While we wait for the market to pick up and take off, your priority should be keeping your assets safe. Scammers and fraudsters prey on unsuspecting users. We’ve seen this trend over the last few years. In 2023 alone, these guys stole over $1 billion. And that trend doesn’t seem likely to stop anytime soon.
Crypto hackers use different methods to steal assets. Some of these methods have been repeated over the years. We identified some of these scamming schemes in our previous article on the top 10 biggest scams in crypto history. This article explores another 10 of the biggest scams to keep you alert and aware of the dubious methods used by criminals.
1) The FTX scam
We all know about FTX, founded and led by the disgraced Sam Bankman-Fried. FTX was a crypto exchange that, at its peak, rivaled Binance for market share. FTX had a significant impact within crypto and was one of the first crypto brands to attract A-list stars like Larry David, Tom Brady, Shaquille O’Neal, the Golden State Warriors, and Naomi Osaka.
Source: X
While it looked like a regular business on the surface, behind the curtain was an ugly balance sheet that showed FTX’s ties to Alameda Research, its sister company. Ultimately, FTX came crashing down along with billions of customer funds. The FTX saga was one of the intensifiers of the last bear market. Bankman-Fried is currently serving jail term for his role in the whole scheme.
2) Terra-Luna Scandal
The Terra scandal was another heavy moment from 2022 that brought crypto in the spotlight for all the bad reasons. Terra was a blockchain platform and a payment protocol for an algorithmic stablecoin. The LUNA and TerraUSDT networks collapsed in May 2022, clearing more than $50 billion of customer funds.
Terra’s UST stablecoin lost its peg to the dollar, which then triggered a massive sell-out. As a result, UST lost its value and caused the network to collapse.
Terraform Labs founder Do Kwon remains a key player in the collapse. He is waiting to be extradited to the United States or South Korea.
3) The QuadrigaCX situation
QuadrigaCX was one of the biggest Ponzi schemes in crypto. The project’s founder, Gerald Cotten, died in 2018, taking with him over $200 million in customer funds as only he had access to the keys.
However, a detailed investigation proved that QuadrigaCX was a fraud. Cotten had designed the project as a Ponzi scheme. He also used users’ funds for fake trading and to fund his lifestyle.
Source: X
4) The Africrypt Scam
Back in 2021, the Africrypt brothers, Ameer and Raees Cajee, pulled off a massive scam in South Africa. These guys claimed that their platform got hacked, which supposedly led to the loss of 70,000 BTC, worth about $3.6 billion.
Source: X
But here’s the thing: they didn’t just lose it. They pushed all those funds through a bunch of anonymous wallets to hide the trail. And the funds ended up in Dubai. The brothers later got in trouble in Switzerland for money laundering.
5) SafeMoon
SafeMoon was all over the news back in 2021. The project’s executives kept telling investors that their funds were “locked,” safe and sound. But, behind the scenes, they were withdrawing over $200 million for themselves, spending it on luxury cars and fancy houses.
Source: X
The SEC didn’t take this lightly and charged SafeMoon with fraud and selling unregistered crypto securities.
6) Prodeum
Prodeum was a crypto startup back in 2019. They claimed they planned to change the fruit and vegetable industry using Ethereum.
Source: X
But instead of changing anything, they disappeared, leaving just the word “penis” on their website. It was a classic exit scam, and the investors were left with nothing.
7) Pincoin and iFan
The Pincoin and iFan scandal was another highlight of 2018. Modern Tech launched two ICOs for Pincoin and iFan. They managed to raise a staggering $660 million from 32,000 investors.
Source: X
At first, they paid out returns in cash but then switched to iFan tokens, which were pretty much worthless. It turns out that it was all a Ponzi scheme, and the team disappeared after collecting all that money.
8) Celsius Network
Celsius was one of the top crypto lending platforms before its collapse in 2022. They hit the spotlight after pausing withdrawals and filing for bankruptcy. Celsius’s collapse erased about $4.7 billion from user funds.
Source: X
But that was far from their worst fate. Creditors got hit by phishing attacks during the company’s restructuring. Celsius now plans to return assets to customers and start a new Bitcoin mining company owned by the creditors.
9) Centra Tech
In 2017, Centra Tech made big promises about crypto debit cards and raised $25 million in an ICO. They even had celebrities like Mayweather and DJ Khaled promoting it. But it was all a scam. The founders ended up with sentences—8 years, 1 year.
10) The Mining Max scam
The last on our list is Mining Max, a US-based cryptocurrency mining firm that, in 2017, got busted by Korean prosecutors. They scammed investors out of $250 million, but only $70 million was spent on mining. The scam-hit 18,000 investors globally, and several suspects were arrested.
Source: X
This is the second part of this article. Here is the first part.
Conclusion
We’ve listed ten major frauds and hacks in crypto. What’s the lesson here? First, we can avoid falling prey to scams. How? By making sure you research every project and opportunity. Ensure you check out the tea’s background. Furthermore, it is a lie if it is too good to be true. This means avoiding projects with unreal promises. We always advise our readers to diversify their portfolios. This is a good risk management strategy. Never put all your funds in one spot.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
