The Dark Side of OTC Trading: How a Fake GSR.io Deal Led to Fraud
A High-Stakes OTC Trade That Turned Into a Costly Lesson
The cryptocurrency industry thrives on innovation but also attracts bad actors looking to exploit trust. Over-the-counter (OTC) trading, often used for large transactions outside traditional exchanges, comes with significant risks.
Recently, Jumbo Blockchain encountered a fraudulent OTC trade that resulted in a loss of 2,000 JNFTC tokens. Fraudsters posing as GSR.io representatives orchestrated the scam, using deception and a fake trading platform to manipulate the transaction. This case highlights the importance of due diligence and security measures in crypto transactions, especially when dealing with unknown parties on Telegram.
A buyer claiming to represent GSR.io proposed via Telegram a $500,000 JNFTC purchase through an external OTC platform, netxglobals.com. The transaction was divided into six phases to create an illusion of security. The first trade was for 50,000 USDT in exchange for 2,000 JNFTC tokens.
Everything appeared professional, but things quickly took a turn.
How the Fraud Unfolded
After Jumbo Blockchain transferred 2,000 JNFTC, the fraudsters claimed they had sent 50,000 USDT through netxglobals.com. When the team checked the platform, the funds appeared in the balance but were locked and could not be withdrawn.
When Jumbo Blockchain reached out, the scammers blamed the OTC platform and promised to resolve the issue. Soon after, they stopped responding on Telegram and disappeared.
It became clear that netxglobals.com was a fraudulent OTC platform designed to display fake balances while preventing victims from accessing the funds.
How OTC Scams Like This Work
This type of scam is common in high-value crypto transactions. It follows a manipulative pattern designed to exploit trust:
1. Fake Institutional Identity — The scammers impersonated GSR.io members to establish legitimacy.
2. Trust-Building Through Phases — By breaking the deal into smaller transactions, they created a false sense of security.
3. Fraudulent OTC Platform — They used netxglobals.com, a fake trading site, to display non-withdrawable balances.
4. Disappearance — Once confronted, they blamed the platform before vanishing from Telegram.
Fraudsters use urgency and false credibility to lure victims into OTC scams. Crypto traders and projects must be extra cautious when dealing with transactions initiated on Telegram.
Lessons for Crypto Projects and Traders
🔹 Never trust unknown traders on Telegram. Many scams begin with casual introductions on Telegram. Always verify the identity of the counterparty by contacting the company directly through its official website or email.
🔹 Only use well-established OTC platforms. Avoid platforms with no track record or regulatory oversight. Escrow services should always be involved to ensure both parties fulfill their obligations.
🔹 Funds that cannot be withdrawn are not real. If an OTC platform shows a balance but does not allow withdrawals, assume it is a scam. Funds are only real when they can be accessed and transferred to a secure wallet.
🔹 Always conduct due diligence before OTC trades. Verify the legitimacy of both the counterparty and the trading platform. Confirm directly with the institution the buyer claims to represent before engaging in any transaction.
🔹 Escrow services are essential for large transactions. When dealing with high-value OTC trades, using a trusted third-party escrow service can prevent scams and ensure a secure exchange of funds.
Jumbo Blockchain’s Response and Next Steps
✅ Blocked fraudulent assets on-chain to prevent further misuse.
✅ Engaged BitMart’s legal team to recover lost funds.
✅ Investigating netxglobals.com for potential legal action and fraud reporting.
✅ Raising awareness in the crypto community to prevent similar scams.
This incident has strengthened our commitment to transparency and security. The industry needs stronger protections against OTC fraud, and education is one of the most effective ways to prevent these attacks.
Final Thoughts: Trust Must Be Earned, Not Assumed
This case is a reminder that trust in crypto transactions must be built through verification, not assumption.
Before engaging in any OTC deal, ask yourself the following:
✔️ Have I verified the counterparty’s identity with the company they claim to represent?
✔️ Is the OTC platform reputable and widely recognized?
✔️ Can I access and withdraw my funds before sending assets in return?
✔️ Am I being pressured to act quickly without proper verification?
Scammers rely on urgency and misplaced trust. Taking extra precautions can prevent significant losses.
Have you or someone you know encountered similar scams?
Share your experience in the comments to help protect the crypto community.
Resharing here the OTC Fraud Platform for a reminder to everyone:
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