Mysterious institution DWF Labs, which has made tens of millions of dollars in investments over the past six months, continues to face scrutiny despite responding.

Trading and investment firm DWF Labs recently invested $10 million in the crypto startup CryptoGPT, sparking suspicions within the community. Concerns include discrepancies between the claimed investment amount and on-chain data, the leader's involvement in the OneCoin fraud scheme, and the use of investment news for token promotion. In response to the doubts, DWF Labs Managing Partner Andrei Grachev has come forward to explain.

For more details on the controversies surrounding DWF Labs and CryptoGPT, please refer to: CryptoGPT Raises Millions with ChatGPT, Investors Suspect Fraud Involvement by DWF Labs

DWF Labs Explains Its Investment Approach

DWF Labs Managing Partner Andrei Grachev explained the investment approach of DWF Labs. He mentioned that DWF Labs typically utilizes SAFT (Simple Agreement for Future Tokens) for pre-seed and seed stage investments; for tokens already in circulation, they invest in batches based on lock-up schedules.

Most of the cryptocurrencies held by DWF Labs are stored on centralized exchanges, as Andrei Grachev cited security and fund efficiency reasons, as these coins can be used as collateral for trading. At times, they also share risks with token project teams and provide liquidity using their own funds.

However, Andrei Grachev did not address his personal involvement in past negative rumors or provide an explanation for investing in CryptoGPT.

DWF Labs Makes High Investments Over the Past Six Months

DWF Labs' Twitter account was established in June 2022 and has been frequently announcing investments ranging from millions to tens of millions of U.S. dollars over the past six months. For example, in the case of CryptoGPT, they announced a $10 million investment, but only $420,000 was received initially, with the rest to be invested over 285 days. Additionally, DWF Labs will act as a market maker for CryptoGPT.

• September 2022 – Strategic investment in secondary market Coinflux, amount undisclosed
• September 2022 – Strategic investment in secondary market AirDAO, amount undisclosed
• October 2022 – Participated in Precog Finance private investment of $3.5 million including other investors
• November 2022 – Invested $10 million in the TON ecosystem
• November 2022 – Participated in Cosmos decentralized finance protocol Onomy's $10 millionprivate investment including other investors
• November 2022 – Invested $2.3 million in multi-chain DAO builder XDaoinvestment including other investors
• December 2022 – Strategic investment of $1 million in the metaverse platform Mars Labs
• January 2023 – Purchased $5 million MASK tokens as a strategic investment in Mask Network
• February 2023 – Participated in YGG game guild's token sale of $13.8 million including other investors
• February 2023 – Invested $25 million in privacy tech company Beldex
• March 2023 – Invested $10 million in Coinflux
• March 2023 – Participated in TON fundraising platform Tonstarter's $1.5 million seed round including other investors
• March 2023 – Announced proposed purchase of $10 million in TON infrastructure developer Orb tokens
• March 2023 – Through token purchase, Invested $20 million in synthetic asset protocol Synthetix
• March 2023 – Led $40 million funding for alternative internet builder Tomi including other investors
• March 2023 – Led $10 million funding for blockchain company Radix Tokens including other investors
• March 2023 – Participated in Irene Zhao's web3 social platform So-Col with $4.5 million including other investors
• March 2023 – Strategic investment in blockchain infrastructure company NULS, amount undisclosed
• March 2023 – Invested $40 million in AI-focused blockchain project Fetch.ai
• March 2023 – Invested $5 million in user rewards platform apM Coin
• April 2023 – Invested $10 million in payment service provider Alchemy Pay
• April 2023 – Invested $10 million in L2 AI to Earn protocol CryptoGPT
• April 2023 – Strategic investment of undisclosed amount in metaverse Sinverse
• April 2023 – Invested $10 million in information protocol RSS3 tokens

More investment details

DWF Labs Criticized for Allegedly Taking Advantage of Retail Investors

@nay_gmy, who raised questions about DWF Labs, later stated that information from insiders indicated his suspicions were likely correct: DWF Labs, under the guise of "strategic cooperation" and "investment," was acting as a token distributor for issuing teams in the secondary market, profiting from the process.

He believes that many retail investors, upon seeing investment announcements, may think it will lead to price increases and buy the tokens; however, they end up purchasing the tokens that DWF Labs is selling in the secondary market.