Top 10 Biggest Crypto Scams in History

We have seen a fair share of scams regarding fiat currencies. It was a little while before someone implemented the same thing with cryptocurrencies.

Now, we do not refer to hacks that sent almost $4 billion worth of crypto missing in 2022. These are outright scams like the MMM ponzi scheme and the like. They are often easily recognizable with a little background check that takes little time. However, like the victims, you would probably look at an advertisement promising 100% returns in 30 days or some bogus number.

Cryptocurrency scams have affected even the most sophisticated people, which is surprising. Let’s run through a few of the biggest crypto scams yet.

The Top 10 Crypto Scams

Cryptocurrencies can shoot up in market value and have massive returns for investors. It’s relatively easy to fall for scams, given these situations.

So, here are the top ten crypto scams by the amount stolen, from the biggest to the smallest:

Onecoin: $4 billion

Cryptoqueen wasn’t exactly a celebrity, at least not until she scammed investors out of $4 billion. She disappeared in 2017 and remained on the FBI’s “most wanted” list.

The OneCoin cryptocurrency scam was the brainchild of OneCoin Ltd. and OneLife Network Ltd. Ruja Ignatova, the founder of both companies, got away, but her cofounder, Sebastian Greenwood, was not so lucky. He was arrested in Thailand and is currently in a US jail.

OneCoin supporters have been asserting since 2014 that their Ponzi scheme is a legitimate cryptocurrency with a blockchain, and they predict it will outdo Bitcoin as the top digital currency.

This scam sold heavily hyped course materials. However, the real deal was in recruiting more people to get paid. It was clear that OneCoin was a ponzi scheme.

Ruja Ignatova made bold claims about OneCoin, saying it would have an e-wallet and be available for payments. Yet, there was no actual blockchain. That did not stop the founder from establishing the OneCoin Exchange (xcoinx).

Why float an exchange when there are no actual coins to trade? Like many ponzi schemes, OneCoin crashed in 2017 after denying many withdrawal requests on its exchange.

Bitconnect: $2.4 billion

How do you create a scheme worth $2.4 billion? You should ask Bitconnect for that information. It executed its scam so well that people were willing to part with their cryptocurrencies.

The unfortunate scam closed in 2018, but not before gulping hundreds of millions of dollars. It would have made away with $766 million if given a chance.

Bitconnect was a ponzi scheme, and it was clear from the start that it survived by actively recruiting new investors. The high-yield system promised 40% earned interest via its multi-referral network.

It did not take long for the North Carolina Secretary of State’s Securities Division to lend its voice. The regulator advised people to keep away from the scheme. Also, the warning was necessary, given the unauthorized sale of securities.

The last straw came when Bitconnect attempted to sell 11.76 million BCCX, its native token. That would have taken away $766 million.

Thodex: $2 billion

Things began with a temporary closure to facilitate a sales process. That came shortly after a six-hour downtime for maintenance. Still, users took to Twitter to cry foul.

The Turkish cryptocurrency exchange maintained that it was all part of a bigger plan to incorporate “globally renowned banks.” It did not take long for police investigations to reveal that the CEO, Faruk Fatih Özer, had flown out of the country. He had in his possession $2 billion worth of digital assets.

👇 Watch: Security footage shows Thodex CEO fleeing Turkey after $2b heist 👇

The reality began emerging. Over 300,000 users could not transact on the platform after Thodex expressed its inability to maintain financial transactions.

Shortly before its collapse, Thodex launched a campaign to give dogecoin to new users. It later claimed to have given away 4 million coins, but users complained of never receiving them.

Bitclub Network: $722 million

According to the Department of Justice, this crypto scam defrauded people of $722 million. It successfully executed its scheme from 2014 to 2019. That is a solid five years of running the scam.

So, what exactly did Bitclub put forward? The founders pushed a narrative of the most innovative and community-based way to earn cryptocurrency. They claimed to offer shares in purported cryptocurrency mining pools.

The company did not stop there. It went on to reward investors who recruited others into the scheme. Clearly, a ponzi ladder was being built.

The Department of Justice accused Bitclub Network of using fictitious figures as earnings from bitcoin mining. That gave investors the impression that the scheme worked. Nonetheless, one of the creators, Romanian Silviu Catalin Balaci, admitted to selling unregistered securities via the scheme.

Modern Tech: $666 million

This scam was executed in classic style. The company behind it cleared out its building a month before angry investors besieged it. However, it made away with $666 million.

Modern Tech advertised a new coin with high returns and a short payback period. The company branded itself as the official Vietnam representative for the initial coin offerings of iFan and Pincoin. Yet, little did the investors know that they were in for a ponzi scheme.

This company went on to create a false perception of the rising value of its platform. However, no one could withdraw or trade the tokens for cash.

One policy change from the company sent the token crashing down to one penny. That caused 32,000 investors to lose their investments, given that they had to pay a minimum of $1,000 upfront.

AriseBank: $600 million

That figure could have reached $1 billion had the Securities and Exchange Commission not intervened. AriseBank targeted $1 billion with its initial coin offering but was alleged to have gotten $600 million from early investors. It could’ve become the world’s first decentralized bank if given a chance.

So, what stopped it in its tracks? The Securities and Exchange Commission found fraudulent filings from AriseBank. For example, the two banks AriseBank claimed to have acquired do not exist.

Then, we have allegations that there was no paperwork at the financial institution. A former executive who remained anonymous alleged that the CEO used the LLC registration of his other company, Dotoji, to do business.

His claim of raising $600 million from the ICO was false. Ultimately, he was indicted in 2018 for defrauding investors of over $4 million.

EmpiresX: $100 million

This cryptocurrency platform raised $100 million from investors before heading down the drain as another investment fraud. It did several things wrong, including failing to register the company with the US Securities and Exchange Commission.

EmpiresX claimed to operate a trading bot that uses artificial and human intelligence. The promise was “guaranteed returns” on the investments. However, investigations pointed to a ponzi scheme.

The cryptocurrency exchange paid earlier investors with money from the newer recruits. There was no trading bot, as earlier claims suggested.

The head trader of EmpiresX pleaded guilty to charges of defrauding investors of $100 million. It was a one-count charge of conspiracy to commit securities fraud.

Mining Capital Coin: $62 million

The US Department of Justice charged the CEO of Mining Capital Coin (MCC) with a $62 million investment fraud. This came shortly before the SEC issued fraud allegations against the MCC’s co-founder and two other companies owned by the founder.

What was the allegation? The SEC accused MCC of selling mining packages with a one percent daily return paid over a year. It discovered discrepancies in the company’s promises.

First, users were promised profits in Bitcoin. MCC soon changed it to its native capital coin, redeemable on Bitchain, a fake cryptocurrency exchange run by MCC’s CEO.

SQUID token: $3.36 million

The SQUID GAME TV show was a hit for Netflix. It took a little while for the creator or creators of the SQUID token to ride on that success. Given the fan devotion, the token pulled investments worth $3.36 million.

Price graph of Squid Game token that shows what happened at the time of the rug pull.

The SQUID token supposedly granted access to a play-to-earn game. It was not affiliated with the popular Squid Game, even though it gave that impression. Fans invested and poured in to get a feel for their favorite TV show, but this time, in the token.

All indications pointed to a rising value, making people double or triple their initial investments. Things went south when they discovered they were unable to sell their tokens.

All the investments, totaling $3.36 million, disappeared, and the SQUID token lost its value. There was nothing left to guarantee any returns to the investors.

Baller Ape NFT: $2.6 million

The baller ape scam was a simple case of rug pulling. Get as much money in and disappear. Things did not turn out well for Le Anh Tuan, as he was charged by the justice department.

Tuan was part of the baller ape club, selling NFTs as cartoon figures. However, the creators rug pulled the entire project and shut it down after the public sale. They made off with $2.6 million from investors.

Conclusion

The promise of massive returns on investment is often a red flag indicating cryptocurrency fraud. We have seen the false use of trading bots or the promise of more utilities, like in the EmpiresX and SQUID token cases. Nevertheless, most fraud cases often lead back to ponzi schemes.

Get your facts right before throwing investments into any crypto project. Although still a thin line, ensure that the platform is registered with the appropriate authorities, like the SEC.