange known as JPEX was chosen as a platinum sponsor for that year’s Token 2049 conference.

The team was flagged by the Hong Kong government during the conference as an unlicensed company with allegedly “suspicious features.”

After victims made about 1400 reports to law enforcement, about 70 people were arrested by the police in connection with the HK$1.6 billion JPEX cryptocurrency scandal and nearly HK$230 million (US$29.37 million) in assets were immediately frozen.

The scandal was tagged Hong Kong’s biggest case of alleged financial fraud. Despite all the heat, the platform remained defiant, hitting users with an exorbitant fee for virtual asset withdrawals.

Police Commissioner Raymond Siu Chak-yee later revealedthe number of arrests related to the case had shot up to72 and about HK$228 million had been frozen.

“The force has received 2,636 reports with regard to the case as of today, and the amount involved is about HK$1.6 billion,” he said.

Among those previously arrested were social media influencers who had appeared in adverts for the trading platform and set up their own over-the-counter shops. These included Chan Wing-yee, Joseph Lam Chok and Sheena Leung.

JPEX probably signed on as a sponsor for the event in hopes that it would help boost its credibility, which would attract even more users.

Another example of a crypto project that employed this tactic is Centra Tech, a fraudulent crypto project that leveraged celebrity endorsements and event appearances to gain credibility.

With its antics, it secured $32 million in funding through an ICO, claiming to offer a debit card for crypto payments. Those behind it went as far as talking about it at events, touting fake partnerships with Visa and Mastercard.

The SEC charged them with fraud in 2018, and co-founder Sohrab Sharma was sentenced to eight years in prison.

An even more popular example is the FTX saga. FTX, now a bankrupt exchange, used its significant political influence, which itgot by sponsoring politicians, to enhance its reputation.

Its formerCEO Sam Bankman-Fried would donate millions to political campaigns in the US, including $1 million to a McConnell-aligned superPAC days before FTX’s 2022 collapse. The purpose of the spending was to keep FTX on the favorable side of regulation, but in the end, FTX was exposed for misappropriating $10 billion in customer funds, leading to Bankman-Fried’s conviction in 2023.

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