How Venom Foundation launched a copycat scam NFT project

Here we go again. Another day, another negative report that further exposes Venom Foundation’s utter shadiness. If you remember, last year, we wrote two exclusive reports on the company that detailed its inside operations and the alleged notorious secret founder, Alibek Issaev.

And now, we have been approached by Venom Punks, the first-ever NFT project on the Venom network with yet another inside look at Venom Foundation, its centralization and fraud, the team that initially founded the project, and why the current team wants nothing to do with the foundation anymore.

The beginning

The journey of Venom Punks began with high hopes in late 2022, when the team behind the project first explored the potential of the Venom blockchain. Envisioned as a platform that supported fair competition and innovation, Venom initially attracted Venom Punks with its promise of decentralization and support for developers. However, the reality they encountered was starkly different because Venom Foundation operates in a very centralized manner.

As Venom Punks set out to develop their project, which included launching several dApps like VenomSea and Wrapped Venom Station, they noticed a troubling pattern. Another project, venom-punks.com, not only mirrored their initiatives but also seemed to receive undue support from the Venom Foundation. This copycat project was reportedly backed by the foundation to the extent that it overshadowed the original efforts of Venom Punks.

“Venom Foundation seems more like a centralized chain, run like a family business. This setup could favor family, friends, and relatives, giving them advantages over other builders. For builders not close to the Venom Team, this means limited success chances.“

Venom Punks

Venom Punks set up accounts on Discord, Twitter, and launched its domain in January of 2023. Venom Punks said they reported the scam collection in May of the same year after thorough research, and decided to take a stand and expose what they described as fraudulent activities by the Venom Foundation.

They revealed that venom-punks.com, despite its lack of originality, thrived with direct foundation support, overshadowing Venom Punks’ genuine efforts. The climax of their accusations pointed to a possible collusion between the foundation and venom-punks.com to clone Venom Punks’ original NFT designs and concepts. Venom Foundation’s current CEO Christopher Louis Tsu even went on Twitter to publicly endorse the scam collection.

I like the taste of Mint, I love the sound of punk rock
🎸 https://t.co/4cdgSrsOZK https://t.co/bSqjw5resF

— Christopher Louis Tsu (@louis_tsu) April 4, 2024

A major turning point occurred when Slava Semenchuk, known by his Discord username Venominator, joined the Venom Punks Discord server on March 30 this year. His alleged intention was to defend venom-punks.com.

Semenchuk tried to portray the project as legitimate and gain from the original Venom Punks’ popularity, presenting himself as an innocent party caught in a misunderstanding. However, his presence and actions quickly raised suspicions among the vigilant Venom Punks community.

The Venom Punks team, equipped with solid evidence of the deceptive practices of venom-punks.com, confronted Semenchuk, who found himself unable to substantiate his claims and eventually left the server. His departure was not quiet, though.

He inadvertently confirmed the suspicions of many by exposing a direct link between the scam project and the Venom Foundation.

The clone war

The association between the scam project and Venom Foundation was confirmed by Venom Punks through multiple channels, including public discussions and promotional materials where the foundation’s support for the clone project was openly acknowledged.

These actions raised serious ethical questions. Was the foundation’s involvement a calculated move to push out the original innovators in favor of a controlled, less threatening project that they could manipulate? After all, they’re not really decentralized.

The extent of the foundation’s duplicity became clearer through the actions of the clone project’s founder. Not only did he launch a project with the same name, but he also engaged in misleading marketing tactics and false advertising, including offering nonexistent features and promotions to attract users.

When these deceitful strategies were brought to light, rather than retracting or apologizing, he doubled down, attempting to cover his tracks and continue his deceptive practices. These practices included the abrupt removal of outrageous offers, like a supposed trip to Dubai, from their website when they were called out for being unrealistic.

Moreover, the clone project’s readiness to launch on the same day as the original Venom Punks’ minting phase, as revealed by their conflicting mint date announcements, was a direct attack aimed at diverting traffic and sales from the original to the clone.

A tense moment came when CEO Christopher unintentionally acknowledged the legitimate VenomPunks.com in a public response. This slip triggered a strong reaction from the venom-punks.com team, particularly their leader, who seemed visibly upset and even threatened to undermine the Venom Foundation. This reaction raises a serious question. What secret agreements are at play behind the scenes?

Despite the ongoing support from the Venom Foundation, venom-punks.com has openly criticized the foundation, accusing it of being disorganized. The irony of this situation is striking. Here is a project that, despite its questionable legitimacy and the foundation’s backing, publicly denounces the very organization that supports it. Kind of disturbing.

Then came the involvement of Oasis Gallery. Official statements from the foundation described Oasis Gallery as an independent third-party dApp. However, contradicting this claim, the venom-punks.com team indicated that the gallery was closely linked to the Venom Foundation, suggesting the foundation had major influence or even control over Oasis operations.

The legitimacy of VenomPunks.com was further compromised when Oasis Gallery listed their collection without consent and initially marked it as verified, potentially to boost its visibility and sales. However, just minutes after realizing the implications of their actions, the foundation requested the removal of the listing from the homepage.

This rapid sequence of actions demonstrated a deliberate attempt to manipulate market visibility to favor the scam project over the legitimate creators. When Venom Punks requested the removal of their collection from Oasis Gallery to maintain control over their project’s presentation and sales, their requests were blatantly ignored.

Internal struggles

The Venom Foundation has been facing some serious internal and financial challenges, starting with the departure of former CEO Mustafa Kheriba. The reasons behind the delayed launch of its mainnet are deeply tied to the organizational shake-up and the parting ways of Kheriba’s financial investment company with the foundation.

Post-Kheriba, the Venom Foundation experienced operational difficulties, primarily because it outsourced most tasks and its team worked remotely. The setup began to crumble as financial constraints became apparent. The lack of adequate compensation led to a mass exodus of professionals who were essential to the foundation’s operations, leaving the foundation struggling with an underqualified and understaffed team.

Further complicating matters, VenomPunks.com claimed to have uncovered troubling inconsistencies within the Venom ecosystem, particularly with how certain data was being handled and displayed. For instance, VenomArt and VenomScan were found displaying the total supply of the “Drunk Soda” collection as 2,750, despite the smart contract showing a total of zero.

This discrepancy raises serious questions about the reliability of the foundation’s technology and its adherence to blockchain standards, specifically the TIP4 protocol mandated by RFC2119. Finally, the VenomPunks.com team decided to confront the foundation with evidence of misconduct involving the scam project, venom-punks.com.

Initially, there was hope that presenting this evidence would prompt the foundation to take corrective actions. However, instead of addressing the issues, the foundation alerted the scam project, leading to an attempt by both parties to erase the evidence.

Venom-punks.com’s response to the exposure was to distance itself from the foundation, claiming that it was not an official project of the Venom Foundation. This claim came too late and seemed like a desperate attempt to salvage whatever was left of its reputation.

The culmination of these issues has led VenomPunks.com to make a difficult but necessary decision — to leave the Venom chain. The foundation’s inability to maintain a fair and competitive environment, combined with its failure to support and protect genuine developers, has forced VenomPunks.com to seek a new platform where integrity and equal opportunities are valued.

Note: Every single piece of information written in this report came directly from Venom Punks.