Uniswap Asia lured Chinese investors with parties, dancers, and an airdrop — it was all fake

• Venture pretending to be decentralised exchange in China trotted out bogus CEO before abruptly shutting down.
• Uniswap founder Hayden Adams said ersatz company had nothing to do with the real exchange.
• Fake company claimed it was hacked and then pulled plug on Telegram group with 38,000 members.

The video opens with dramatic music as businessmen in suits walk down a red carpet. Smiling and waving, they walk through a large gala room filled with huge white tables. People clap as they pass.

The footage cuts to a line of people standing on a stage decorated in pink and purple. Another cut, and they’re giving presentations and speeches. A singer gives a performance.

This is the launch of Uniswap Asia in China in May. It looks slick. Attendees proudly shout the project’s slogans. The decentralised exchange’s logo is everywhere. The executives have flown in from America.

Except they haven’t. Uniswap’s chief Hayden Adams has said he’s never heard of these people.

Unwitting investors

Variations of these scenes have played out over and over again across China in recent months. These events have attracted hundreds of people, many of them middle aged and elderly.

Uniswap Asia, which later changed its name to Unifi, is a group in China pretending to be affiliated with Uniswap and luring unwitting investors into liquidity pools through its app.

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In the last few weeks, the team behind the fake Uniswap project has been encouraging people to invest more money into their scheme. An airdrop was coming, they said, and they planned to do a snapshot of people’s accounts to determine how many new tokens they’d get.

Now, it’s all disappeared.

“I regret to inform members of the community that at 03:47 Hong Kong time on July 12, 2023, the platform authorisation contract and Uniswap widget were hacked,” the enterprise wrote last week on its website.

Heavy losses

The alleged hack didn’t stop them continuing to promote the project the following day, sharing videos from recent events.

Yet Unifi claimed it had suffered heavy losses and would suspend operations on July 14 to work on a community compensation plan. It hasn’t shared any updates since. It deleted its chat logs on Telegram and changed the settings on the group so its 38,000 members can’t post on it.

Crypto investors are no stranger to hacks or scams.

But the audacity of Unifi and its gala dinner roadshow, foreign actors and bizarre dance routines made it stand out.

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On July 13 – the day following the hack – Unifi’s widget was no longer accessible online. Instead the home screen was replaced with a message telling users that it was down for maintenance and would be reopening soon.

When community members started to question Unifi’s version of events regarding the hack, it deleted its chat logs and changed the settings of the group so that only admins could send messages. Subsequent messages are now set to delete after 24 hours. Nothing has been posted since July 14.

It’s not clear how much money Unifi made from the scheme.

Unifi went to great lengths to appear legitimate. It used the logo and branding of Uniswap, the biggest decentralised cryptocurrency exchange with deposits of $3.8bn, according to DefiLlama.

Hayden Adams, the founder and CEO of the DeFi unicorn, said on June 2 that he “had no idea who these people are” and they were “def not associated with Uniswap.”

Foreign actors

The scheme used foreign actors to pose as executives from Uniswap, according to a recording of a meeting available online. In one video, “Mike Hanlon” introduced himself as the CEO of Uniswap, Adams’ actual title.

“We have successfully established around the world a multilingual community organisation. The establishment of the Asian community this time will be a new milestone in the development of an entire Uniswap,” Hanlon told attendees.

Hiring foreigners in China to pretend to be businessmen is an established practice. In addition to impersonating businessmen, foreigners can also earn cash posing as someone’s significant other or even attending weddings and funerals.

Unifi said it still plans to compensate community members’ losses through the airdrop of a new token called UNIFI that it created earlier this week.

The contract creator received 0.1 Ether from another address for gas fees to create the token. This address was in turn funded by an address with ties to a payout from coin mixer Tornado Cash.

Despite a cryptocurrency ban in China, interest in investing remains.

With Hong Kong relaxing crypto trading laws, some from the mainland have even been travelling to the city to exchange wads of cash at crypto exchange shops.

However, restrictions on trading in China itself mean people can be vulnerable to scams like this — and often have few options for recourse when they realise they have been duped.

Have a tip on crypto in China? Contact me at callan@dlnews.com.