The biggest cryptocurrency scams


More and more people are becoming interested in the cryptocurrency industry. Most often they hear about a potentially large and quick profit, and forget about the risk that investing always involves. So they downplay their inexperience, which is why this group most often falls victim to numerous scammers who want to grab their savings. What were the biggest cryptocurrency scams in history?

Cryptocurrency scams – OneCoin

OneCoin is perhaps the biggest example of a pyramid scheme. Its roots can be found in 2014. The project was based in Sofia and operated as a marketing network. Its members received commissions for attracting other investors. These, in turn, had to buy special cryptocurrency packages. As many as three million participants around the world operated within the network.

Thus, a company’s cryptocurrency was created completely based on fraud. Big returns and minimal risk were promised, but this business was just a financial pyramid scheme. Investors became victims at a time when the creators had already become properly rich.

In total, the project generated over US $ 4 billion in revenue from the sale of cryptocurrency packages. Most of this amount was obtained in the years 2014-2016, these were the times when Bitcoin was not as popular as it is today, so the lack of knowledge of the subject in a wider group of people and the naivety of beginner investors were used here.

Interestingly, OneCoin disappeared from the network only in December 2019. The co-author of the project, Konstantin Ignatiev, is in custody and faces 90 years in prison. However, the main person responsible for OneCoin, i.e. his sister – Ruja, is wanted by an FBI arrest warrant. Trace of her is lost, there are suspicions that she managed to undergo plastic surgery and changed her identity.

Plus Token

PlusToken cannot be missing from the list of the biggest cryptocurrency scams. It was supposed to be a magic wallet multiplying cryptocurrencies. In fact, it was obviously a financial pyramid that just fell apart one day.

Its creators and promoters traveled the world advertising their product as „an artificial intelligence-based digital asset management application”. The user deposited cryptocurrencies, and an unreliable algorithm made the profits grow. At least in the app on the phone screen. Of course, there were additional bonuses offered to people who would attract new customers.

Suddenly, the payouts stopped on June 20, although the app was still running. Initially, the creators tried to convince users that these were temporary problems, then the funds from the Plus Token crypto wallet began to flow out to other addresses. The creators added the description „sorry we ran away” to one of the transactions. True, six Chinese citizens have fled to Vanuatu. However, Chinese police followed them to the island.

Despite the arrests, a person with access to Plus Token wallets remains at large. Funds from victims continue to travel through various addresses, mixers and exchanges to an unidentified recipient. In total, it was a scam worth more than $ 3 billion, and it only lasted for a few months in 2019.

Cryptocurrency scams known BitConnect

BitConnect turned out to be a worthless project, with investor losses exceeding $ 2.5 billion, although the platform announced a return of 120% per annum.

Initially, it was supposed to be a peer-to-peer lending platform for investing in Bitcoin, and later open source designed to provide many investment opportunities, and above all to achieve high solid income on the volatile cryptocurrency market. These plans were changed quickly.

At the end of December 2016, ICO BitConnect Coin was released. The security of the investment was to be ensured by its supply of 28 million coins, and its attractiveness was ensured by free transactions between users. The creators promised three possible ways to increase the invested capital. The first is simply having a cryptocurrency on a special BitConnect-QT wallet, which was to provide interest in return for help in maintaining security. The second is trade. The third one is BCC excavation.

The marketing was carried out extensively, and the declaration of an annual rate of return of 120% encouraged many customers. In December 2017, the capitalization of BCC was as much as USD 2.8 billion. Many famous personalities from the cryptocurrency world, including the creator of Ethereum, began to suggest that BitConnect was simply a financial pyramid.

Due to numerous accusations, a announcement was made in January 2018 about the closure of the credit platform due to negative pressure from market regulators. Within minutes of the announcement, the value of BCC fell by 95%. Investors suddenly realized that the venture had a lot of ambiguity, and with the closed BitConnect platform, Coins became useless. An FBI investigation into the case is ongoing, with 1.5 million BCC holders suddenly losing approximately $ 2.5 billion overnight.

Pincoin and iFan – known cryptocurrency scams

Another great scam in the history of cryptocurrencies, and more specifically the ICO model, took place in April 2018. Then 32,000 investors lost a total of $ 660 million. The fundraiser was organized by the Vietnamese company Modern Tech. First, it issued the Pincoin cryptocurrency that promised an immediate 40% monthly rate of return. The project allegedly built an online platform linking the advertising network, auction services, an investor portal and the direct selling market.

However, after its completion, the company immediately released a second token – iFan, which was to be a promotional social platform for celebrities. They were supposed to use it to promote content intended only for the fan community. After both ICOs were completed, the company left its office and disappeared with investors' money.