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OX.FUN, a hybrid perps crypto exchange backed by co-founders of the failed Three Arrows Capital hedge fund, is under scrutiny as data suggests it holds mostly its own OX token.

Gamified crypto derivatives exchange OX.FUN, which lists Three Arrows Capital co-founder Su Zhu as its advisor, is firing back against accusations of its insolvency, saying in an X post that NFT artist JefeDAO is attempting “a social media campaign” in a bid to trigger a “coordinated FUD.”

In an X post on Feb. 24, OX.FUN denied insolvency claims, stating that “all withdrawals are processing normally.” The exchange also accused JefeDAO of attempting to exploit the platform, saying his funds were frozen due to violations of its terms of service.

The dispute started when JefeDAO claimed one of its members deposited $1 million in USD Coin (USDC) into OX.FUN but was later unable to withdraw funds. OX.FUN’s founder, Nicolas Bayle, shortly after took to X to say that JefeDAO engaged in an “oracle manipulation attack,” placing large limit orders below fair market prices and closing short positions at lower levels.

However, JefeDAO refuted the allegations. The artist also claimed that Bayle offered to return the funds in exchange for daily social media promotion of the platform.

“I literally know this is 100% fraud just based on the fact that it is highly unusual and suspicious for an exchange to request the promotion of their social media accounts as a condition to return someone’s funds.”

JefeDAO

Coinbase’s head of product Conor Grogan suggested in an X thread that OX.FUN’s wallets mostly hold its own OX tokens. He added that if the platform processes a pending $1 million USDC withdrawal, its USDC balance would drop to around $1,000.