WazzCrypto, a reputable name in the crypto market, recently exposed a massive crypto fraud involving Waves and Vires Finance. These platforms reportedly swindled users of a staggering $500 million, marking one of the largest scams in the crypto industry. Yet, the incident has been largely underreported until WazzCrypto’s tweet, which shed light on this scandal. The tweet revealed the role of Waves’ founder, Sasha Ivanov, in orchestrating a series of ‘rug pulls’ aimed at manipulating the market for personal gain. The tweet also exposed seven major fraudulent activities that left many investors reeling financially.
Vires Finance was launched back in 2021 as a notable money market based on Waves, attracting a peak of nearly $2 billion. The platform’s promising yield farming opportunities proved to be a potent lure for investors. However, this promising facade concealed a darker reality. Sasha used an algorithmic stablecoin, $USDN, to artificially inflate the price of $WAVES, Waves’ native token.
In detail, Sasha’s modus operandi involved borrowing USDT/USDC against $USDN collateral and subsequently driving up the price of $WAVES, thereby creating an illusion of high yields. However, once users caught wind of this manipulation, the price of $WAVES plummeted by a shocking 93%, causing a loss of $500 million.
In the aftermath, users scrambled to salvage their investments, but Sasha had other plans. Waves introduced a governance proposal engineered to liquidate short positions on $WAVES, effectively compelling users to deposit more capital to evade liquidation. Although this proposal was eventually thwarted, it served its purpose. Sasha secured a liquidity injection, enabling him to perpetuate his Ponzi scheme.
However, Sasha’s fraudulent activities didn’t end there. He formulated more plots, which included coercing the conversion of USDT/USDC into the unstable $USDN. Shortly after, $USDN depegged, marking the failure of his strategy. But Sasha had already closed gateways, rendering it impossible for users to withdraw funds. He also established new markets, all of which were doomed to ‘rug pulls’. By promising liquidity and stablecoins, Sasha manipulated both markets and users, leaving investors with virtually worthless assets.
In what was dubbed as “The Grand Finale,” Sasha took over outstanding debts and seized valuable assets from users. This scam hit Alameda Research hard, causing a loss of $90 million, which further implicated Sasha in major crypto controversies.
This series of fraudulent activities serves as a stern reminder of the risks inherent in the highly volatile crypto market and underscores the need for investors to exercise caution and diligence when choosing platforms and currencies to invest in.
