Metaverse ’Ponzi’ Crypto Founder Tied to Major Drug Bust—What This Means for Digital Asset Regulation

Crypto's shadowy underbelly just got another headline—this time linking a metaverse project founder to an illicit drug operation. The case raises immediate questions about due diligence, regulatory gaps, and just how clean the 'next big thing' really is.

When Glitz Meets Grit

It’s the classic tech story with a criminal twist. A founder pitches a futuristic digital world—virtual real estate, tokenized assets, the works. Investors flock in, dreaming of early Bitcoin-style returns. Then the narrative cracks: authorities trace funds back to a narcotics ring, and the 'innovative metaverse' starts looking more like a sophisticated front.

Due Diligence or Blind Faith?

Many backers never ask where the momentum comes from. Flashy demos and influencer endorsements often replace proper audits or legal checks. When a project promises triple-digit APY or 'guaranteed' land appreciation, skepticism should spike—but FOMO usually wins.

The Regulatory Void

No SEC filing, no FSA oversight, no real KYC. That’s the wild west of some crypto-metaverse launches. Regulators scramble to map decentralized projects onto existing frameworks, while bad actors exploit the gray areas. This bust might accelerate calls for stricter licensing—even for 'virtual' ventures.

Investor Takeaway

High returns often come with hidden risks. If a project’s founder can’t pass a basic background check, maybe the token shouldn’t pass your investment checklist. Another reminder: in crypto, if something looks too good to be true, it’s probably funding something else entirely.

One cynical finance jab: It’s almost impressive—a single scheme managed to combine the speculative excess of metaverse hype with the steady cash flow of illegal pharmaceuticals. That’s diversification, after a fashion.

According to the Guardian, some pens contained retatrutide, a powerful GLP-1 agonist still in clinical trials and unapproved for medical use.

Despite the scale, no arrests have been made, and the Medicines and Healthcare Products Regulatory Agency has not publicly identified who ran the scheme.

Crypto Venture Trails Lead to Drug Operation

Documents reviewed by The Guardian connect the raided unit to Wholesale Supplements Limited, where Tariq serves as director.

Customer order photographs suggest Alluvi products were sold through Ecommerce Nutri Collectiv, a website that later lost payment processing after Stripe terminated services.

Companies House records show Ecommerce Nutri Collectiv Limited previously shared an address with Vantage Commercials Group Limited, a company Tariq once operated.

The trading name at the bottom of Nutri Collectiv’s website redirects to Paradox Labs, previously known as Paradox Studio, a crypto venture founded by Tariq.

Paradox launched Paradox Coin and Paradox Metaverse, a play-to-earn blockchain game that drew accusations of a scam from online critics and investigators.

Crypto investigator Stephen Findeisen, known as Coffeezilla, publicly challenged Tariq and his brother in a YouTube interview, questioning the project’s economics and promotional claims. Tariq denied marketing a get-rich-quick scheme.

Social media footage linked to Alluvi shows a distinctive bright-green Lamborghini Huracán Spyder, while local residents reported that luxury cars, including a Rolls-Royce, were frequently parked outside the raided unit.

Tariq’s former company, Onyx, specialized in high-end car rental and chauffeur services.

His driving record includes a 2018 incident in which he was fined £1,185 and banned from driving for 12 months after failing to identify a BMW driver who overtook a Ferrari traveling at over 135mph.

He had regained his license days earlier following convictions for drink-driving and driving while disqualified.

Crypto Crime Networks Face Global Enforcement Pressure

One source with inside knowledge of the illegal weight-loss drug trade described those behind Alluvi as “” operators who “made noise from day one.”

The pattern mirrors broader criminal exploitation of crypto infrastructure. In November, the UK’s Serious Fraud Office arrested two men linked to the $28 million Basis Markets collapse, a hedge fund that vanished in 2022 after diverting funds to the founders’ wallets.

The UK SFO made its first major crypto enforcement MOVE by arresting two men linked to the $28M Basis Markets collapse.#UK #Cryptohttps://t.co/paiHemobLm

The crackdown extends beyond crypto ventures into traditional operations using digital assets. Three UK men received 27 years combined for running a dark web drug operation using cryptocurrency.

Similarly, in November, South Australia Police filed 800 charges and made 55 arrests in a crypto-linked ring, seizing $37.9 million using FBI evidence.

Dr. Piotr Ozieranski told The Guardian that complaint-led regulation moves too slowly. “At present, it often feels that the worst that can happen is a slap on the wrist,” he said. “Meanwhile, the public remains exposed to serious harm.”

Medical experts warn that retatrutide has not completed clinical trials, while unregulated injectable drugs may be contaminated, incorrectly dosed, or improperly sterilized. Potential consequences include severe infections, pancreatitis, and dangerous blood-sugar fluctuations.

Despite the severity, the MHRA confirmed no arrests have been made and declined to comment on Tariq, citing ongoing inquiries.

The Alluvi website remains live, claiming products are unavailable due to “” over the Christmas period. Its Telegram channel continues attracting thousands of members who appear to place daily orders, with rumors suggesting production has shifted locations following the raid.

To battle the growing crypto money laundering driven by scams, drugs, and human trafficking, Tether, the issuer of USDT, has partnered with the United Nations Office on Drugs and Crime to strengthen cybersecurity and combat digital assets.

Recent enforcement actions also include federal prosecutors charging a Chicago crypto ATM founder with a money-laundering conspiracy that moved $10 million through kiosks, while the Treasury also recently sanctioned 19 entities for crypto scams that defrauded Americans of $10 billion in 2024.