Guest Post

What We’ve Learned From The Biggest Crypto Scams Ever

What We’ve Learned From The Biggest Crypto Scams Ever

The cryptocurrency sector’s reputation as a better alternative to the traditional industry has struggled because of scams. Unfortunately, some of the biggest blockchain networks and exchange platforms have fallen victim to heavy scams, sometimes forcing the platform to shut down completely. While some criminals breach blockchain networks to steal funds, others simply trick investors into making legit deposits into fraudulent projects.

A report from Web3 cybersecurity software company Certik revealed that crypto-related frauds and hacks hit $1.8 billion last year, at an average of $2.45 million per incident. The total was much higher in 2022, at $3.7 billion. These figures are worrisome for the average crypto enthusiast, especially people interested in new crypto projects and investments. Indeed, Alan Draper says that when researching new crypto coins to buy, it’s always important to be mindful that there is a large amount of risk involved. Fortunately, there are a few precautions investors may consider to reduce the risk of suffering a crypto scam.

The Biggest Crypto Scams Ever

The following are two of the biggest crypto scams in the industry’s history and how they were conducted:

OneCoin (2014 – 2017)

Launched by Dr. Ruja Ignatova and Sebastien Greenwood in 2014, OneCoin was a fraudulent Ponzi scheme. The company’s structure focused on paying early investors using money received from new registrants. Although it was touted as the next best altcoin, OneCoin had no actual blockchain or blockchain records and was not supported by any mining activity. The platform eventually shut down without notice in 2017 after receiving about $4 billion from at least 3.5 million victims. While Greenwood was sentenced to 20 years for wire fraud and money laundering last year, Ignatova has been on the run since 2017.

BitConnect (2016-2018)

The BitConnect crypto attracted several investors by promising heavy returns via a high-yield investment program. This was also a Ponzi scheme that paid early users with funds deposited by new users. Led by founder Satish Kumbhani, the platform sold the BitConnect Coin (BCC) to investors, telling them it had an undefeatable trading algorithm. BitConnect was later exposed as a Ponzi scheme, eventually shutting down in January 2018. Although it refunded customers in BCC, the value had fallen nearly 92%. BCC eventually dropped from a high of about $525 to less than $1. According to the United States Securities and Exchange Commission (SEC), BitConnect successfully defrauded investors of more than 325,000 BTC, worth about $2 billion at the time.

How to Avoid Common Crypto Scams

  • Do Your Own Research (DYOR): Prospective investors must maintain a habit of continuous research to reduce the risk of falling victim to a crypto scam. Simple research, including finding information online, reading whitepapers, and asking questions on social media forums, can provide much of the information needed to spot and avoid a crypto scam.
  • Use Trusted Platforms: Investors who stick to trusted exchange platforms can avoid crypto scams more easily. Many major crypto exchanges and marketplaces do plenty of due diligence before allowing new projects to trade on their platforms. Any coin officially launched or sold on a major crypto platform is likely not a scam.
  • Remain Skeptical: Users should remain cautious of flowery promises, especially those made by new crypto projects. Any project that guarantees profits or promises high returns is likely a scam and could eventually shut down with investors’ funds.
  • Take Investment Advice Carefully: Investment advice posted online may be engineered by a fraudulent crypto project but masked as neutral advice to avoid suspicion. Investors should ensure they properly scrutinize investment advice to check for accuracy and signs of sponsorship.


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Akansha Kesarwani