Web3 in 2025: The Nova Incident and a Review of the Top 10 Bizarre Events

The Web3 industry in 2025 can no longer be summarized with the word “magical.” From political upheavals to bizarre financing phenomena, from technical vulnerabilities to internal corruption, the series of events that unfolded this year not only rewrote the industry’s narrative but also profoundly exposed systemic flaws in governance, regulation, and risk management within Web3. Among these, the highly scrutinized nova incident became a typical example of transparency issues in fundraising.

The “Open Looting” Controversy of Trump Meme Coins

At the beginning of the year, Trump’s TRUMP Meme coin ignited the market, followed by his wife Melania and Argentine President Milei launching related tokens. However, behind the seemingly glamorous scene was a meticulously planned large-scale scam.

According to analysis by on-chain data tracking firm Bubblemaps, the deployment addresses of MELANIA and LIBRA point to the same behind-the-scenes manipulator. Even more shocking, this mysterious team also participated in confirmed Rug Pull projects like TRUST, KACY, VIBES, and others. When Milei announced LIBRA, the project team immediately withdrew $87 million from the liquidity pool, causing the coin price to plummet over 80%.

The most dramatic twist came during subsequent investigations—inside Milei’s government, reports surfaced that high-ranking officials received a $5 million bribe to promote this token. Exchanging $5 million for a harvest exceeding $100 million, the math speaks for itself. Once, “open looting” only existed in novels; now, it has become a routine operation in Web3.

Absurdity Index: ★★★★★

The Truth Behind Infini’s “Hacker”: The Price of Trust

In late February, Infini, claiming to be a professional stablecoin digital bank, suffered a “hacker attack,” with $49.5 million of customer funds instantly disappearing. Founder Christian immediately stepped forward promising full compensation, even publicly calling out the hacker on-chain and offering an enticing “80% return and forgiveness.”

However, as investigations deepened, the truth emerged—what was called a “hacker” was actually a highly trusted technical engineer within the Infini team, Chen Shanxuan. This developer was supposed to transfer control of the smart contract after project launch but secretly retained a backdoor out of personal interest.

Why would a high-earning engineer risk everything? The team later discovered that Chen Shanxuan was addicted to gambling and contract trading, heavily in debt, and ultimately resorted to theft out of desperation. This story reflects multiple issues in the Web3 entrepreneurial ecosystem: high salaries cannot offset human greed, and systemic vulnerabilities often stem from over-trusting human nature.

Absurdity Index: ★☆

Oracle “Kidnapped” by Whales: The Trap of Polymarket’s Truth

In March 2025, Polymarket, hailed as a democratic prediction tool, staged an absurd drama. In the $7 million market “Will Ukraine agree to the Trump mineral agreement before April,” a whale holding 5 million UMA tokens, seeing impending losses, forcibly manipulated the governance vote to declare the incorrect outcome as “correct.”

The cleverness of this move lies in—after the whale cast such a massive UMA vote, ordinary users, worried about being unable to oppose, followed suit, creating a “majority violence” scenario. At this point, false data became the “truth.” The Polymarket team later admitted this was part of the game rules and refused to change the outcome.

If oracles are the “truth machines” of Web3, then Polymarket’s manipulation undoubtedly exposes this lie. Distributed does not mean immune to manipulation; decentralization can also devolve into “whale centralization.”

Absurdity Index: ★★★

The Mysterious Case of TUSD: The $456 Million “Misappropriation” Scandal

In April, Justin Sun held a press conference in Hong Kong, accusing the trust institution First Digital Trust of illegally misappropriating $456 million of TUSD reserves. At the same time, the Dubai International Financial Centre Court issued a global freeze order.

The bizarre part lies in the ambiguous identities involved. Justin Sun was publicly described as the “Asia Market Advisor” for TUSD issuer Techteryx, yet court documents labeled him as the “ultimate beneficial owner.” This inconsistency foreshadowed subsequent legal entanglements.

According to Sun’s allegations, First Digital Trust received false instructions to transfer funds to a Dubai-based company Aria DMCC with personal ties to the involved parties, instead of the compliant Cayman fund ACFF. The trust’s response was—“We did receive instructions, but we didn’t believe the signer’s true identity, so we transferred the money to a ‘safer’ place” (a highly fantastical logic).

Even more dramatic, during an online court hearing without Sun Sun’s participation, a mysterious person using the pseudonym “Bob” suddenly appeared. When the judge asked to turn on the camera, “Bob” turned out to be Sun Sun himself. This act of attending court under a false identity immediately sparked public suspicion—was First Digital Trust stealing, or was Sun Sun attempting some legal workaround?

Absurdity Index: ★★★★

Zerebro’s “Fake Death” Marketing: The Art of Exit

In early May, 22-year-old Zerebro co-founder Jeffy Yu staged a “suicide show” during a live stream, after which the scene fell into silence. The entire crypto community was stunned, many expressing regret.

But soon, doubts arose. The strange part of the timeline was that—Jeffy had previously published a conceptual article about “Legacy Coin,” claiming its core value was to be permanently locked after the founder’s death. On the same day, the LLJEFFY token officially launched.

On May 5th, the obituary platform Legacy published a death notice. The next day, Jeffy’s Mirror account automatically posted an article titled “If you see this, it means I am dead.” The plot twist came in August—KOLs and DeFi developers exposed the details of the “fake death plan.”

Leaked emails revealed that Jeffy had suffered long-term harassment, telecom scams, and extortion, with personal information repeatedly exposed, leaving him exhausted. He initially wanted to announce his exit directly but feared a sharp drop in token price would cause worse consequences, so he chose the extreme method of “faking death” to fade away.

Interestingly, Lookonchain later found a suspicious wallet that sold 35.55 million ZEREBRO tokens on May 7, earning $1.27 million, most of which was transferred to the LLJEFFY developer account. Was this a carefully planned exit, or was he pushed to the brink? Opinions vary.

Absurdity Index: ★★★

Sui’s “Freeze Gate”: The Dilemma of Centralization

In late May, Sui’s largest DEX, Cetus, was attacked due to a code vulnerability, with $223 million stolen. Sui’s response redefined the understanding of “decentralization”—by voting with 2/3 of nodes to reject the hacker’s transactions, they forcibly “frozen” the stolen $162 million within the network.

The official explanation was: “This is normal operation of DPoS consensus.” But this raised a deeper question—if Sui can freeze funds due to a “hacker attack,” would Sui also freeze my mistaken transfer? If not, what is the logic behind this “selective freezing”?

The so-called “special rescue” often exposes the system’s fragility and arbitrary power.

Absurdity Index: ☆

Conflux’s “Reverse Backdoor” Scandal

In July, Hong Kong-listed company “Linghang Medical Biotechnology” announced potential acquisition negotiations with Conflux, ostensibly as the latter being acquired by the former. In reality, Conflux’s founder had already joined the company as an executive director. This is a vivid example of the traditional reverse backdoor listing method applied in Web3.

The fundraising plan initially went smoothly, and the company even rebranded as “Xingtai Chain Group,” seemingly ready to soar on the Web3 wave. But reality quickly dashed expectations—the funding plan failed to meet conditions, and the stock price plummeted. By November, HKEX issued a suspension order citing “failure to meet continued listing requirements.”

This incident reflects that even in the eyes of the Hong Kong Stock Exchange, which claims to support Web3 development, such blatant “money-raising” maneuvers are still unacceptable.

Absurdity Index: ★★★★

Jia Yueteng’s New Chapter in Crypto

When it comes to wealth creation stories, one cannot ignore the “legendary” Jia Yueteng. In August 2025, this “dreamer” known for “returning to China next week” officially announced Faraday Future (FF) entering the crypto space, launching the “C10 Treasury” product, and successfully raising funds.

The C10 index tracks the top ten cryptocurrencies worldwide, and FF aims to raise $500 million to $1 billion in crypto assets, eventually expanding to a $10 billion scale. After the fundraising announcement, Jia not only secured the funds smoothly but also invested in other enterprises’ crypto transformations.

Recently, Jia Yueteng announced a partnership with Tesla and expressed willingness to cooperate fully on FSD technology. Each time, this entrepreneur finds new financing opportunities through edge exploration.

Absurdity Index: ★★★★☆

USDX’s Exit Trap

In early November, the stablecoin USDX experienced a severe de-pegging. Deep investigation revealed that founder Flex Yang’s related address, before the incident, had been heavily borrowing other stablecoins via collateralized loans to cash out on a large scale.

Interestingly, Flex Yang also has two other “notable achievements”—he is the founder of PayPal Finance and HOPE projects. PayPal faced insolvency during the 2022 bear market and is still in a long restructuring process; HOPE suffered a setback after a lending product was attacked.

This serial entrepreneur seems to have formed a certain “pattern”—when a project encounters problems, the founder prioritizes cashing out. The biggest lesson from history is that people never learn from history.

Absurdity Index: ★★★

Berachain’s nova Incident: The Black Box of Funding Terms

At the end of November, according to Unchained, Layer1 project Berachain offered a highly controversial special term—“Original Price Refund Right”—to the well-known hedge fund Nova Digital under Brevan Howard during Series B funding.

This side agreement meant that Nova Digital’s $25 million investment was nearly risk-free. According to the clause, even if BERA tokens performed poorly after launch, Nova Digital could demand a refund at the original price before February 2026. It was like giving a top-tier fund an “insurance.”

More critically, when Berachain sought funding from other Series B investors, it did not disclose this special clause. Several anonymous investors claimed they were unaware. If true, Berachain might have violated securities law’s “material information disclosure” requirements—this is the core controversy of the nova incident.

Berachain’s co-founders later responded, claiming Nova Digital approached them proactively and proposed leading the investment, and that the clause was designed to prevent token launch failure. Regardless of purpose, offering non-equivalent terms to some investors without full disclosure raises serious questions.

The emergence of the nova incident again reminds the Web3 investment and financing market—transparency issues have become industry pain points. When the primary market is full of information asymmetry and rent-seeking, it is no surprise that the secondary market is chaotic.

Absurdity Index: ★★★

Reflection and Lessons

Looking back at these ten events, what can we see? From fraud and manipulation to governance failures, Web3 in 2025 continues to interpret what “magical realism” means through a series of bizarre incidents.

But the common thread among these events is clear—the regulatory framework, risk management system, and information disclosure mechanisms of Web3 are still far behind the industry’s rapid development. The transparency issues exposed by the nova fundraising scandal, the internal governance problems reflected in USDX, the protocol design flaws highlighted by Polymarket… these are not isolated cases but systemic risk signals.

Perhaps, embracing stricter regulation is no longer a “traitor” act for Web3 but a necessary step toward maturity.