OTC scam or memes? A $1.4 million loss causes confusion after Kucoin’s fund surface

A dispute with more than $1.4 million lost has grasped Crypto Twitter after traders allegedly scamned them in a commercial (OTC) contract. Another account was then posted about depositing the exact same amount on Kucoin.

The series of posts sparked confusion, doubt and speculation throughout the community.

$1.4 million fraud claim

The controversy began when trader 0x_leo_ shared the case in a post on X (Twitter) and asked for help from a blockchain detective like Zachxbt.

“…I just got a 1.4mil scam in an OTC transaction. They sent out money to Kucoin. Can anyone on their team block this address?

On-chain data shows a relocation of addresses 0x887E…D35260 to 0xD04D…41B8724 from 1.4 million USDC (≈$1.399 million). The transaction was successful at block 23493672 about five hours ago (at this time of writing), costing only $0.06.

He allegedly suffered a $1.4 million OTC transaction. Source: Etherscan

OTC transactions, or over-the-counter transactions, bypass exchanges and rely on direct trust between counterparties. In this case, trader 0x_leo_ claims he lost $1.4 million through such an arrangement, highlighting the limited risk of relying on a limited number of disputes when disputes arise in high-value peer-to-peer (P2P) crypto trading.

This statement has long been considered a risk, private P2P transactions carried out outside of exchange, given the lack of guarantees or enforcement mechanisms in the case of fraud.

The post circulated quickly, with followers urging Leo to share the wallet details and contact Kucoin’s support team directly.

A chance response or a trolling response?

Just two hours after the report, a kana trader using Based16Z on X (Twitter) posted a seemingly irrelevant but creepy timing message.

“We’ve just lost $1.4 million in Kucoin, what are we doing?” they cried.

The overlap in volume caused immediate speculation. Some users have suggested that it was a brave confession related to Leo’s lacking funds. Meanwhile, others dismissed it as a coincidence designed to stir up trolling or chaos and farm involvement.

The juxtaposition of two posts split the community. One camp was leaning towards viewing it as evidence of theft or gradual stunts, while another saw it as a typical Crypto Twitter theatre. In this area, irony, memes and misinformation are often blurred with actual financial interests.

Nevertheless, this episode highlights the persistent risks of OTC Crypto trading. Unlike centralized exchange transactions, OTC transactions rely solely on trust between counterparties.

This gives them a fertile basis for conflicts, fraud, and circumstances that little calls on public appeals against interactions like Zachxbt and blockchain detectives.

The timing of suspicious fraud and the claims for Kucoin deposits made the case particularly viral. But like many crypto controversies, clarity can be difficult to get through without verifiable on-chain evidence.

At press time, neither 0x_Leo_, Based16Z, nor Kucoin responded immediately to Beincrypto’s request for comment. However, Zachxbt told Beincrypto that he would not investigate the incident.

“I’m not considering this case,” Zachxbt said clearly.

Post-OTC scam or memes? After Kucoin’s fund surface first appeared on Beincrypto, a loss of $1.4 million has been confusing.