In this article, we will break-down 5 of the most characteristics scams that ever occurred in the cryptocurrency world. Scams are ranked based on factors like; Amount of users they scammed; the Amount of money they stole; Based on the impact it has on the mainstream and cryptocurrency world.
*Keep in mind that the numbers are approximate, most often we don’t know exact numbers. The ranking is based on our estimations.
1. OneCoin
OneCoin is such a surreal scam that it has to be first in our list. To start it off it was never a cryptocurrency (means it got no blockchain) however for years to this day it is promoted as a cryptocurrency with great success. According to unofficial sources they’ve scammed more than $19.4b out of OneCoin users. Official sources are talking about $4.9b, however, the officials are working with leaked papers that have the data from 2014 to 2017, not including the boom in 2018 and 2019. Yes, that’s true the OneCoin scam is working to this day. Despite their original CEO went missing in 2017, despite their alternative CEO being arrested for fraud and money laundering. The scams continue. They are selling worthless tokens in the form of “educational packages” promising it’s members high returns. The scam was never closed and there are still “leaders” that are trying to bait more people into the system to scam money of them. We wrote a full overview of that scam if you want to check it out click here.
amount scammed: $4.9–19.4b
users scammed: 3 000 000
2. Bitconnect
Hey, Hey, Hey! Everyone in crypto space knows Bitconnect. When you think of a cryptocurrency scam you instantly think of a Bitconnect. It was so popular thanks to their extravagant ceremony and big scammy YouTubers promoting it. Carlos Matos, the man who made the Bitconnect a meme, it’s mostly thanks to him that Bitconnect is so widely known in crypto space till today. It was released in 2016 as a so-called lending platform a proper Ponzi-scheme. During the time it runs, it was promoted by huge YouTubers that were earning money through ref links. CryptoNick, Trevon James, and Craig Grant were actively promoting it. They scammed around $3M combined from their communities. On January 3, 2018, Texas State Securities Board issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements. Only 14 days after the Bitconnect exit scammed and the price crashed 92% to eventually drop to 0. Right now the Bitconnect is mostly remembered as one of the greatest memes in the space.
amount scammed: $2.5–3.5b
users scammed: 1 500 000
3. PlusToken
Another cryptocurrency Ponzi scheme PlusToken was a “high-yield investment program”. The majority of their presence was in China and Korea. The scheme offered 9% to 18% monthly returns on investment to unsuspecting Asian people. Their approach was different than as for example Bitconnect, they focused more on offline meetings and events to talk face to face with potential investors. This way they were able to create a big userbase of investors even outside the crypto world. At the end of June 2019, the first problems started to occur. People were having trouble withdrawing their profits from the platform. The PlusToken team tried to hide the fact that they are ready to exit scam and blamed the miners. But not long after it, they’ve officially run away with more than $3b. Huge amounts of BTC, ETH, and EOS. Some people believe that they are the reason BTC dumped in 2019 as they were are actively selling large amounts of BTC. Six of the team members were tracked down and given back to the Chinese authorities to put them into the trial. The exit scam transaction of PlusToken carried a note: “ Sorry, we have run”.
amount scammed: $3b
users scammed: 100 000
4. Bitcoin Savings & Trust
Perhaps most of the CT never heard about this Ponzi because it was launched in the very early days of Bitcoin in 2011, however, it was a precursor that showed people that’s crypto is a perfect target for people that are ready to take advantage of new space with lots of uneducated people. The scam was set up by Trendon Shavers known as “Pirate”. He was claiming that he is selling BTC to some local buyers and he needs more BTC to provide them liquidity. People started to give him their money. In theory, he would sell them OTC and rebuy for a better price at the market and gave people as much as 7% more weekly. He eventually announced a default of BST on August 28, 2012. The vast majority of the money was never restored to the users and it was proved that the money moved towards: rent, car-related expenses, utilities, retail purchases, casinos, and meals. At that time to accumulate 700 000 BTC at one time was huge, since the crypto space was much smaller than it is today.
In July 2013 the SEC charged Trendon Shavers with defrauding investors in a Ponzi scheme and sentence Trendon to 18 months of jail.
amount scammed: $5.8b (In today’s valuation)
users scammed: 10 000
5. Pincoin and iFan
Pincoin and iFan where tho ICOs run by the same company Modern Tech. The companies were offering 48% of a profit for investors just after a month and full investment recovery after 4 months. 8% commission for referral program is a must-have for a proper ponzi scam. To lure people in they organized several offline events all over Asia to gather a proper userbase. iFan was supposed to be a celebrity app to connect with their fans and sell their merchandise. Shortly after the company run out of new victims entering their Ponzi they’ve stopped to paid out people, media awareness raised and Modern Tech was accused by several reports as being a Ponzi scheme. The founders were able to steal as much as $660M. There were many protests organized by the victims of a scam outside of their office in Vietnam.
amount scammed: $660M
users scammed: 32 000
I hope you enjoyed our shortlist. Sadly crypto is a perfect shelter for scammers to attack poor victims easy as never before. In my eyes, all those scams are damaging the crypto space a lot by putting a false “scam” badge on crypto. It seems like there is an endless resource of victims that will believe in prop crypto Ponzi.
Thank you, everyone, for reading
Benji from DAO Makers