USDOX.FUN Dismisses Allegations of Market Manipulation, Insolvency, and Extortion
Crypto Exchange OX.FUN Locked in Heated Dispute with JefeDAO
A firestorm of allegations has engulfed OX.FUN, a crypto derivatives exchange backed by Three Arrows Capital (3AC) co-founders Su Zhu and Kyle Davies.
The controversy erupted after OX.FUN froze $1 million in USDC deposited by JefeDAO on February 14, 2025, citing a violation of its Terms of Service. What began as an internal dispute quickly escalated into a public spectacle, with JefeDAO accusing the exchange of financial misconduct, possible insolvency, and extortion.
The allegations sent OX.FUN’s native token, OX, into a downward spiral, plummeting over 60% in 24 hours to $0.0053.
OX.FUN countered the claims, asserting that JefeDAO engaged in an “oracle manipulation attack” to distort market prices. According to OX.FUN, JefeDAO deposited $1 million in USDC and immediately began aggressively selling JAILSTOOL tokens to drive prices downward. Large limit orders were placed below the asset's fair price, and trades totaling $300,000 allegedly pushed JAILSTOOL below $0.04.
OX.FUN accused JefeDAO of profiting from the manipulated drop, violating the platform's Terms of Service, and harming other users. The decision to freeze JefeDAO’s funds ignited the public feud, drawing sharp reactions across the crypto community.
JefeDAO rejected the allegations, calling them baseless and accusing OX.FUN of fraud. He claimed that instead of returning the frozen $1 million, OX.FUN’s founder, known as “Nico,” proposed an alternative: JefeDAO would need to promote the exchange daily for six months in exchange for funds being released in $200,000 monthly increments.
Labeling this as "100% fraud" and "extortion," JefeDAO questioned the legitimacy of an exchange conditioning the return of user funds on social media promotion. He further accused OX.FUN of attempting to silence criticism while managing a deteriorating financial situation.
The insolvency rumors gained traction when reports surfaced of liquidity issues and mass withdrawals. A viral message from a former employee suggested that OX.FUN had only $180,000 available for withdrawals, raising concerns about its solvency.
On-chain analysis by Coinbase director Conor Grogan showed that OX.FUN held less than $1.7 million in non-OX assets. If the pending $1 million withdrawal request were honored, the platform would be left with just $1,000 in USDC. Gnosis safes linked to OX.FUN appeared nearly depleted, and blockchain activity suggested an urgent scramble for liquidity, with the exchange withdrawing funds from pools and selling SOL to acquire USDC.
Arkham Intelligence identified that nearly all of OX.FUN’s assets—$942,000 of its reported $972,000—were in OX tokens, further fueling concerns about its financial stability.
Despite the mounting scrutiny, OX.FUN denied insolvency claims, asserting that withdrawals were processing as usual. The broader crypto community remained skeptical, with many questioning the credibility of an exchange tied to Su Zhu, given his role in 3AC’s collapse. Analysts noted that oracle manipulation has been a persistent issue in crypto markets, with firms like Chainalysis highlighting its potential for artificially inflating trading volume. Supporters of OX.FUN argued that the accusations were exaggerated, while critics pointed to fraudulent behavior and opaque financial practices.
The exchange’s aggressive response to the controversy only intensified backlash. OX.FUN engaged in heated exchanges on social media, going as far as using derogatory language when responding to critics. When a user suggested JefeDAO’s actions were a form of arbitrage or hedging, the exchange reportedly dismissed the argument as "retarded," damaging its reputation further.
OX.FUN also accused JefeDAO of orchestrating a social media attack to force the release of frozen funds, stating, “Jefe is attempting to increase the pressure on social media to receive his proceeds from crime, these tactics will not work.”
As the dispute rages on, OX.FUN faces mounting legal and reputational challenges. With questions surrounding its solvency, alleged manipulation, and response to criticism, the exchange remains at the center of one of the most contentious crypto scandals in recent memory.
This article has been refined and enhanced by ChatGPT.
