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- Waves and Vires Finance defrauded users of $500M through manipulative schemes and deceptive governance actions.
- Sasha Ivanov used $USDN to artificially pump $WAVES, causing massive losses and triggering a market collapse.
- The final rug pull by Sasha involved taking over user debts, with Alameda Research losing $90M, furthering the scandal.
WazzCrypto has recently highlighted a crypto fraud involving Waves and Vires Finance, two platforms that defrauded users of $500 million. This scam, one of the largest in crypto, largely went underreported. WazzCrypto’s tweet sheds light on how Waves’ founder, Sasha Ivanov, orchestrated multiple rug pulls to manipulate the market and enrich himself. These manipulations span across seven significant scams, each leaving users financially devastated.
At last someone goes after one of the biggest frauds of last cycle, who stole $500M from users on $WAVES
— Wazz (@WazzCrypto) November 11, 2024
Kinda sad I wasn't cited in the FTX / Alameda lawsuit against Sasha, it literally consumed months of my life reasearching and exposing this scam, but feel a little vindicated… https://t.co/KWLtgi4U2E pic.twitter.com/3KliHD69VH
The Series of Rug Pulls
In 2021, Vires Finance launched as a prominent Waves-based money market, attracting nearly $2 billion at its peak. The platform’s yield farming opportunities lured investors, but behind the scenes, things were much darker. Sasha leveraged an algorithmic stablecoin, $USDN, to manipulate the price of $WAVES.
This strategy involved borrowing USDT/USDC against $USDN collateral, pumping the price of $WAVES, and generating false yields. However, once users realized the manipulation, $WAVES plunged by 93%, resulting in a $500 million loss.
Consequently, users scrambled to recover their investments. This was only the beginning of Sasha’s fraudulent actions. Waves then introduced a governance proposal designed to liquidate short positions on $WAVES, forcing users to deposit more capital to avoid liquidation. Although the proposal was eventually blocked, the damage was done. Sasha secured a liquidity injection, and the Ponzi scheme continued.
Manipulation of Stablecoins and More Scams
Sasha’s scams didn’t stop there. He devised additional schemes, such as forcibly converting USDT/USDC into the unstable $USDN. Soon after, $USDN depegged, signaling the failure of his plan. Sasha then closed gateways, making it impossible for users to withdraw their funds. He also created new markets that were destined to be rugged. With promises of liquidity and stablecoins, Sasha manipulated markets and users, leaving investors with virtually worthless assets.
The final rug pull, labeled “The Grand Finale,” involved Sasha assuming outstanding debts and seizing valuable assets from users. This scam also affected Alameda Research, which lost $90 million, further tying Sasha to major crypto controversies.