When magical realism becomes the norm, let's review the top ten most outrageous events in the Web3 industry in 2025.

By Eric, Forestight News

At the end of 2022, I reviewed the bizarre events that occurred that year. Three years later, I'm summarizing Web3 in 2025 in the same way.

Times have changed. Web3 in 2025 is completely different from what it was three years ago. Basic errors like misdirecting to the wrong address or setting incorrect parameters are now rare. Although what happened this year isn't as "funny" as it was back then, it's still just as outrageous. It just goes to show that human nature, the greatest screenwriter, is still putting its power to the test.

A mysterious team manipulated the presidential-themed Meme coin, reaping over $100 million.

Event Summary

At the beginning of the year, it was common knowledge that the newly elected US President Trump issued the Meme coin Trump. Subsequently, Trump's wife Melania and Argentine President Milley also promoted the MELANIA and LIBRA tokens related to them on their personal social media on January 20 and February 15, 2025, respectively (Milleey's tweet has been deleted).

There's not much to say about Michelle Trump issuing her own cryptocurrency. It's nothing new for the issuer to dump their holdings in the PvP Meme coin community, and everyone who lost money just accepted their bad luck.

Miley encountered a problem: within hours of LIBRA's token launch, the project team withdrew $87 million worth of USDC and SOL from the liquidity pool, causing the price to plummet by over 80%. This withdrawal from the pool was unacceptable to the P-side's supporters and sparked outrage. Miley deleted his tweets and launched an anti-corruption investigation after the incident escalated. Later, the community revealed KIP Protocol and Kelsier Ventures as the entities behind LIBRA. KIP Protocol claimed to be only responsible for technical oversight, while Hayden Davis of market maker Kelsier Ventures accused the presidential team of "changing their minds at the last minute," causing panic.

Subsequently, through rigorous on-chain fund flow analysis, Bubblemaps discovered that the deployment addresses of MELANIA and LIBRA were highly correlated with the same address, and were also involved in Rug Pull projects such as TRUST, KACY, and VIBES. LIBRA's market maker, Kelsier Ventures, has also been referred to by crypto KOLs as a "family-run criminal organization."

Furthermore, it was later revealed that there was an "insider" within the Millais government; a close associate of Millais received $5 million to facilitate the president's tweet promoting LIBRA. A few million dollars for over a hundred million—certainly a lucrative deal.

Reasons for selection

This may be the farce with the fewest words but the biggest story in this article. When capital and politics join forces to stage a blatant robbery, who can we still trust?

Outrageousness Index: ★★★★★

Infini employees embezzled nearly $50 million for cryptocurrency trading.

Event Summary

On February 24th, Beijing time, the stablecoin digital bank Infini was hacked, with $49.5 million flowing out of the Morpho MEVCapital Usual USDC Vault. Following the incident, Infini founder Christian immediately acknowledged the theft and promised a full refund even in the worst-case scenario.

Following this, the Infini team issued an on-chain appeal to the hackers, stating that they had obtained substantial information about them and would not pursue legal action if the hackers returned 80% of their funds (20% as a white-hat bounty). On February 26th, the Infini team issued an ultimatum on-chain, but the hackers remained inactive. The following day, Christian stated that a formal case had been filed in Hong Kong regarding the Infini hacking incident.

Less than a month later, Infini released the lawsuit documents, and the "hacker" who was the defendant was confirmed to be a highly capable developer on the Infini team, and was trusted by the team.

The tech engineer named Chen Shanxuan originally possessed the highest level of authority to manage company and client funds contracts. During the process of transferring authority after development was completed, which should have been done, he exploited the team's trust in him and secretly retained control of the contracts through an address under his control. Therefore, the so-called hacking incident was actually a farce of insider theft.

As for why this guy took such a risk, the Infini team stated that they only discovered Chen Shanxuan's gambling addiction after the theft occurred. Despite earning millions annually, he was still borrowing money everywhere to open contracts, and as his online loan debts piled up, he ultimately went down a path of no return. According to Colin Wu, Chen Shanxuan was previously considered a role model for sharing technical knowledge, making his current situation all the more regrettable.

Reasons for selection

Starting a business is different from investing. When it comes to moving from the lofty goal of "monetizing knowledge" to the practicalities of "getting down to earth," Web3 entrepreneurs still need to hone their skills. And one more thing: unless you're exceptionally gifted, don't touch contracts.

Outrageousness Index: ★

UMA (Ultra-Modified Oracle) users manipulate oracle results to forcibly "alter reality".

Event Summary

On March 25, 2025, Beijing time, an oracle attack occurred on Polymarket, which had become extremely popular due to the US presidential election. In the market for "Will Ukraine agree to Trump's mining deal before April?", as the deadline approached, the probability of "Yes" was close to 0, but on the evening of March 25, it suddenly reversed, and the probability of "Yes" rose directly to 100%.

The reason for the reversal wasn't that Zelensky gave in, but rather that a major UMA holder involved in this $7 million market forcibly altered the facts using his large holdings of UMA. User X, DeFiGuyLuke, explained the details (https://x.com/DeFiGuyLuke/status/1904804207452184622):

When Polymarket needs an event result, it first issues a data request. The proposer submits the data and pays a deposit of 750 USDC. After the request is submitted, there is a dispute period. If others disagree with the result, they can raise an objection and pay an equal deposit. Finally, all UMA holders vote to determine the result.

In the Ukraine mining deal market, a whale holding 5 million UMA tokens, seeing itself about to lose, voted against the outcome. This vote created a precedent, prompting ordinary users to fear being unable to fight the whale and thus join the vote, ultimately leading to this situation.

Polymarket later acknowledged it was a mistake but considered it part of the rules of the game and refused to change the result. In August 2025, UMA introduced a whitelist mechanism, allowing only entities approved by Polymarket to submit solutions to reduce malicious manipulation. However, this did not change the core oracle but rather optimized the governance process.

Reasons for selection

Can Polymarket's approach be considered a manifestation of decentralization? As a new generation of truth-revealing machine, ignoring the errors in oracle results should be seen as a flaw in product design.

Outrageousness Index: ★★★

The mystery of TUSD fund misappropriation: Was it a mistake or a deliberate act?

Event Summary

On April 3, 2025, Beijing time, Justin Sun held a press conference in Hong Kong, accusing First Digital Trust, a Hong Kong trust institution, of illegally transferring $456 million in TUSD reserve funds and demanding that relevant law enforcement agencies thoroughly investigate the matter. However, the Hong Kong court rejected Sun's request. Just a month earlier, the Dubai International Financial Centre Court (DIFC) issued a global freeze order, freezing $456 million in assets related to Techteryx, the issuer of the TrueUSD stablecoin. The court found evidence of a breach of trust and ordered a global freeze to protect the assets.

There are many conflicting accounts of the truth behind this matter, and there is no definitive conclusion yet. Here, I would like to provide some publicly available information.

Techteryx Ltd. (an investment company registered in the British Virgin Islands) acquired the TrueUSD stablecoin business at the end of 2020 and has since been responsible for its operation and management. Based on historical business continuity, TrueCoin, the original operator located in California, USA, was retained to continue managing reserves and handling banking-level execution and coordination. TrueCoin also selected First Digital Trust, a Hong Kong-based trust company, as the custodian of its reserves. Public information shows that Justin Sun is Techteryx's "Asian Market Advisor," but in DIFC documents and hearings in 2025, Sun was described as Techteryx's "ultimate beneficial owner." To some extent, Sun has control over Techteryx, but is not its apparent legal representative.

But this discrepancy between his outward appearance and his inner self foreshadowed what would happen later. From Sun Yuchen's perspective, the matter unfolded as follows:

From 2021 to 2022, TrueCoin, acting as trustee, established close ties with some management teams of FDT and Legacy Trust, both Hong Kong-based trust institutions it had selected, and formed a covert channel for capital outflow with Aria Commodity Finance Fund (ACFF), a Cayman Islands-registered fund. Justin Sun stated, "Having obtained control of reserve instructions and fund flows, they forged documents and fabricated investment instructions without authorization, and repeatedly submitted materials containing false statements to banks."

Court evidence shows that instead of depositing the reserves into the compliant Cayman Islands-registered fund ACFF as agreed, the two parties illegally transferred up to $456 million in fiat currency reserves in batches to Aria DMCC, a company in Dubai. Aria DMCC is a wholly privately owned company established in Dubai by the wife of Matthew Brittain, a British citizen and the actual controller of ACFF. Aria DMCC was not an authorized investment target of Techteryx.

In short, Justin Sun believes that Techteryx demanded that FDT transfer reserve funds to ACFF, but FDT transferred the money to Aria DMCC instead, which constitutes misappropriation of funds.

But from FDT's perspective, this is how it works:

Lorraine, an "authorized representative" of Techteryx, requested FDT to transfer reserve funds to ACFF. FDT, believing it had not received such a request from the actual controller of Techteryx and distrusting the representative, did not transfer the funds to ACFF but instead transferred them to Aria DMCC (I don't understand the logic behind this either; the two companies are actually closely related, but FDT did not elaborate). FDT also stated that the current fund allocation would still generate returns.

The key point is that FDT believes they have never misappropriated these funds and can get them back as long as the actual controller of Techteryx gives the order. The crucial point is that you have to prove you are the actual controller of Techteryx.

There are two ways to recover the $456 million: either the publicly known actual controller of Techteryx, through KYC verification, must step in and demand that FDT return the funds; or, if no such person exists, it needs to be proven that FDT's actions were illegal or irregular, thus requiring the court to order FDT to withdraw the funds. However, given Justin Sun's special status, only the latter approach can be used.

The most interesting thing about this incident is that during an online court hearing about Techteryx, which Sun Yuchen did not attend because he claimed he was not the legal representative of Techteryx, a person named Bob suddenly appeared. The judge then asked him to turn on his camera, and when the camera was turned on, Bob turned out to be Sun Yuchen.

This behavior sparked speculation within the community: even if FDT did not transfer money according to regulations, Justin Sun's refusal to serve as the official legal representative of Techteryx, and his apparent avoidance of legal responsibility, led many to question whether funds had indeed been misappropriated. Many also joked that it was finally Justin Sun's turn to fight for his rights.

Reasons for selection

It's possible that FDT misappropriated funds through murky relationships, or perhaps, as they claim, they did so for the sake of fund security. We can only wait for the final outcome. Life is unpredictable; sometimes, cleverness backfires.

Outrageousness Index: ★★★★

Zerebro co-founder Jeffy's "fake death" controversy

Event Summary

On May 4, 2025, Beijing time, 22-year-old Zerebro co-founder Jeffy Yu held a live stream on the pump.fun platform. However, several community users claimed that "Jeffy Yu committed suicide during the live stream. After Jeffy finished smoking a cigarette, he pointed a gun at his neck and pulled the trigger. Then the screen went silent."

The video quickly spread on Twitter, and many community users expressed their regret. However, since the authenticity of the video has not been confirmed, some users have begun to question whether it is a marketing gimmick.

One reason for the skepticism is that Jeffy Yu published an article about "Legacoin" before the live stream. In the article, Jeffy proposed the concept of "Legacoin" (derived from "legacy memecoin"), the core of which is that developers promise to only buy and not sell related assets, and permanently lock them on the blockchain after their death, thereby achieving "the eternal existence of digital heritage." On the very day of the live stream, a token named LLJEFFY was listed on the pump.fun platform.

On May 5th, the obituary platform Legacy posted a notice about Jeffy Yu's passing. Although it did not name him, the community generally assumed that this Jeffy Yu was the co-founder of Zerebro. The following day, Jeffy Yu's Mirror account also saw an article automatically published under certain conditions, with the classic line, "If you see this article, it means I am already dead..."

Besides this classic opening, the article also includes "Legacoin," codenamed LLJEFFY, which Jeffy Yu calls his final work of art, and Jeffy's expression of his aversion to money: "Once I became a little rich and a little famous online, everything that made sense collapsed—friends, family, romantic relationships, co-founders. Everything became impure."

Amidst the initial shock, a dramatic turn of events occurred when KOL Irene Zhao and DeFi developer Daniele exposed Jeffy's "fake death plan." According to a leaked letter, Jeffy claimed he had been subjected to long-term harassment and telemarketing fraud by a former partner, and was subsequently targeted and blackmailed by another individual. In the letter, Jeffy stated that his personal address and phone number were frequently published, seriously endangering his personal safety. These malicious acts were also interspersed with hate speech targeting his race, gender identity, and personal achievements.

Although Jeffy wanted to withdraw directly, he worried that a public announcement would cause a price crash and lead to even more serious consequences, so he chose to stage a "death act" to fade from public view. Afterwards, Lookonchain discovered that on May 7th, a wallet possibly associated with Jeffy Yu sold 35.55 million ZEREBRO for 8,572 SOL (approximately $1.27 million), subsequently transferring 7,100 SOL (approximately $1.06 million) to the LLJEFFY developer wallet (an address starting with G5sjgj). Therefore, it's unclear whether Jeffy was genuinely scared and wanted to leave by faking his death, or simply wanted to cash out and disappear more safely.

Reasons for selection

Betrayal and threats are nothing new in the business world. When you participate in a gamble with no guarantees, you should know that it's a game where life and death are in the hands of fate, and wealth and honor are determined by destiny.

Outrageousness Index: ★★★

Sui's "freezing" of hacker funds sparks discussion on "centralization issues".

Event Summary

On May 22, 2025, Beijing time, Cetus, the largest DEX on Sui, was hacked by attackers who fabricated liquidity and stole $223 million due to a code issue with numerical precision. Just two hours after the theft, Cetus announced that it had frozen $162 million of the stolen funds.

Regarding how the funds were "frozen," Sui's official Chinese account explained: Sui requires a 2/3 majority vote from nodes for a transaction to be executed. Therefore, in this instance, 2/3 of the nodes in the Sui network selectively ignored the transaction from the hacker's address, preventing the hacker from transferring these funds. Besides the approximately $60 million worth of funds transferred to Ethereum, the hacker's assets left on Sui were directly intercepted and held on the network by the nodes.

So how can the stolen funds be recovered? Solayer engineer Chaofan stated that the Sui team has been requesting every validator on Sui to deploy a patch code so that they can "recover" the money without the attacker signing it. However, Sui validators have reported that they have not received this "request," and Chaofan later confirmed that Sui validators have not yet deployed the relevant code.

Reasons for selection

Discussing centralization versus decentralization here is not very meaningful. What we really want to ask is, if I transfer funds to the wrong account on Sui, will Sui help me recover them in the same way? This is perhaps a more worthwhile question to consider after making an "exception".

Outrageousness Index: ☆

Conflux's "reverse takeover" failed.

Event Summary

On July 1, 2025, Beijing time, Leading Pharmaceuticals Biotechnology Co., Ltd., a Hong Kong-listed company, announced that it had signed a memorandum of understanding with Northwestern Foundation (the seller) and Conflux regarding a potential acquisition of all equity interests in the target company, contingent upon the target company completing the acquisition of Conflux assets in accordance with its agreement with Leading Pharmaceuticals Biotechnology Co., Ltd. The Conflux assets are certain assets related to the Conflux blockchain and related technologies and/or the Conflux business, which will be determined by Leading Pharmaceuticals Biotechnology Co., Ltd.

It sounds a bit convoluted, but simply put, Conflux wanted to achieve a reverse takeover. Why reverse? Because a reverse takeover usually involves the company wanting to go public acquiring the listed company, but Conflux did the opposite.

Some might ask, why do you consider this a backdoor listing rather than a simple acquisition? Because as early as the beginning of April, Leading Pharmaceuticals announced that Dr. Long Fan and Dr. Wu Ming had become executive directors of the company, and these two are the founders of Conflux. On August 21, Leading Pharmaceuticals announced its plan to issue 145 million placement shares to raise HK$58.825 million. The company intends to use all the net proceeds from the placement to fund the group's development of its blockchain technology business. Then, at the end of September, Leading Pharmaceuticals Biotechnology changed its name to Xingtai Chain Group.

Theoretically, riding the wave of Web3, the stock price should have taken off. The good news is that it did indeed take off for a while; the bad news is that it subsequently plummeted. On September 12th, the plan to raise nearly 60 million yuan fell through because certain conditions couldn't be met before September 11th, causing a sharp drop in the stock price. After the name change at the end of September, the stock price fell even more drastically…

Prior to the market opening on November 17, 2025, Starlink announced that it had been ordered by the Hong Kong Stock Exchange to suspend trading on November 26 because the Stock Exchange questioned the company's failure to meet its continuing listing requirements.

Reasons for selection

The Hong Kong Stock Exchange's decision to suspend trading on the grounds of "failure to meet continuing listing requirements" is already quite lenient. Although Hong Kong does strongly support the development of Web3, such behavior does give the impression of treating everyone else like fools.

Outrageousness Index: ★★★★

"Returning to China next week"—Accountant Jia is now swindling money from the cryptocurrency world.

Event Summary

On August 17, 2025, Beijing time, Faraday Future (FF), the electric vehicle company under Jia Yueting, which had a quarterly revenue of tens of thousands of US dollars and a net loss of hundreds of millions, announced the launch of the "C10 Index" and the "C10 Treasury" product based on the index, officially entering the field of crypto assets.

The C10 Index tracks the world's top ten cryptocurrencies (excluding stablecoins), including mainstream assets such as Bitcoin, Ethereum, and Solana. C10 Treasury employs an 80% passive + 20% active investment model to ensure sustainable returns. According to its official website, FF will use dedicated funding to specifically purchase crypto assets; that is, FF will raise funds from the market and use those funds to buy crypto assets. The first phase goal is to purchase $500 million to $1 billion in crypto assets after obtaining the necessary funds, with the initial allocation of $30 million expected to launch as early as this week. The long-term vision is to expand to a scale of $10 billion, achieving compound growth through staking yields.

After the official announcement, Jia Yueting unsurprisingly secured funding. He even invested $30 million in Qualigen Therapeutics, Inc. through Faraday Future to help the company transition to crypto assets, with Jia Yueting personally serving as an advisor.

Not long ago, Jia Yueting even announced a partnership with Tesla, allowing Faraday Future's new models to directly access Tesla's Supercharger network. He later even posted that he was willing to cooperate fully with Tesla on FSD technology.

Reasons for selection

All I can say is that Accountant Jia is really something, something that most people can't learn. I'm not giving this a five-star rating just to save face for Mi Lai.

Outrageousness Index: ★★★★☆

The USDX project team "borrowed money to cash out," and the founder has a "remarkable track record."

Event Summary

On November 5, 2025, Beijing time, after xUSD suffered huge losses due to a third-party "curator", a user named 0xLoki discovered that the stablecoins used to mint sUSDX could be redeemed after only one day, but an address ignored the annualized interest rate of over 30% and drained all the pools on Euler that could use USDX and sUSDX as collateral to borrow other stablecoins.

USDX is issued by usdx.money, a project that announced at the end of last year that it had completed a $45 million funding round at a valuation of $275 million. The mechanism of USDX is almost identical to USDe, the only difference being that USDX also implements a Delta-neutral strategy on altcoins, which, in the words of the project team, is to obtain higher returns.

My investigation revealed two suspicious addresses that began receiving large amounts of USDX and sUSDX in late October. These addresses then used lending and DEX trading to drain liquidity from all on-chain liquidity channels, leaving many lending platforms with bad debts. As mentioned earlier, this stablecoin should have allowed for redemption of the original USDT investment within just one day.

Even more alarming is that one of the two suspicious addresses is directly linked to Flex Yang, the founder of usdx.money, the issuer of USDX. If even the founder is rushing to cash out, is there any other explanation besides the project already having problems? On the very night this article was published, USDX began to experience severe de-pegging, confirming the assertion that the project was indeed in trouble. Then, on November 8th, Stables Labs tweeted that it would assist affected users based on its existing resources and opened a registration channel. However, this was Stables Labs' last tweet to date, and the actual progress remains unknown.

Digging deeper, Flex Yang is also the founder of PayPal Finance and HOPE. PayPal, like many other institutions, encountered insolvency during the 2022 bear market and subsequently entered a long restructuring process, its future remaining uncertain to this day. As for HOPE, it suffered a setback after its lending products were attacked. Although it didn't actually abscond, it gradually faded from the market.

Reasons for selection

The biggest lesson we learn from history is that we never learn from it. An entrepreneur repeatedly fails but keeps trying, yet numerous risk control problems arise. Is he truly being targeted, or is it an inside job?

Outrageousness Index: ★★★

Berachain offered venture capitalists a "full price exit" clause.

Event Summary

According to Unchained, on November 25th Beijing time, documents disclosed by the company show that Layer 1 project Berachain offered a special refund clause to Brevan Howard's Nova Digital fund during its Series B funding round, making the latter's $25 million investment almost "risk-free".

In a subsequent response, Berachain co-founder Smokey the Bera denied the accuracy of the report, emphasizing that Brevan Howard remains one of the project's largest investors. He stated that his investment involves multiple complex business agreements, and that Nova Digital's terms were designed to protect against token launch failures. Berachain mentioned that Nova Fund proactively approached them before the funding round and offered to lead it, and that their investment was based on uniform terms. Furthermore, the controversial appendix was to meet the requirements of Nova's compliance team, not to ensure the investment principal was protected from market losses. Brevan Howard remains one of Berachain's largest token holders and has continued to increase his BRA holdings during market volatility, contrary to reports suggesting he has exited the market.

According to disclosed documents, Nova Digital invested $25 million in Berachain in March 2024, purchasing BERA tokens at $3 each. As a co-lead investor in the Series B funding round, the fund obtained the right to a full refund within one year of TGE through a side agreement signed on March 5, 2024. This means that if the BERA token price performs poorly, Nova Digital can demand a full refund of its investment from Berachain by February 6, 2026.

Another point of contention is whether Berachain should have disclosed this specific clause to other Series B investors. Two anonymous Series B investors stated that the project team did not inform them that Nova Digital had a refund right. Lawyers point out that this could violate the disclosure requirements for "material information" under securities laws.

Reasons for selection

If Berachain's shady dealings are true, it's essentially a publicity stunt using Nova Digital's reputation, no different from fraud. So, do you still naively believe that Web3 shouldn't be subject to strict regulation?

Outrageousness Index: ★★★