Top 5 biggest scams in the crypto world
Hello, my dear readers, faithful followers, and those who will soon become so!
Today we will cover a very interesting topic that will certainly intrigue you, namely "Top 5 biggest scams in the crypto world". I think this topic is very interesting, but also very instructive because it talks about the fact that caution is never enough in crypto waters and emphasizes one very important item, which is DYOR. Through this article, you will see how some people took advantage of human inattention, and in some cases we can say human stupidity and greed, and cashed in on their plans very well, leaving behind devastation in the crypto world and the wallets of those people who put their trust in them. Let's start in order and with fraud number 5, then we will count down to fraud number 1.
Scam number 5: Pincoin and iFan
This scam took place in Vietnam and it was about the Modern Tech company that offered two Initial Coin Offerings (ICO) where two new coins called Pincoin and iFan would be sold. The first of those two coins offered a dizzying monthly return of 40% (which borders on the impossible), while the second coin was supposed to serve as the fuel that would power the new social network for celebrities, in addition, a percentage of 8% was offered for each person that you manage to persuade to join the network. In order to be able to log into the platform at all, you had to invest a minimum of $1,000 and of course in the aforementioned tokens whose value was never even close to the paid sum of $1,000. The fraudsters managed to collect an amount of $660,000,000 which was paid by about 32,000 poor, defrauded investors. After a few months, the team consisting of 7 Vietnamese nationals stopped paying the promised sums and disappeared without a trace, leaving behind only a very nicely decorated functional website with a very suspicious inscription that read: "The PIN Project is about building an online collaborative consumption platform for the global community, based on principles of Sharing Economy, Blockchain Technology, and Crypto Currency".
There was no sign of any advisors or founders on the page that should be in the white paper, which was very nicely put together, but if you analyzed it a little deeper it was worth nothing.
What really happened here???
So this is about the classic so-called PYRAMID FRAUD where the oldest, first investors are the only ones who benefit from the entire project to the detriment of those later investors. The members of the panel had to continuously introduce new members whose deposits covered the investment costs of those first members and as soon as the costs became too high and the new members did not have time to patch the holes with their deposits, the whole pyramid collapsed and the founders ran away with the money.
Scam number 4: BitClub Network
This fraud took place in the period from 2014 to 2019, i.e. a full five years, and about $722,000,000 was extracted and stolen from investors. This was a scam that promised income from cloud mining.
What exactly would cloud mining be?
It is about the fact that the investors do not have to buy the mining equipment, but they pay the people who already have the equipment part of the costs, and depending on the amount of money the investors pay the miners, they also get a part of the profit. I will explain how BitClub Network extracted money from people and what exactly it promised them in the following sentences. As we have already stated, they promised people income from cloud mining and offered them plans ranging from $50 to $100,000 with a profit of 5-12% on the invested amount. In addition to investors giving their money, they were also encouraged to introduce new members to mining and were promised a share of the income from these new members. PYRAMID FRAUD at work again as you can tell. Of course, when the new members could no longer pay off the old ones, the whole pyramid collapsed. US authorities intervened and began investigating the BitClub Network and the lies began to come to light. It was revealed that cloud mining never existed and that the videos and images promoted by BitClub Network members and promoters actually belonged to another, real mining company and that the videos and images were stolen.
Matthew Brent Goettsche was one of the arrested founders of the BitClub Network and when he was brought to justice, he stated that the "marks" of their network were "stupid people" who they called "sheep", so you can see for yourself what they are like people and what they are willing to do to get money and how careful one should be when engaging in any monetary transactions over the internet.
Scam number 3: Thodex
This scam took place in Turkey through a crypto exchange called Thodex founded in 2017 by Faruk Fatih Özer and a total of about $2 Billion was stolen from 100,000 investors. Namely, in April 2021, when Bitcoin reached its highest heights and reached ATH $62,000 Thodex exchange closed its operations for a period of 6 hours due to the so-called maintenance, but that period of six hours was extended to 5 days, and so on until the exchange office was completely closed.
What actually happened???
The owner and founder Faruk left Turkey in an unknown direction and took $2 billion with him and used it for private purposes. More than 60 people were arrested then, but unfortunately, Mr. Faruk Fatih Özer himself has not been caught to this day. He was sentenced in absentia under Turkish law to a prison sentence of 40,000 years. As you can see, there is no leniency for criminals in Turkey and the punishments are merciless, so you, dear readers, will see for yourself whether it is worth committing a crime there.
Scam number 2: PlusToken
This scam took place in Southeast Asia, specifically in China, Cambodia, Malaysia, Vanuatu, and Vietnam, and it's safe to say that it was one of the biggest crypto-related scams of 2019. The administrators of this crypto exchange and wallet stole about $3 Billion from more than 3,000,000 investors.
What happened here???
This scam was specific for one thing, and probably because of it, it was so successful, and that was that the administrators did not base their advertising on electronic media, as is common in the crypto world, but instead advertised through physical advertising (supermarkets, billboards) and held face-to-face meetings with their "clients". This method was very successful because it created a false sense of security among investors and lowered their level of suspicion to the lowest branches because it was not expected that someone who meets you face to face could be a fraud. PlusToken was, of course, as you already guessed, a PYRAMID SCAM that could only survive as long as new investors brought in new capital through investments. As soon as the costs exceeded the investments, this whole system collapsed like a house of cards. But how did it come about?
Already in the middle of 2019, problems appeared when investors try to withdraw funds from the exchange, which the administrators explained by the fact that there was a problem with the miners who mined the coin, but after a little while, they did not even bother to explain the problems anymore but disappeared together with more of $3 Billion. However, here the criminals did not manage to escape justice, because 109 administrators fell into the hands of the Chinese authorities and received prison terms of up to 11 years.
One very interesting fact related to PlusToken is that even the price of Bitcoin fell in that year thanks to PlusToken's fraud.
Scam number 1: Onecoin and CryptoQueen! The biggest scam of all time!!!
As we mentioned in the title, this is the biggest fraud in the crypto world, which was carried out by Dr. Ruja Ignatova also known as the crypto queen. Dr. Ruja was a woman who has a high education obtained from Oxford and worked in large and famous companies in high management, so her education and previous jobs were almost the only things that she did not invent, unlike OneCoin and the whole movement she created around it.
The fame surrounding OneCoin was so great that Dr. Ruja raised it to the level of a cult or religion because its investors, in addition to investing money, followed Dr. Ruja like a new Messiah who came to free them from the shackles and leads them to the path of financial freedom. She appeared at seminars like some kind of rock star or Hollywood actress and with her speech mesmerized the listeners and threw them almost into a trance and led them to invest huge sums of money, even at the cost of mortgages, promising them a bright future. Once she even performed at Wembley Stadium, which was full of fans, so you can see for yourself how much of a crowd she managed to seduce. When you type her name on Google, her picture on the cover of Forbes magazine pops up, which of course was just a hoax, because Forbes never interviewed her.
OneCoin has been promoted around the world as the Bitcoin killer and the best and biggest cryptocurrency ever and has gained a loyal following everywhere, even in Africa.
But what was OneCoin really???
OneCoin was, and still is, because UNFORTUNATELY OneCoin still exists, a MULTI-LEVEL MARKETING SCAM. That coin could never be mined, nor was it listed on any crypto exchange, nor could it be exchanged for crypto or fiat on OneCoin's own exchange because it was always under maintenance and repair. The code that OneCoin was written in was plain SQL, not blockchain code, which defeats the whole purpose of crypto because SQL code can be changed and manipulated. How then is Dr. Ruja managed to deceive more than 3,000,000 people and earn somewhere between 4 to 15 billion dollars??? The success consisted of the fact that she hired hundreds of professionals from the MLM world who advertised and promoted OneCoin all over the world, but that was not only responsible for the success, Karizma of Dr. Ruja also contributed a lot to it. Dr. Ruja was very well educated and very sweet-talking and staged large conferences with thousands of people where she gave her magical speeches.
How was money extracted from investors???
Financial education packages were sold, and these packages gave users the right to mine OneCoin at prices ranging from $100 to $100,000, which of course was all fiction. Sometime in 2017, law enforcement agencies around the world were on the trail to uncover the fraud and Dr. Ruja Ignatova disappears without a trace, taking between 4 and 15 billion dollars with her. Her last known destination was Athens, Greece, where she arrived by plane from Bulgaria, and then all trace of her was lost. Her brother takes over the helm of OneCoin but is soon arrested and agrees to cooperate in order to reduce his sentence. To this day, no one knows where Dr. Ruja is and where the missing money is hidden, but despite everything, OneCoin managed to survive and people around the world still believe in its success and invest and lose money in vain. Here is the link if you want to check for yourselves.
Conclusion
As you could see through the article, my dear readers, the crypto world is not immune to scams, moreover, in the digital world it is easier to convince a person of something and to sell him a lie than in the real world, and people lose money on the Internet every day by investing in various scams.
Don't give up investing in cryptocurrencies because of this and don't think that crypto is a scam and that everything related to it is a scam because despite everything there are people in the crypto world who are honest and there are crypto exchanges and crypto projects like Bitcoin or Ethereum that will enable you to make a nice profit if you know what to do and how to invest.
Each of us can be scammed at some point, but always remember that the internet is deceptive, and crypto even more so, so be very careful and DYOR before any investment.
Until the next reading
Neo77
