top-10-cryptocurrency-scams-that-shocked-the-world

Cryptocurrency has brought a financial revolution and presented the world with decentralization, privacy, and a promise of high returns. Since not everything in crypto is regulated, fraudsters easily fool people by promising high returns. Over time, thousands of people have lost billions through various schemes, from Ponzi schemes and fake initial coin offerings (ICOs) to exchange hacks and rug pulls. The scammers often disappear after collecting enough funds, leaving investors with worthless tokens. Infamous cases include known crypto exchanges folding overnight or Ponzi schemes promising impossible gains. Governments worldwide and regulatory agencies have come in to reinforce rules and check activities to prevent future crypto fraud cases.

Cryptocurrency is an exciting financial innovation; these incidents raise the need for caution, rigorous research, and skepticism before any form of investment. Here are the top 10 cryptocurrency scams that shock the world.

In This Article

1. OneCoin: The $4 Billion Ponzi Scheme

The OneCoin scam is the biggest cryptocurrency scam that stole more than $4 billion from investors. The cryptocurrency project OneCoin burst into the market in 2014 under the leadership of “CryptoQueen” Ruja Ignatova as a digital currency intended to surpass Bitcoin. OneCoin had a pyramid scheme model in which investors were rewarded for recruiting other people, getting a share of the newly invested amount. The company showed off with its big events and falsely claimed some sort of partnership while creating fake endorsements. In 2017, Ruja Ignatova vanished, and her location remains unknown. The coin collapsed, but some operations continue under different names.

2. Squid Token: A Deceptive Crypto Collapse

The Squid Token crypto fraud captured widespread attention in late 2021. Named after the Netflix show Squid Game, it promised big returns through play-to-earn features and quickly attracted millions of investments. However, within days, the developers executed a “rug pull,” withdrawing all funds and leaving investors with worthless tokens. While Squid Token’s price initially skyrocketed, it crashed after the scandal broke. The project’s website and social media pages were taken down. The Squid Token scam exposed the hype-driven investments and the risks involved in investing in new cryptos without proper research.

3. Mt. Gox: A $450 Million Shocking Bitcoin Scam

The Mt. Gox hack remains the most infamous case in crypto history. Mt. Gox traded over 70% of global Bitcoin trades; however, due to poor security, hackers could access it for years and withdrew 850,000 BTC at the then valuation of $450 million. The attack was largely attributed to a transaction flaw and Mt. Gox’s failure to implement adequate security measures. In 2014, the exchange suddenly stopped withdrawing and filed for bankruptcy, with thousands of users unable to withdraw their funds. Although 200,000 BTC was eventually recovered, the remaining losses gave rise to a long legal battle and compelled all regulatory bodies globally to enhance scrutiny over crypto exchanges.

4. PlusToken: A $2 Billion Chinese Ponzi Scheme

PlusToken was launched in 2018 and targeted primarily Chinese, and South Korean investors. The platform provided high monthly return rates between 8% and 16%. Users were encouraged to invite others and rewarded them for every new investor. This multi-level marketing (MLM) structure helped PlusToken spread rapidly. PlusToken did not engage in real trading or investments. Instead, it relied on continuous new deposits to pay older investors. Once the scheme became unsustainable and withdrawal requests increased, PlusToken shut down, leaving millions of users without their funds. Later, some of the masterminds were arrested by authorities. PlusToken showed a danger in trusting schemes that promise guaranteed high profits.

5. QuadrigaCX: The Mysterious Death of Its CEO

QuadrigaCX was the largest cryptocurrency exchange in Canada that scammed people of nearly $190 million. It was founded in 2013 by Gerald Cotten, who died on a trip to India. The exchange’s private keys were controlled by Cotten alone, preventing any transaction withdrawals. The disappearance of Cotten has led many to believe that he staged his death while stealing customer funds worth over $190 million. Authorities described the company as an absolute scam, where Cotten is declared dead and millions have not been traced yet. Therefore, justice is yet to be served.

6. Bitconnect: The Infamous Crypto Lending Scam

Bitconnect established itself as a notorious crypto Ponzi scheme offering “high returns” through its “trading bot.” The scheme attracted thousands of investors globally before its fraud was exposed. Authorities declared the operation a typical Ponzi scheme that paid its previous investors using money from new participants. The platform shut down abruptly in 2018, causing its token to crash from over $400 to nearly zero. Thousands of investors suffered massive losses, which triggered investigations across multiple countries. Eventually, U.S. authorities arrested BitConnect’s founder for defrauding investors.

7. Thodex: The Turkish Exchange Scam

Thodex operated as a Turkish crypto exchange platform that later disappeared without warning. The chief executive officer, Faruk Fatih Özer, fled Turkey, stealing $2 billion from investors who could not withdraw their money from the platform. Thodex ran grand promotional campaigns, offering new users luxury cars and high cash bonuses. The exchange also assured the investors that their assets were secure and mentioned it as a more trustworthy alternative to all other trading platforms. Users first received maintenance updates from Thodex, which turned out to be an organized scam. Turkish authorities arrested Faruk Fatih Özer in Albania, where he received 11,196 years of imprisonment and a fine of 135 million Turkish liras.

8. BitClub Network: The Fake Crypto Mining Scheme

BitClub Network existed as a fraudulent operation from 2014 to 2019. The platform claimed Bitcoin mining as its source of income while offering extensive returns to investors. The company deceived its investors by taking funds from new members to pay its existing investors. This method mirrored the practices of Ponzi schemes. In 2019, the authorities caught and arrested the BitClub Network operators for swindling their investors. They had stolen over $722 million. The operation failed, which confirmed it as another fraudulent cryptocurrency investment scheme.

9. Africrypt: The $3.6 Billion Bitcoin Fraud Case

Africrypt was founded by two South African brothers, Ameer and Raees Cajee, in 2019. The company promised high returns through Bitcoin trading. However, the founders surprisingly declared that Africrypt had been hacked and asked the investors not to take legal action against them. They disappeared shortly after this, taking $3.6 billion worth of Bitcoin with them. Thereafter, investigations revealed Africrypt as a Ponzi scheme, where new investors’ money was used to pay previous ones. Most of the stolen Bitcoin are still untraceable, which made it the most notorious crypto scam in history.

10. SaveTheKids Token: The Pump-and-Dump Influencer Scam

SaveTheKids Token was a token promoted by several popular influencers, particularly members of the esports organization FaZe Clan. The platform claimed to support charity; investors could donate some amount from their deposits through the token. However, after the hype, the creators and influencers sold out, and the token’s price plummeted. The investors lost thousands, and the scandal opened the risk associated with crypto projects backed by influencers.

How to Protect Yourself from Crypto Scams

While cryptocurrency provides high opportunities, it also carries some risks. Here is how you can avoid falling into the scam trap:

  • Research Before Investment: Never invest in a project without checking its legitimacy.
  • Beware of unrealistic promises: A high return with low risk means a scam.
  • Use Only Trustworthy Exchanges: Be wary of lesser-known, unregulated exchanges and wallets to avoid cryptocurrency fraud.
  • Check for transparency: Genuine projects have whitepapers, ownership details, and active communities.
  • Avoid hype investments: Tokens and projects endorsed by influencers are always bad investments, as they mostly belong to the category of pump-and-dump.
  • Secure your money: Keep high-value crypto amounts in a hardware wallet, as well as ensure two-factor authentication on your account.

How to report a scam

In case you suspect or have already been a victim of a crypto scam, reporting it is extremely important. Contact the local police and provide all relevant evidence, such as transaction details and communications. The FBI’s Internet Crime Complaint Center (IC3) unit handles complaints related to Internet crimes, including cryptocurrency fraud. You can report online, and they will review it for possible investigation. The Commodity Futures Trading Commission Whistleblower Program also deals with illegal activities in financial markets, including cryptocurrency.

For additional support, visit Whitehatrecoverie to recover your lost assets. Don’t wait; protect your crypto investments and help make the digital space safer for everyone.

Final Thoughts

Cryptocurrency scams have stolen billions of investors’ funds through Ponzi schemes, fraudulent exchanges, and fake projects. These incidents highlight the risks in the crypto market and the importance of caution. Regulations are getting harder, but the scammers continue to evolve; hence, investor awareness remains the key. To stay protected, always research before investments, use trusted platforms, and be alert to schemes promising unrealistically high returns. Awareness and due diligence are the best self-defense against crypto fraud.

Stay safe and invest wisely!

FAQs

Crypto scams are based on trust and ignorance among investors. Scammers often guarantee high returns and vanish later with investors' funds. They might emotionally blackmail the victim before going missing with their funds. To prevent crypto scams, authenticate sources, verify URLs, and never give away private keys. Be cautious of guaranteed returns and too-good-to-be-true offers.

A cautious and rigorous approach is required to identify crypto scams. Always be cautious about projects promising unrealistic returns with little to no risk or lacking transparency. Look for active communities on social media and check for positive reviews. Scams usually have either fake or weakly managed communities. Thus, always do due diligence and ensure that the project has verifiable professional information before investing.

A crypto Ponzi scheme promises guaranteed high returns with little to no risk and relies on recruiting new investors to pay earlier ones. They limit withdrawals, feature celebrity endorsements, and run through social media or private groups to avoid detection. If an investment lacks clear financial reports or pressures you to recruit others, it's likely a scam.

If you want to protect your cryptocurrency, it becomes essential to get in touch with local police. You can report it to agencies like the FBI, FTC, or SEC. They will contact you through your submitted details if they need more information. Share your experience on social media platforms and crypto forums to raise awareness and prevent others from falling victim to similar scams. 

For any services related to such scams, feel free to check out our website for professional help in handling financial or crypto fraud. Taking the time to seek expert advice thoroughly can help you make informed decisions and safeguard your financial future.