To Zaidoun “Lonzo” Al-Owbydi and the Sphynx Labs Core Team,
We write to you as a collective of Sphynx Labs investors and community members who have supported your project from its inception. For two years now, we have been met with silence and stonewalling regarding the status of our funds and the promises made to us. This open letter is endorsed by all the HyperPool participants and other affected users, not just one individual. We demand transparency, accountability, and an immediate explanation for what has transpired under your leadership.
Community United in Frustration
We, the Sphynx community, feel cheated and abandoned. After enthusiastically backing your vision of an all-in-one DeFi ecosystem, we have endured 24 months of near-total silence. Our reasonable inquiries in your official Telegram group were ignored or censored – in fact, one of our community representatives (user Busimatch) was summarily banned for simply asking what happened. This is an outrageous breach of trust and a stark contrast to the openness one expects in decentralized finance.
Your last meaningful update was two years ago, and since then there have been no clear communications about the status of Sphynx’s flagship features like the HyperPools, the condition of the $SPHYNX token, or the roadmap you once touted. This prolonged silence has left all of us – the very people who believed in and funded your project – feeling betrayed.
HyperPools: Promises Made, Promises Broken
One of our biggest grievances is the HyperPools program. You introduced HyperPools as a revolutionary dual-reward staking system, allowing us to stake $SPHYNX tokens (along with NFTs and LP tokens) to earn two kinds of rewards simultaneously – in a blockchain’s native coin (like BNB or ETH) and in stablecoin (USDT)
thesphynx.co
thesphynx.co
. We were excited by this “no-lose” concept where returns would come from real revenue streams (trading fees, bridge fees, dev services, etc.) rather than from minting new tokens
thesphynx.co
. HyperPools were marketed as a sustainable, non-Ponzi innovation – “stake your way to Level 4 and earn 2 assets… rewards are derived from our diverse revenue streams… to maintain sustainability and avoid a Ponzi scheme”
thesphynx.co
.
However, after we locked our funds in these pools, nothing materialized. There have been no credible updates on reward distributions or pool performance. The Level 4 stablecoin rewards never arrived, and any “variable APR” seems effectively zero since we’ve seen no real yield. In short, the promises of HyperPools have been broken.
Worse, you have provided no status updates whatsoever – no clarification if the revenue model failed, if the pools are paused, or if the funds meant for rewards were diverted. The community is left to suspect the worst: that the HyperPools were a ploy to attract deposits that you never intended to honor. The way things stand, our trust has been shattered.
Deafening Silence and Lack of Transparency
What we find most unprofessional is the complete silence from you, Lonzo, and the rest of the core team. It’s been two years without an AMA or honest post-mortem addressing the issues. Legitimate questions on official channels are met with bans instead of answers. This behavior – avoiding accountability and silencing dissent – is utterly unacceptable and deeply unprofessional.
Decentralized projects live and die by their communities. Yet you have treated us with disdain, keeping us in the dark while our investments dwindled. The $SPHYNX token price has plummeted over 99% from its all-time high, and its trading volume is practically zero
coingecko.com
, reflecting a dead project – still, you offered no explanation. Such disregard for your early supporters’ concerns is a gross violation of the transparency principle in DeFi.
We demand that you break this silence immediately. Why have the HyperPool rewards not been delivered? Where have the platform’s revenues gone? If there were technical or regulatory challenges, you owed us that information two years ago. The continued quiet gives the impression that you have something to hide.
MaalyPay Raises New Questions
Adding insult to injury, while Sphynx Labs has gone quiet, we have observed your team’s involvement in a new venture called MaalyPay (website: maaly.io). MaalyPay is promoted as a decentralized solution for offline crypto payments (with NFC & QR support, 0% monthly fees, etc.)
x.com
. We’ve seen online activity – posts and collaborations – indicating Sphynx Labs is working with or alongside MaalyPay. For instance, a blockchain industry event announcement from Dubai (October 28–29, 2025) highlighted diving into “the future of digital payments with @MaalyPay,” in partnership with entities like the Indonesia Blockchain Center “bekerjasama dengan Sphynx Labs” (collaborating with Sphynx Labs)
instagram.com
. Another social media update mentioned an official collaboration between MaalyPay and other companies, explicitly noting Sphynx Labs’ involvement
instagram.com
.
This information tells us a few things: (1) The Sphynx Labs team (or resources) have been active elsewhere, rather than being truly absent; (2) You may have pivoted focus to MaalyPay’s payment technology while leaving Sphynx investors in limbo; and (3) You have communicated with outside partners (and presumably new investors) about MaalyPay, yet you couldn’t even inform your original community about what was happening. This double standard is outrageous.
We actually applaud innovation and real-world use cases like crypto payments, and MaalyPay’s concept could be exciting. But pursuing a new project without resolving the outstanding issues of Sphynx Labs is a massive red flag. It appears as if you have moved on with our money – essentially trying to build something new while sweeping the mess of Sphynx under the rug. We have to ask: Are the funds raised from Sphynx’s token and HyperPools being funneled into MaalyPay or other ventures? Why was there no disclosure of Sphynx Labs’ role in MaalyPay to the community that trusted you?
Your involvement in MaalyPay, combined with the absence of any Sphynx project updates, gives the impression of an attempted rebrand or sidestep – as if you’re distancing yourselves from the Sphynx fallout without accountability. We won’t allow that. We want clarity on the relationship between Sphynx Labs and MaalyPay, including any shared team members, technology, or financial resources. The community deserves to know if MaalyPay is being built on the ashes of our investments.
Unprofessional Conduct and Suspect Fund Handling
From our perspective, the way you have handled (or rather, mishandled) this situation is highly unprofessional. Legitimate projects do not ghost their investors or delete community members for asking tough questions. The pattern of behavior here – grand promises, aggressive fundraising, followed by silence and evasion – is sadly characteristic of a scam or rug pull scenario
trustwallet.com
. We sincerely hope we are wrong, but you have given us no evidence to the contrary.
Our community has been doing its own digging during your silence. We have identified several wallet addresses believed to be controlled by Sphynx Labs founders or insiders – addresses that held significant amounts of $SPHYNX or received funds from the project. We won’t publicize full addresses in this letter, but rest assured we know them. We have observed movements of funds that raise eyebrows (for example, large transfers of BNB out of project-related wallets and even usage of mixing services in some cases). Such actions suggest an attempt to obfuscate the flow of money, which only intensifies our suspicions. We will be sharing these findings with relevant authorities and forensic investigators. You should operate under the assumption that nothing is hidden – on a public blockchain, we can trace nearly everything.
Let us be clear: If you have misappropriated investor funds or project revenues, you will be held accountable. Claiming that liquidity or funds were “locked” or inaccessible will not protect you if it’s discovered that insiders had control all along. (Indeed, this was exactly the downfall of SafeMoon’s team – they falsely told investors liquidity was locked when they secretly had access and diverted millions
justice.gov
.) Any attempt to cover your tracks now, after the fact, is futile. The blockchain does not lie.
We Are Prepared to Take Legal Action
Because of your continued non-response, we have begun organizing a team of our own – including legal counsel and crypto forensic experts – to pursue action against the responsible parties. We want you to understand the seriousness of this situation. Crypto may sometimes feel like the Wild West, but increasingly, authorities around the world are cracking down on fraud and rug pulls. If Sphynx Labs indeed turns out to be a deliberate rug pull or fraudulent scheme, you and anyone involved could face real legal consequences. There are multiple precedents that should serve as a warning:
SafeMoon Case (2023): The founders and executives of SafeMoon were criminally charged by the U.S. Department of Justice in November 2023 for defrauding their investors
justice.gov
. They lied about locked liquidity and siphoned off millions for personal use (buying luxury cars and real estate). Law enforcement traced the funds and arrested the perpetrators
justice.gov
justice.gov
. This shows that even if a project once had an $8 billion market cap, the FBI, SEC, and IRS can and will track down crypto fraudsters. You could be next if you do not come clean and make things right.
OneCoin Ponzi (2014–2023): OneCoin’s co-founder Sebastian Greenwood was arrested and sentenced to 20 years in prison in 2023 for his role in that infamous crypto scam
koinly.io
. His partner, Ruja Ignatova, is on the FBI’s Most Wanted list. The scale of Sphynx is smaller, but the principle remains: if you defraud people, you can end up in jail for a long time. Courts do not look kindly on those who abscond with investors’ money.
Frosties NFT Rug Pull (2022): Even newer types of crypto scams are being prosecuted. In the “Frosties” NFT rug pull, the U.S. Department of Justice arrested the two 20-year-old founders after they sold $1.3M worth of NFTs and shut down the project
koinly.io
. They were charged with wire fraud and money laundering and face up to 20 years in prison
koinly.io
. This was one of the first times NFT scammers were brought to justice, proving that authorities are paying attention and building expertise in crypto cases.
These examples are not exhaustive – there are many other cases (from **Turkey’s Thodex exchange founder getting 11,196 years in prison
koinly.io
, to high-profile figures like Sam Bankman-Fried being sentenced for fraud). The pattern is clear: Crypto is not a lawless space. Rug pulls and frauds will be exposed, and their perpetrators will face consequences, whether through criminal prosecution or civil lawsuits.
We mention these cases to impress upon you that we are absolutely serious about seeking accountability. We are not simply going to shrug and walk away from our losses. We are organizing, sharing information, and coordinating with others across jurisdictions. If needed, we will approach financial regulators, law enforcement agencies, and pursue class-action litigation to recover funds and see justice served.
Do not underestimate our resolve. The crypto community may be global and diverse, but when united by a common cause, we can be incredibly persistent. We will not be intimidated or deterred – we are prepared to fight for our rights and our investments.
Our Demands and Next Steps
In light of all the above, we demand the following actions from Sphynx Labs and its leadership immediately:
Public Explanation: Provide a full, honest update addressing the status of Sphynx Labs. This should include what happened with the HyperPools (why rewards stopped or never arrived), the current state of the $SPHYNX token and its liquidity, and why the project went silent. Explain any internal challenges or mistakes – now is the time for transparency.
Financial Accountability: Disclose how the funds raised from the community (through token sales, HyperPool deposits, etc.) have been utilized. If funds were diverted to other projects or personal accounts, this must be revealed. We expect an audit or report detailing the inflows and outflows of project wallets. If there are any remaining treasury funds, they should be safeguarded and not moved while an investigation is ongoing.
MaalyPay Clarification: Clearly outline the relationship between Sphynx Labs and MaalyPay. Who from Sphynx is involved in MaalyPay? Is MaalyPay using tech or assets developed with Sphynx funds? Why were Sphynx community members not informed about this venture? If MaalyPay raised new funds, did any come from Sphynx assets? We insist on knowing whether our investments indirectly financed this new project.
Restitution Plan: If indeed our funds have been misused or our rewards unpaid, propose a plan to make investors whole. This could include returning the crypto assets owed to HyperPool stakers, a buyback/burn of $SPHYNX tokens to provide some value support, or other compensation. Silence and inaction is no longer an option – we expect concrete steps to remedy the situation.
Cooperation with Authorities: Pledge to cooperate with any investigative authorities or audits. If this was all a misunderstanding or a series of unfortunate events, you should have nothing to hide. Prove to us with actions – not just words – that you are willing to be accountable. This includes not tampering with or hiding funds at this stage; doing so would only further incriminate those responsible.
We hope that you will take these demands seriously and respond in good faith. Our goal is not vengeance for its own sake; it is to get the truth and see justice done. If there is any path to salvaging the project or rectifying the wrongs, that would start with you engaging transparently with your community.
Conclusion: Time to Do the Right Thing
Lonzo and team – the time of quiet evasion is over. We will no longer be ignored. You must face the community you created. We call on you to remember the commitments you made when launching Sphynx Labs. You promised a “safe, stress-free platform” for investors
dappradar.com
and touted that you were a doxxed, audited team building something revolutionary. Now, when it matters most, you need to live up to those words by being accountable.
If you choose to continue your silence, consider this letter as formal notice that we will escalate the matter. We will expose what we know to the public and to regulators. The crypto press and social media will be made aware that Sphynx Labs appears to have rug-pulled its users. Legal complaints will be filed. Essentially, we will shine a light on everything. As the saying goes, sunlight is the best disinfectant – and we intend to make sure the full story of Sphynx Labs sees the light of day.
However, if you break your silence and engage with us constructively – if you acknowledge the grievances, provide evidence of where funds are, and work with us on a plan forward – then we are willing to hear you out. Many of us would prefer a resolution that recovers our losses or revives the project in some form, rather than a protracted legal battle. The ball is in your court to show genuine integrity (even if belatedly).
We urge you to respond to this open letter publicly (for example, by commenting under the same forum or article where this letter is posted, or via an official statement on your website/Medium). The response should directly address the points we raised – no generic PR fluff, please. Your investors are owed candor and contrition, not excuses.
In closing, remember that the blockchain remembers everything. The choices you make now will determine your legacy. You can either start making amends and possibly earn some respect back, or you can continue down a path that may lead to legal peril and infamy. We sincerely hope you choose the honorable route.
We, the undersigned community of Sphynx Labs, await your prompt response.
– The Sphynx Labs Community (HyperPool Participants and Supporters)
Sources:
Sphynx Labs HyperPools description and reward model
thesphynx.co
MaalyPay project overview and Sphynx Labs collaboration (Instagram post via Indonesia Blockchain Center)
instagram.com
x.com
U.S. Department of Justice – Indictment of SafeMoon executives for fraud (Nov 2023)
justice.gov
Koinly report – OneCoin co-founder Greenwood sentenced to 20 years (2023)
koinly.io
Koinly report – Frosties NFT rug pull, founders arrested (2022)
koinly.io
