In May 2025, the Crypto Assets sector witnessed another astonishing eyewash. The Aladdin project absconded with 7.6 billion in funding within just 3 months, affecting 500,000 investors. This incident not only exposed the vulnerabilities of the Crypto Assets market but also highlighted the urgent need for regulation.

The collapse of the Aladdin project began on March 10, when its LGNS token price plummeted from $82 to $15. Over the next two months, the project gradually fell apart and ultimately ceased operations completely on May 19, with a token market value of only $120,000.

The eyewash uses the so-called "four-step strangulation technique":

First, panic was created through the "three-level circuit breaker mechanism", leading to more than 60,000 investors suffering significant losses after margin calls.

Secondly, the project party falsely advertised "1 dollar no-risk bottom fund", while in reality, the reserves were severely insufficient, with only a small amount of stablecoin remaining before the collapse.

Third, a complex 15-level distribution system has been established, attracting a large number of participants. It is reported that in a certain team in Huizhou, Guangdong, the average loss per person exceeds 150,000.

Finally, before the project collapsed, 7.6 billion in funds was transferred to overseas casinos, resulting in an abnormal surge of capital inflow in the related regions.

The Aoladin case has typical characteristics of a Ponzi scheme: promising annual returns of up to 5000%, massively issuing tokens while continuously siphoning off funds, strictly controlling community opinion, restricting withdrawals without warning about risks.

This event once again reminds us that the regulatory difficulty of cross-border funding schemes is extremely high. According to statistics, 237 new types of pyramid schemes emerged in 2024. Most investors lack the necessary financial knowledge and are easily tempted by promises of high returns. Therefore, it becomes particularly important to establish a global regulatory coordination mechanism.

The rapid development of the virtual currency market has brought new challenges and opportunities. Investors need to stay vigilant and enhance their risk awareness; regulatory agencies should strengthen cross-border cooperation to jointly combat financial crimes and protect investors' interests. Only in this way can the healthy development of the Crypto Assets industry be promoted and the true value of its technological innovation be realized.