Controversial Crypto Projects Shine at Major Events Amid Regulatory Concerns

Several cryptocurrency projects have recently gained visibility through high-profile sponsorships at major industry events, despite raising significant concerns among investigators and regulators. These projects, including Spacecoin, JuCoin, Weex, DWF, and Bitunix, have been labeled as "sketchy" by crypto sleuth ZachXBT due to a lack of transparency, questionable operations, and regulatory gaps [1]. The pattern of using event sponsorships to enhance legitimacy is not new—previous cases like JPEX and HyperVerse highlight the dangers of associating with dubious projects [2].

The Token2049 event, for instance, featured several of these controversial projects as platinum sponsors, an arrangement that critics argue does not equate to credibility [1]. Spacecoin, promoted as a satellite-powered decentralized infrastructure network, has drawn criticism for its vague documentation and lack of verifiable satellite launches [1]. Meanwhile, JuCoin and Weex operate without regulation in major jurisdictions and have faced user complaints regarding account freezes and compliance issues [1]. DWF, a market maker accused of wash trading and a recent “rug pull” incident with Vite Labs, continues to attract attention through conference sponsorships and speculative hype [1].

The survival of these projects in the market can be attributed to factors such as speculative trading, aggressive marketing, and the appeal of quick profits. Limited liquidity and overhyped narratives also play a role in sustaining interest among traders [1]. However, this persistence does not reflect the strength of their fundamentals but rather the unpredictable nature of the crypto market and the influence of social media trends [1].

Past cases underscore the risks. JPEX, a once-platinum sponsor at Token2049, collapsed shortly after, freezing withdrawals and causing billions in losses for Hong Kong investors [2]. Similarly, HyperVerse, which hosted extravagant events to promote its metaverse platform, was later exposed as a $1.89 billion Ponzi scheme [2]. These examples illustrate how event sponsorships can be used to mislead investors and mask fraudulent intentions.

For newcomers, identifying red flags is crucial. These include anonymous team members, low liquidity, unrealistic return promises, and listings only on obscure exchanges [1]. New traders should prioritize due diligence, using on-chain analytics and verifying historical records for past issues such as regulatory warnings or halted withdrawals [1]. Relying solely on influencer endorsements or social media hype can lead to significant losses.

While some of these projects continue to attract followers and speculative interest, their long-term viability remains questionable. The crypto market’s community-driven and volatile nature allows such projects to persist, but this does not justify their legitimacy. Investors are urged to proceed with caution, recognizing that these coins often serve as cautionary tales rather than viable investment opportunities [1].

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Source: [1] [Big stage, bigger scams? 5 shady crypto projects that made it to the spotlight](https://cointelegraph.com/news/5-shady-crypto-projects-that-made-it-to-the-spotlight)