The 10 Biggest Scams in Crypto.
According to a Chainanalysis crypto crime report, $14 billion worth of crypto was stolen only in 2021 alone. This figure had doubled from $7.8 billion in 2020. Today, we’ll take a look at 10 of the biggest cryptocurrency scams in history. We all give you tips on how you can avoid these scams.
Why Are Crypto Scams Lethal?
One major property of cryptocurrencies is that they’re irreversible. This means that once the transaction has been made complete, no one can reverse them. Not even crypto miners and not even Satoshi Nakamoto, the founder of cryptocurrency. Hence if one is scammed, there’s no way of getting their crypto back.
Crypto scams are also lethal due to the use of pseudonyms for Bitcoin addresses. They usually comprise about 30 random chain characters that are not associated with real-world entities. In the case of fraud, it’s very difficult to know the identity of the fraudster and their address is.
Now that we know how bad it can get, let’s take a look at the 10 biggest cryptocurrency scams.
10 Biggest Crypto Scams in History.
1. OneCoin Scam
Since the invention of cryptocurrency in 2009, many coins posed as legit cryptocurrencies, OneCoin being among them. The founder, Ruja Ignatova, encouraged the members to purchase educational materials and tokens promising them immeasurable wealth. This led to people from over 175 countries joining in all to be scammed off $ 4 billion.
The first red flag should have been that there was no presence of a blockchain behind the coin. Instead of using cryptocurrency trading platforms, it used its own.
The founder, Ruja Ignatova, went into hiding in 2017 and has never been seen again.
Talk about family conniving together, Africrypt was one of the biggest crypto scams that involved two South African brothers.
Raees and Ameer had founded Africrypt together in 2019. As they started out, they asked people to deposit money that would be used to buy Bitcoin.
Many people not just in Africa but also in the UK and the rest of the world rushed to invest in Africrypt. Everything came crashing down In April 2021. Seven days before the alleged “hack”, all employees of Africrypt lost access to their accounts and the company’s backend platform.
After the hack occurred, the brothers vanished together with $ 3.6 billion worth of Bitcoin.
Thodex was among one of the worst cryptocurrency scams. The founders of Turkish Cryptocurrency came up with an elaborate plan to rob investors of $ 2.2 Billion worth of crypto.
In April 2021, they announced the suspension of operations due to an “ongoing partnership.”
They asked investors not to worry and that the operations will resume after about five days. But it didn’t take only five days. Investors began complaining that they couldn’t withdraw from their accounts. Some went ahead to file lawsuits.
They never recovered their money back as the founders had long since vanished
4. Mt. Gox Scandal
The Mt. Gox scandal is definitely one of the biggest cryptocurrency scams in history. The Japan-based Bitcoin exchange had been in operation since 2010 and by 2013, it handled over 70% of Bitcoin transactions worldwide.
Mt. Gox was first attacked in 2011 and $8.75 million was lifted by the attackers. The second and most lethal attack came in late 2013 when hackers took $800,00 worth of crypto which was valued to close to $450 million.
The company never recovered from the blow and filed for bankruptcy in 2014. Thus, they had to liquidate their assets. The stolen amount would have been worth $ 5 billion today.
5. The 2020 Twitter Hack
In July 2020, Twitter accounts of prominent figures were hacked. These include accounts of Elon Musk, Joe Biden, and Barack Obama. The imposters promised to double the Bitcoin that would be sent to a specified Bitcoin wallet in the name of giving back to the community.
This led to followers of the hacked accounts sending their bitcoin. The hackers accumulated close to $100,000 worth of Bitcoin before the public even knew it was a scam.
The CEO of Twitter, Jack Dorsey addressed the issue and promised to investigate. They went on ahead to lock the accounts and remove the scamming tweets. This was close to an hour after the accounts were hacked.
6. Coin Dash
Image credit: Solar seven
The crypto scam involving CoinDash occurred on July 17, 2017. This was the day that CoinDash announced its Initial Coin Offering. The hackers replaced the original Ethereum address with their own and accumulated 43,000 Ethereum tokens.
At the time, the CEO of CoinDash announced that everyone who sent their Ethereum to the malicious address would receive compensation with CDT tokens worth their lost Ethereum.
Surprisingly, the hacker returned 20,000 Ethereum tokens three months later in September and remained with the other 23,000. This move led to members of the public speculating that it was an inside job.
Image credit: Shapecharge
Unlike other Ponzi schemes, PinCoin seemed legit in the beginning. The investors were paid using a token called iFan and promised that the tokens would create a bridge between fans and celebrities.
According to Tuoi Tre News, PinCoin pledged that each investor would receive a 48% monthly profit. This led to even more people investing in the Vietnamese cryptocurrency.
In March 2018, the investors had the shock of a lifetime when they could no longer access their accounts.
The Pincoin team had gone into hiding and taken with them the $600 million they had accumulated from over 32,000 investors.
8. Adin Ross’s MILF token.
Image source: Coffeezilla’s tweet on August 3rd, 2021.
Adin Ross is a Twitch streamer who was involved in a pump and dump scam that robbed his followers of thousands of dollars. In May 2021, Adin used his social media platform to promote the MILF token to his followers. Following his promotion, the value of the token had multiplied close to 20 times within 24-hours.
According to Coffezilla, Adin Ross is said to have received $200,000 for his participation. Later on, Ross denounced the MILF token in a video that went viral. He said that he was just doing it for promotion and “hoped” that none of his followers had bought the token. This led to the decline of the token altogether and people losing the money they had invested in the MILF token.
9. Bored Ape Yacht Club
Tweet by Calvin Becerra on Nov 1, 2021
The Bored Ape Yacht Club consists of limited edition NFTs with the highest prices. Unfortunately, an entrepreneur, Calvin Becerra fell victim to a scam on 31st October 2021, where he lost all 3 of his NFT Bored Apes.
The scammers posed as technical support on discord and offered to help him address a problem he was facing. Coincu news reported that the 3 NFT monkeys were valued at close to $ 1 million. One of them he had only bought two weeks prior to the incident. Truth be told, he had been naive to give out his credentials to unknown people and hence paid dearly for it.
10. The Squid Game Token
In September 2021, Squid Game, a South Korean limited series came out on Netflix. It was widely accepted and went on to break the record by having over 1.65 billion streaming hours during its first four weeks.
The show became such a huge sensation that a cryptocurrency emerged from it, the Squid Game coin.
However, the token was very suspicious. For example, people could only buy the coin and not sell it. CNBC also reported that one could not comment on the Telegram and Twitter accounts of the creators of the coin.
However, this didn’t stop people from buying the coin. After two weeks, the creators sold all their tokens leading to the value of the coin plummeting to $0. This move made investors lose close to $ 3 million.
How Can You Avoid Crypto Scams?
After seeing how people have lost thousands and even millions, there’s a great need to be cautious. Here are 3 tips to ensure that you avoid crypto scams.
1.Conduct Thorough Background Checks.
Before you invest in a digital cryptocurrency company, do a thorough background check on them. Are they powered by blockchain? Do they track their transaction data?
Make sure to also check their specified ICO (Initial Coin Offerings) rules and digital currency liquidity.
2. Avoid Copy Pasting URLs
Fake websites are set up on a daily basis to scam unkeen users. The websites end up looking identical to the original ones but the URL is what’s changed.
The change in URL is usually very subtle. For example, a hacker can convert the letter I to a number 1 and redirect you to pay to their website instead.
3. Beware of Scamming emails
Double-check that both the logo and the email address belong to the digital currency company. You should also avoid clicking links on an email that takes you to a specified website.
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