While the crypto market can be quite exciting and profitable, it can also be a dangerous place. Hacks, NFT rug pulls, and other crypto scams are unfortunately quite common in this ecosystem.
According to Federal Trade Commission, “more than 46,000 people have reported losing over $1 billion in crypto to scams” since 2022. The biggest scams were investment-related frauds, followed by business and government impersonation scams. Interestingly, romance scams are also high on the list, so make sure not to send any crypto to your online love interest.
But this is not all.
- More than $30 billion was lost due to crypto crime in the past decade. That’s 30 times the UN’s earthquake appeal for Turkey, 20 times the cost of building the world’s tallest building, and 18 times Google’s YouTube acquisition.
- In 2022, crypto crime hit an all-time high of $12B stolen in 436 incidents. That’s equivalent to $1.4M lost every hour last year due to crypto-related crime.
- June is the most dangerous month for crypto investing, with 77 crypto crime incidents and $5.7B stolen in the last ten years.
- 2023 has the potential to reach a new all-time high, with more than $16B lost due to crypto crime. By 2025, this figure could reach nearly $20B.
- The US was the most targeted by cryptocurrency hackers, but Turkey lost the most dollars to crypto crime.
Data source: ChainPlay
Now, on to the list of the biggest and craziest crypto scams and hacks so far.
1. BitConnect Crypto Scam
BitConnect was a lending and exchange platform powered by BitConnect Coin founded by Satish Kumbhan. It advertised large profits and there was a lot of hype around it.
So much so that BitConnect’s annual ceremony in 2018 was turned into a meme when the investor Carlos Matos gave what could only be described as a very enthusiastic performance, raving about BitConnect.
However, BitConnect was soon under the suspicion of being a Ponzi scheme, which proved to be true. In February 2022, BitConnect founder was charged with orchestrating a global Ponzi scheme worth $2.4 billion. Not to mention he was added to the Bitcoin scammer list. That makes it the biggest crypto scam in history.
2. OneCoin Crypto Scam
OneCoin is another Ponzi Scheme that was presented as a cryptocurrency worth investing in. It was run by Ruja Ignatova from Bulgaria, known as the Cryptoqueen, who became one of the most famous scammers.
Her story is so insane that it reads like a movie plot.
After scamming investors out of $4 billion, she disappeared in 2017, never to be seen again. Currently, she’s on the FBI’s most wanted list and there’s a $100,000 reward to help find her, making her one of the biggest crypto scammers.
3. Bitclub Network Crypto Fraud
Bitclub network was advertised as “the most innovative & lucrative way to earn digital currency”. It was a community of people who wanted to make money with Bitcoin and other currencies.
However, Bitclub Network turned out to be a fraud. According to the IRS, “BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme.”
The team behind Bitclub Network scammed investors out of $722 million and has been charged with conspiracy to commit fraud.
That makes it one of the biggest scams in history.
4. Axie Infinity Hack
In July 2022, the popular play-to-earn game Axie Infinity was hacked. It is believed that a fake job offer led to the hack and it was linked to Lazarus, a known cybercrime group.
Hackers took control of the network and stole $600 million. The US government managed to recover $30 million and Sky Mavis reimbursed players who lost money.
5. Pincoin Scam
Pincoin was a cryptocurrency project focused on asset sharing. It promised an insanely high ROI of up to 312%, which is a major red flag because no project can promise a return on investment, let alone an ROI of that size.
Furthermore, the project had a recruitment system and multi-level structure which screams Ponzi Scheme. That was proven to be true by the financial scam directory Behindmlm.
$600 million was stolen from investors in the Pincoin Scam, making Pincoin one of the biggest frauds in history.
6. Thodex Scam
Thodex is a $2 billion scam that rocked the crypto market back in 2021. It ended up with its founder facing 40,000 years in prison.
Here’s what happened.
Thodex was a Turkish crypto exchange that had 400,000 users who actively traded on it. However, one day, it was announced that Thodex will be shut down for a couple of days due to maintenance, but that users shouldn’t worry about their investments.
Then, Fatih Özer, the founder, went offline and it became very clear that this was an exit scam.
7. Mining Capital Coin CEO Investment Fraud
One of the recent big crypto scams was allegedly committed by Mining Capital CEO Luiz Capuci Jr. He’s accessed of running a $62 million worth investment fraud and pyramid scheme.
His platform, Mining Capital, promised investors huge returns from mining crypto – 1% daily returns. However, he directed all the funds to his own crypto wallet and took every opportunity to extract money from investors to fund his lavish lifestyle. According to the US Department of Justice, there were more than 65,000 investors who were scammed.
Currently, Capuci is facing 45 years in prison if convicted.
8. SushiSwap Exit Scam
One of the biggest and well-known crypto scams that rocked the market was the bizarre SushiSwap rug pull in 2020 by Chef Nomi, its anonymous creator.
They removed a significant amount of tokens from the liquidity pool, 2.5 million SUSHI and 20,000 ETH to be exact, and cashed out. At that time, it was worth about $13 million.
The community was outraged and accused them of scamming, which Chef Nomi denied, ensuring them it wasn’t an exit scam.
Then, the mysterious Chef transferred control over to Sam Bankman-Fried, returned the money, and was very apologetic in his Tweets.
In the words of Chef Nomi, “To everyone. I fucked up. And I am sorry.” Chef Nomi further wrote, “I would like to apologize to everyone who I have caused troubles to. I was emotional, I was greedy, I was afraid. I made bad controversial decisions under pressure. And it hurt everyone. I failed your expectation and I am sorry.”
9. SQUID Token Scam
The SQUID token, based on the viral Netflix TV show Squid Game, was advertised as a token that will grant access to a play-to-earn game. Even though the token wasn’t affiliated with Squid Game, it gave the impression it was reputable because of the connection. Fans of the TV show rushed to invest in it.
Because the token was rapidly going up in value, people were doubling and tripling their initial investment. However, they found out they weren’t able to sell their SQUID tokens.
Then suddenly, all the money people invested in the SQUID token, which totaled $3.36 million, disappeared. In mere minutes, the token essentially lost all of its value.
Interestingly, one of the investors who was scammed, Hartford, wasn’t angry about the money he lost. “You live by the sword, you die by the sword. That’s crypto.”, he said to Wired.
10. Day of Defeat Rug Pull
Day of Defeat is a token that promised its holders a “10,000,000X price increase”. Sounds too good to be true? Well, it is.
This project ended up being a $1.3 million rug pull. The team behind the project claimed they were hacked, but nobody believed it.
What’s so tragic about it is the info on Day of Defeat’s website clearly pointed to a scam, but people were blinded by promises of big returns. For example, in the FAQ section, the team behind the project said, “we promise that the team will not redeem the pool fund”, but that was exactly what they did.
11. Baller Apes Scam
Le Anh Tuan launched the Baller Apes NFT collection and it got traction as many people were investing in it. However, after the collection launch, Tuan disappeared with the money and deleted the project’s website.
In June 2022, he was charged with cryptocurrency fraud in cases with more than $100 million in losses.
12. Frosties NFT Rug Pull
Frosties is one of the top NFT rug pulls in 2022. Its investors were scammed out of $1.3 million. Luckily, 20-year-olds behind the project, Ethan Nguyen and Andre Llacuna, were busted by the FBI.
It was a textbook rug pull – once the Frosties NFTs sold out, the team stole people’s money and went offline, leaving everybody in the dark.
13. Evolved Apes NFT Rug Pull
Evolved Apes NFT collection was a teaser for an upcoming play-to-earn game where people would use these NFT characters to battle and win rewards.
The first Evolved Ape NFT drop sold out in just ten minutes – this goes to show how excited people were about it.
Just one week after the initial drop and before the promise of the game was fulfilled, the developer withdrew 798 ETH and disappeared, deleting his social media accounts. This was another typical NFT rug pull that’s quick and leaves everybody shocked.
14. Orfano Tokens Scam
The goal of Orfano coin was the first charity token, as it was claimed to benefit orphans in poor countries. People fell in love with its charitable mission and invested in it.
Turns out, it was a scam and the project was shut down.
Quickly after that, Hanad Hassan, the person behind Orfano, launched another token – OrfanoX.
You guessed it – it was another scam.
The crazy thing is, Hassan managed to get BBC to promote it with an article and a documentary. Luckily, the documentary called We Are England: Birmingham’s Self-Made Crypto-Millionaire was pulled just hours before it was scheduled to air.
15. OpenSea Discord Hack
In May 2022, somebody hacked OpenSea’s Discord and promoted an NFT scam. OpenSea is the largest and most popular NFT marketplace, which is why this was so concerning.
Essentially, hackers tried to redirect users who clicked on the fake NFT drop’s YouTube link to a phishing site.
Luckily, it didn’t end up being a huge scam compared to others as less than ten users were scammed and less than 10 ETH was stolen.
Final Thoughts on Crypto Scams
As you can see, the crypto ecosystem is riddled with all kinds of scams. Unfortunately, it can happen to anyone. To try to avoid them and safely invest your assets, do your due diligence and make sure that the project is legit.