Big stage, bigger scams? 5 shady crypto projects that made it to the spotlight

Key takeaways

• Crypto investigator ZachXBT criticized Token2049 for poor sponsor vetting, warning that platinum sponsorships don’t equate to legitimacy. Several sponsors he flagged turned out to have shady records.

• JPEX and HyperVerse used event sponsorships to project credibility. Both later collapsed under fraud investigations, causing billions in investor losses and arrests.

• Red flags include anonymous teams, low liquidity, overhyped marketing, poor tokenomics and listings only on obscure exchanges. 

• What drives these coins isn’t innovation but speculation, influencer buzz and cult-like followings, highlighting how unpredictability fuels their survival.

In the unpredictable cryptocurrency market, certain digital assets continue to exist despite facing controversies, significant price drops or lacking substantial underlying value. Though flagged as shady coins, they continue drawing considerable interest from dedicated followers. This sustained engagement is often driven by speculative excitement, strong community support and the allure of rapid profits.

ZachXBT, a well-known crypto sleuth, made some observations via his Telegram channel on a few sponsors of Token2049, a major crypto event. He felt the organizers of such events do little due diligence on their sponsors and that a project being a platinum sponsor doesn’t increase credibility. He went on posting on his channel about sketchy Token2049 sponsors.

This article explores why some coins demonstrate a remarkable persistence despite being sketchy. It discusses five shady coins that continue drawing crypto investors and investigates the reasons for their longevity. It will also explain how newbie traders can protect themselves from such projects.

Why shady coins survive despite the odds

Despite weak fundamentals, many questionable cryptocurrencies persist in the market. While most fail quickly, some survive or briefly thrive due to specific factors. These include:

• Speculative trading: Sharp price fluctuations attract risk-tolerant traders seeking quick profits.

• Dedicated communities: Loyal supporters, often driven by memes or nostalgia, keep these projects alive.

• Low market liquidity: Limited trading activity allows large investors or insiders to influence prices, drawing in speculators.

• Periodic hype: Social media trends, influencer endorsements or unexpected news can temporarily boost interest in these coins.

Did you know? From “1,000x guaranteed returns” to “satellite-powered DeFi,” scammy projects often use flashy narratives to hook traders. When the claims are bold without evidence, coins are likely to be sketchy.

5 shady coins refusing to die

ZachXBT discussed a few sponsors of TOKEN2049, which persist within the unpredictable crypto market despite opaque operations. He mentioned the following coins as sketchy:

Spacecoin (SPACE)

• Origin: Launched by Gluwa in 2024-2025 and the title sponsor of Token2049, Spacecoin aims to be the world’s first decentralized physical infrastructure network (DePIN) powered by satellites. It claims its decentralized satellite network will provide global 5G internet to the 2.9 billion people who currently lack access, to connect the entire world.

• Controversies: Onchain investigator ZachXBT labeled Spacecoin as “botted” and unreliable, questioning its legitimacy. While botted can be interpreted in many ways, none of the meanings is flattering.

• Why questionable: There are concerns surrounding Spacecoin. For example, in June 2022, it claimed to have undergone several months of refinement and smart contract auditing, without naming a specific audit firm, and no public report was provided. Moreover, there is no verifiable documentation regarding the launch of satellites. 

• What sustains it: Strong promotional efforts, event sponsorships and speculative interest, along with a dedicated community and media attention, keep limited trading activity alive.

JuCoin 

• Origin: JuCoin, previously Jubi, is a Singapore-based cryptocurrency exchange established in 2013, with its JU token and CeDeFi services expanding its ecosystem by 2025. 

• Controversies: ZachXBT flagged JuCoin as a “sketchy” platinum sponsor of Token2049, citing a history of ownership changes, rebrands and regulatory pivots.

• Why questionable: JuCoin lacks regulation in major markets, though it has applied for a license in Taiwan. The project is not regulated in the US, EU or other major markets having robust regulatory standards, apart from Singapore’s Monetary Authority.

• What sustains it: Speculation around the token and an aggressive marketing drive for trading activity. 

Weex

• Origin: Weex is a Singapore-registered crypto futures platform operating since 2018 and offering anonymous trading and bonus incentives. 

• Controversies: Weex is not regulated by any financial authority with strict standards.

• Why questionable: There have been social media posts complaining of unusual behavior on the exchange, including frozen accounts and unexpected Know Your Customer (KYC) issues.

• What sustains it: The appeal of futures trading, speculative interest in high-yield opportunities maintain trading volume and aggressive promotions keep driving it.

DWF 

• Origin: Listed as a platinum sponsor at Token2049, DWF is a sketchy market maker, according to ZachXBT, that conducts trades on over 60 exchanges and is engaged in high-profile investments. It has little publicly available information about its background or team. 

• Controversies: It may have been included on ZachXBT’s list due to prior accusations of wash trading as a market maker and a more recent allegation of a “rug pull” from Vite Labs.

• Why questionable: On March 27, 2025, Vite Labs stated its development funds were “rugged” by DWF’s market-making services and Binance’s decision to delist the project. 

• What sustains it: Recognition from conference sponsorships, promotional narratives and speculative hype around listings keeps minimal trading interest alive.

Bitunix 

• Origin: Founded around 2021, Butunix is a crypto exchange registered in Saint Vincent and the Grenadines. It offers spot and futures trading. 

• Controversies: Labeled “sketchy” by ZachXBT probably for drawing the scrutiny of South Korea’s Financial Intelligence Unit (FIU), which is part of the Financial Services Commission (FSC), for providing services to Korean customers without the required registration.

• Why questionable: Limited regulatory oversight and an unclear corporate structure undermine trust. 

• What sustains it: Trading volume is driven by listings of niche altcoins, bonus incentives and speculative traders seeking quick profits.

Did you know? Firms like CertiK or Hacken audit legitimate smart contracts. Many sketchy coins claim “internal audits” or simply skip them entirely, exposing users to bugs or exploits.

Previous instances of sketchy projects posing as sponsors

Here are two cases when shady crypto projects became sponsors of prominent events, only to use the credibility they had earned to dupe investors:

JPEX

At Token2049 in Singapore, JPEX contributed $70,000 to become a platinum sponsor, using it to appear legitimate. However, after Hong Kong regulators issued warnings in mid-September 2023, JPEX abandoned its booth and disappeared from the event by the second day. 

Shortly afterward, the exchange halted withdrawals, charged excessive fees of 999 USDt (USDT) on 1,000-USDT transactions and faced thousands of complaints accusing it of fraud and operating without a license. Authorities arrested several individuals, froze assets and estimated investor losses at over 1 billion Hong Kong dollars.

HyperVerse

HyperVerse hosted lavish promotional events, including a $3,500-per-person party on a $40-million Seafair megayacht in Florida, featuring rapper Rick Ross, to present itself as a prestigious crypto and metaverse platform. It claimed to be developing a “perfect virtual world” and promised daily returns to attract investors worldwide. 

However, US regulators later revealed that HyperVerse was a Ponzi scheme that defrauded investors of approximately $1.89 billion. Key promoters, including Steven Lewis and Brenda Chunga, were charged by the US Securities and Exchange Commission for running a fraudulent pyramid scheme.

Did you know? Some shady coins use bots to create fake trading volume and trick platforms into ranking them higher. You need to research well before investing.

What newbie traders should watch out for

For those new to cryptocurrency, identifying suspicious coins early can prevent financial loss and stress. Here are key factors to consider when evaluating a cryptocurrency: 

• Research the team and project history: Look for warning signs such as anonymous founders, frequent rebrands or a lack of reputable partnerships. 

• Evaluate marketing tactics: Be cautious of coins promoted through aggressive marketing, including meme-driven social media, paid influencer endorsements or unrealistic claims like “guaranteed 100x returns.” 

• Assess liquidity: Coins with low trading volume or concentrated ownership are prone to price manipulation by insiders. 

• Examine tokenomics: Watch for red flags like excessively large token supply, unclear token-burning processes or allocations heavily favoring insiders, which may indicate risks of price manipulation or scams. 

• Verify exchange listings: Coins listed only on lesser-known or poorly regulated exchanges may lack transparency. 

• Investigate past issues: Research any history of problems, such as halted withdrawals, scams or regulatory warnings. 

• Use reliable tools and diversify: Avoid relying solely on influencers or trending charts. Instead, use onchain analytics to monitor wallet activity and diversify investments to limit risk.

Shady coins often act as warnings rather than genuine investment opportunities. They attract investors with promises of massive profits, but they typically hide manipulative schemes, unclear team backgrounds and weak fundamentals. Despite frequent market crashes or controversies, these coins persist due to the unpredictable, community-driven nature of crypto markets.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.