The biggest crypto scams have cost investors billions through fake investment schemes and fraudulent ICOs. These scams teach us to watch for warning signs and protect our money.
This article looks at some of the biggest crypto scams in history. It explains how they happened, who was behind them, and what impact they had on the crypto community.
Biggest Crypto Scams of All Time
Now, we will explore the largest crypto frauds:
1. BitConnect: The Infamous Ponzi Scheme
- Year: 2016–2018
- Stolen Funds: €3.4 billion
BitConnect presented itself as a lending platform, promising high returns through its token, BCC. It claimed investors could earn daily profits up to 1%, regardless of market conditions. These promises attracted many people looking for quick money.
In reality, it was a classic Ponzi scheme. Funds from new investors were used to pay earlier ones. BitConnect promoted a fake trading algorithm that supposedly guaranteed steady profits, building user trust.
By 2018, authorities had started investigating, and the platform had shut down. Thousands of investors lost their money, and most of the stolen funds were never recovered.
BitConnect has since become a symbol of false promises in cryptocurrency, reminding us to be cautious of offers that sound too good to be true.
2. OneCoin: A Multi-Billion-Euro Scam
- Year: 2014–2017
- Stolen Funds: Over €4 billion
OneCoin promised to be the “Bitcoin killer” and offered high returns to attract investors. However, it was not a real cryptocurrency. OneCoin had no blockchain or decentralized ledger. Instead, it sold educational packages that included tokens, claiming they had value within its system.
Ruja Ignatova, known as the “Cryptoqueen,” led the scheme. She gained trust by organizing flashy events and glamorous conferences, promising a new financial future. Many people believed in her vision, making OneCoin a huge investor draw.
In 2017, Ignatova disappeared, leaving no trace behind. Some believe she took many of the stolen funds, while others think she has adopted a new identity in a country with weak extradition laws.
Although some of her associates faced legal action, much of the stolen money is still unaccounted for. OneCoin’s collapse is a reminder to carefully check any investment opportunity, especially when it seems too good to be true.
3. Mt. Gox Hack: A Devastating Theft
- Year: 2014
- Stolen Funds: €370 million
Mt. Gox, once the largest Bitcoin exchange, handled over 70% of Bitcoin transactions. In 2014, hackers took advantage of weaknesses in the platform’s security and stole 850,000 Bitcoins. This breach exposed the risks of using centralized exchanges and raised concerns about their security.
Although Mt. Gox’s CEO, Mark Karpelès, faced criticism, he was not found responsible for the hack. Legal proceedings lasted for years, with victims still waiting to be compensated from the recovered funds.
This incident serves as a cautionary tale about the dangers of storing assets on centralized platforms. Without proper security, these platforms can lead to major losses.
4. PlusToken: The Chinese Scam that Fooled Millions
- Year: 2018–2019
- Stolen Funds: €2.8 billion
PlusToken was a cryptocurrency wallet that promised high returns using a complex algorithm. It attracted millions of investors, mainly from Asia, by claiming to be a legitimate platform. It turned out to be a classic Ponzi scheme.
When PlusToken collapsed in 2019, investors lost access to their funds. Although several people were arrested, the main figures behind the scam were never fully caught. The scale of the fraud and its sophisticated marketing made it one of the biggest cryptocurrency scams in history.
5. QuadrigaCX: A Mystery Beyond Fraud
- Year: 2019
- Stolen Funds: €140 million
QuadrigaCX was the largest cryptocurrency exchange in Canada, operated by Gerald Cotten.
After Cotten’s sudden death in 2019, it was revealed that the exchange could not access €140 million in customer funds. This was because Cotten was the only one with the private keys to those funds.
The news shocked users and raised many questions. Investigations showed poor financial management, and some found that Cotten had transferred assets to his own accounts before his death. This raised suspicions about the exchange’s operations even before his passing.
Though there were rumors that Cotten faked his death, no evidence has been found to support this. Authorities continue investigating, but many users doubt they will recover their funds.
6. The DAO Hack: A Smart Contract Flaw
- Year: 2016
- Stolen Funds: €50 million
The DAO (Decentralized Autonomous Organization) was a major project on the Ethereum blockchain. Its goal was to build a decentralized venture capital fund, where token holders could make decisions. A flaw in the smart contract code allowed hackers to steal €50 million worth of Ether.
This hack caused a split in the Ethereum community, leading to a hard fork. As a result, two versions of Ethereum emerged: Ethereum (ETH) and Ethereum Classic (ETC).
While the attack wasn’t based on fraud, it highlighted the need for thorough security checks in smart contracts to prevent future incidents.
7. BitClub Network: Mining Scam
- Year: 2014–2019
- Stolen Funds: €670 million
BitClub Network claimed to pool money for cryptocurrency mining and promised regular returns. The founders fabricated mining operations and used new investments to pay earlier investors, keeping the funds for themselves.
In 2019, authorities arrested the main figures behind BitClub Network and shut down the operation. This crypto scam serves as a reminder to question offers of consistent profits without clear evidence. Always research and confirm the legitimacy of any investment opportunity.
8. Thodex Exchange Exit Scam
- Year: 2021
- Stolen Funds: €1.9 billion
Thodex was a cryptocurrency exchange in Turkey that suddenly shut down, leaving over 400,000 users unable to access their funds. The CEO, Faruk Fatih Özer, fled the country, reportedly taking €1.9 billion in crypto assets.
Recently, this was one of the largest crypto scams, and Turkish authorities launched an investigation. Much of the stolen money remains unrecovered.
The Thodex scam highlights the importance of thorough research before trusting any cryptocurrency exchange, especially lesser-known platforms.
9. Coincheck Hack
- Year: 2018
- Stolen Funds: €430 million
Coincheck, a cryptocurrency exchange from Japan, was the victim of one of the biggest hacks in crypto history. Hackers stole €430 million worth of NEM tokens. The attack happened because the exchange had weak security, including the lack of a multi-signature system.
Unlike other cases, Coincheck reimbursed its users, helping to restore some trust in the platform. This hack serves as a reminder of the importance of strong security to protect user funds.
10. Cryptsy: An Insider Fraud
- Year: 2014–2016
- Stolen Funds: €6 million
Cryptsy, a cryptocurrency exchange based in the U.S., shut down in 2016, claiming it had been hacked. Further investigations revealed that the CEO, Paul Vernon, had actually embezzled the funds and fled the country.
Conclusion About The Biggest Crypto Scams
The largest crypto scams, like BitConnect, OneCoin, and Mt. Gox, have cost investors billions and revealed the dangers of fraudulent schemes and poor security.
These incidents show the importance of being careful when choosing where to invest. Always research, verify claims, and use platforms with strong security. By learning from scams like the Thodex exit and the Coincheck hack, you can better protect your investments in the cryptocurrency field.
FAQs About Cryptocurrency Scams
What is a cryptocurrency scam?
A crypto crypto fraud is a fraudulent scheme that tricks people into losing money or personal details, like fake investments or exchanges.
How can I spot a cryptocurrency scam?
Watch out for promises of guaranteed returns, lack of transparency, and unregulated platforms. Always research before investing.
Are cryptocurrency exchanges safe?
Not all exchanges are safe. Use well-known, regulated exchanges with strong security.
What should I do if I fall for a crypto fraud?
Report it to local authorities or regulators and keep records of your transactions.
Can I recover money lost in a crypto scam?
Recovering funds can be difficult, but reporting the scam may help increase the chances of recovery. Many victims, don’t get their money back.