Lately, we have been discussing different gift card scams and how to avoid them. The reason is that we care and don’t want you to lose your hard-earned money. Even for me, I have personally received different links recently, but I am sure they are attempts to steal from me. Today, I want to tell you about the five biggest crypto scams of all time.
These scams are not your everyday phishing attempts. These are the headline-grabbing scams that cost people billions and shook their trust in crypto trading. From fake investment schemes to massive exchange collapses, these cases remind us why caution is inevitable in the world of digital assets. There is a lot to learn in this article. Let’s get into it.
What is a Crypto Scam?
Crypto scams are more common than gift card scams because of their nature. Since crypto transactions are built on anonymity, it’s easier for scammers to be untraceable once they run away with the funds.
These scams come in different forms, such as fake ICOs, Ponzi schemes, pump-and-dump projects, or impersonation of trusted platforms. Once the funds are sent, there is often no way to reverse the transaction or recover the lost funds. That’s what makes crypto scams so dangerous.
The scammers rely on a mix of greed, urgency, and lack of regulation to deceive their victims. That’s why you need to stay informed, verify every platform you use, and never let fear of missing out cloud your judgment. Now, let’s look at the five most notorious cases in crypto history.
Types of Crypto Scams
Basically, we can categorize crypto scams into two forms. These are;
- Setups that encourage victims to willingly transfer their cryptocurrency to malicious con artists. Notable examples include crypto romance scams, fraudulent business, malicious investment opportunities, and address poisoning, among others.
- Deceitful schemes that attempt to gain access to victims’ cryptocurrency wallets or passwords. An example is phishing.
5 Biggest Crypto Scams of All Time
Now, let’s look at the biggest scams pulled in crypto in the past years. Here are the 5 biggest crypto scams in history;
- OneCoin
When it comes to crypto scams, OneCoin is arguably the biggest with its $4 billion theft. At the center of the scheme was Dr. Ruja Ignatova, a woman who convinced millions that she had created a one-of-a-kind cryptocurrency with high-tech blockchain technology. In reality, it was a carefully packaged lie.
OneCoin operated as a global Ponzi scheme disguised as a financial education platform. Investors were lured in with promises of exclusive training and tiered membership benefits. The supposed coin gained hype as the “Bitcoin killer,” but by the time the scam was exposed in 2017, OneCoin had defrauded investors of over $4 billion across 175 countries.
As the heat closed in, Dr. Ruja vanished in 2017 and remained one of the most wanted fugitives in the world. Her associates, including her brother, were arrested and charged. In a major twist, BBC reported in September 2023 that she was finally captured and sentenced to 20 years in prison. OneCoin is a classic example of how hype, authority, and misinformation can be used to manipulate people into funding a fraudulent crypto empire. It’s a sharp reminder that even the most polished projects can be a trap in disguise.
- Bitconnect
Bitconnect was another infamous Ponzi scheme that swindled billions from investors. The founder, Satish Kumbhani, attracted users by claiming to have an unbeatable trading algorithm. The scam operated a lending and exchange system where users were encouraged to buy Bitconnect Coin (BCC) with Bitcoin (BTC). They added different promises of guaranteed high returns.
To maintain the illusion, Bitconnect paid early investors with funds from new ones to encourage more potential members. At its peak, the platform launched an ICO called BitconnectX to expand its reach. However, it collapsed in 2018 when the entire scheme was exposed. The value of BCC plummeted to zero, and the platform was forced to shut down.
Kumbhani has since been arrested and is now facing legal consequences for orchestrating one of the largest crypto scams in history.
- BitPetite
BitPetite was another deceptive crypto platform that lured users with promises of high daily returns. The platform posed as an exchange and investment service. It encouraged users to deposit Bitcoin with the guarantee of earning consistent profits. However, the scheme only ran for several months in 2017 before it disappeared.
Its website went offline, social media accounts were wiped, and the founders vanished with millions of dollars in investor funds. To this day, the individuals behind BitPetite have not been identified or brought to justice. Although legal proceedings have been initiated against the business entity, enforcement is complicated by the anonymity of the people involved.
- Mt Gox
Mt Gox was once the world’s largest Bitcoin exchange, processing roughly 70 percent of all global Bitcoin transactions at its peak. It had built a massive user base and was widely trusted until early 2014, when it abruptly suspended withdrawals. Investigations revealed that Mt. Gox had been hacked for a while, resulting in the loss of approximately $450 million at the time of the hack.
The scale of the breach shocked the crypto world and led to the exchange filing for bankruptcy. Mark Karpelès, the CEO of Mt Gox, was arrested and faced trial, but the damage had already been done. Most investors never recovered their funds. The Mt. Gox collapse remains one of the most infamous events in the history of cryptocurrency.
- Thodex
Thodex was a Turkish cryptocurrency exchange launched in 2017 by Faruk Fatih Özer. By 2021, the platform had attracted over 100,000 users and reportedly handled more than $2.2 billion in assets. One of its most effective tactics was offering free Dogecoin to users who deposited funds. This strategy was an offer that drove massive sign-ups.
In April 2021, Thodex suddenly announced a six-hour maintenance window. That window stretched into days, and it quickly became clear that something was wrong. Investigations revealed that Özer had shut down the exchange, emptied its wallets, and fled the country with users’ funds.
To this day, Özer remains at large. Turkish authorities issued an international arrest warrant, and he faces serious prison time if found. The Thodex collapse is one of the most devastating exit scams in crypto history and a clear warning about trusting unregulated platforms with large sums of money.
How to Spot a Crypto Scammer.
There are ways to spot a crypto scammer. However, here are a few ways to spot a crypto scammer to stay safe;
- Carelessly Written White Papers
A carelessly written white paper is one of the easiest ways to spot a crypto scammer. Hence, it is advisable to always look out for the white paper of a project before you invest. Check if the projects, tokens, or exchanges are verified, and if the project has been around for a long time, to know if it is an authentic one or not.
- Phishing Attempts
Phishing attempts often come as links. However, they will appear to be emails or messages from seemingly legit crypto exchanges or wallets. The idea is to scope you and ask you to provide your seed phrase or private keys. Once they have these details, they will rob you of your crypto assets.
- Unreasonable Promises of High ROI
Crypto investment is not an overnight success. Hence, any crypto project that promises unreasonably high ROI in a very short time is suspicious. Any real project will acknowledge that patience is key in crypto trading if you want to enjoy massive returns. Also, it’s a volatile venture, which means your millions can come down as the market demands.
- Excessive Marketing
Excessive marketing is another way to identify a crypto scam. As seen with popular TV commercials, is the project pushing for more investors than giving details about its actual use case? Then, it’s probably a scam. A good crypto project will market itself and convince investors of why they should invest in it.
Tips to Stay Safe From Crypto Scammers
Here are helpful tips to stay safe from crypto scammers;
- Always conduct thorough research before investing in any cryptocurrency project.
- Ensure your crypto wallets are secure.
- Stay informed about the latest developments in the crypto space.
- Do not share your passwords or seed phrases with anyone.
- Trade on safe and verified exchanges only, like Ridima.
Conclusion
Now that you have learnt the 5 biggest crypto scams of all time, how to spot a scammer, and healthy tips to stay safe, what’s next? You have to prioritize optimum safety. For example, if you want to convert your crypto to cash, Ridima is the best place. Every transaction passes through three layers of security to protect users’ assets. Trade with Ridima today.
Reference;
5 Biggest Crypto Scams of All Time
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