Top Crypto Scams To Watch Out For

We rarely hear about someone getting scammed in the cryptosphere. Volatility and lax regulations in the cryptosphere attracts a lot of malicious people looking to con others out of their hard-earned money. The promise of instant overnight wealth also attracts many naive individuals who fall for these scams. This is a perfect environment for hacks, scams and phishing.

According to exclusive Crypto Aware statistics, $1.75 billion in cryptocurrencies were lost due to scams and hacks between 2011-2018. The US Securities and Exchange Commission issued a press release in which it confirmed scamming in the cryptosphere is widespread. They also signaled that they would work to implement regulations that will hopefully stop the scamming. In order to get a better understanding of what might be banned, we’ll take a closer look at some of the biggest scams in crypto.

Mt. Mt.

Mt. Gox, a Japan (Tokyo-based) cryptocurrency exchange was at its peak the most popular of this type of platform. At that time, almost 70% of Bitcoins traded in the market went through that exchange. The name of this exchange was an acronym created from the initial letters in “Magic: The Gathering Online Exchange”. It ran between 2010 and February 2014.


Bitstamp is one of the oldest cryptocurrency exchanges.

Its massive profile made the company both a target for hackers and a “holier than thou” attitude. The first one led to a series of security breaches and hacks which led to thousands of Bitcoins being stolen. The second one led to Mt. Gox got too involved in market making, as they once suspended trading on the platform for several days, to cool the market down. Sadly, these were a sign of things that were soon to come.

Customers began complaining in early 2014 that Mt. Customers began complaining in early 2014 that they had requested withdrawals from Mt. The exchange immediately halted trading and closed all social media and its exchange service. It also filed bankruptcy to protect itself from its creditors. Mark Karpeles revealed to the public that the hackers had been draining the wallets of the company without being caught.

The entire incident had a strong impact on the market. Soon, it was revealed that the wallets of exchanges contained only 6%, or about 850 000 Bitcoins. In 2014, this amounted to 450,000,000 USD. The Bitcoin market fell by 20 percent and it took years to recover. The company recovered 200 thousand Bitcoins but that is still a small fraction of the total amount they lost.

Mt. The funds of Mt. This account, which was owned by a trustee and given court approval to sell the coins, was an example of a flash crash. People fear these accounts will sell their remaining holdings (when BTC prices rise) in the near future. They didn’t mind freezing thousands off of their money, so why should they care if the market crashes and burns? The trustees will also benefit from the drop in the BTC rate, which is a small bonus that helps them pay out less money to their customers.

Mt. confirmed in recent , that Mt. Gox must pay the damages to customers using Bitcoin. Almost all the claims are from Mt. Gox clients. Mt. The Mt.



In 2017, lending platforms were all the rage. Bitconnect, Davor, and other similar projects rose quickly to fame on the strength of intensive marketing campaigns. They promised crazy financial returns, including a 40 percent monthly return with an ROI daily of 1 percent! The faith of the gullible and their money. BCC boasted a market capital of over 2.6 billion dollars at one time, and possessed a coin worth more than 400 USD. It even created its proprietary trading bots and volatility software that could turn a Bitcoin investment into a fortune.

These lending schemes were exposed by sane people as what they truly are. Vitalik Buterin said that if [one percent] per day is the offer then it’s Ponzi (scheme). Ponzi schemes and multi-level marketing pyramid schemes work the same way. Investors are encouraged to make money through bringing new investors. As long as new investors are coming in, these systems will work. The bottom people in the pyramid of the scheme lose their money when the well runs dry.

Cryptopia is a small exchange that is known for being the place less known coins with smaller caps come out first.

And it was clear from the start where this one was going. People like Ryan Hildreth, Trevon James and Craig Grant were used as the top promoters of the system, posting daily videos on Youtube for hundreds of thousands of viewers in which they described how easy it was to earn money with the platform. Of course, they forgot to mention that the money they earned came from the regular influx of investors that would click through the registration links they would post below their videos.

The law soon took note and intervened. After an investigation conducted in November, The British Registrar of Companies issued BitConnect a notice of strike off, threatening the company’s closure and dissolution. Texas Securities Board then served the company with an order to cease and desist, claiming that BCC must comply with its securities guidelines in order to continue operating. After the Texas Securities Board’s notice, another cease-and-desist letter was sent by the North Carolina Securities Division.

After a series of failed attempts to restore their image (including running a news platform, and advertising giveaways that never came through), Bitconnect has announced it is shutting down their lending platform.

We are immediately closing our lending operations with the immediate release of outstanding loans. We will transfer your BitConnect balance of 363.62USD to the lending wallet after you release your active loans. We are shutting down the lending and exchange services while will continue to operate as a wallet, news, and education website .”

BCC tokens immediately went downhill, dropping from just over 360 USD to only 6 USD within a day. BCC token holders began to post on social media about their losses, some even investing all they could afford. Bitconnect, the largest crypto Ponzi Scheme, spawned a number of imitations, including OneCoin and Davor. The BCC fiasco is not only one of the most memorable memes in the history of the internet, but also a warning to investors that the crypto space can be volatile and dangerous.


The project was an example of aggressive marketing hyped up for a nonexistent product. Centratech, endorsed by Floyd Mayweather, DJ Khaled and others, claimed to be the first platform to allow people directly convert cryptocurrency into fiat using Visa or MasterCard debit cards. This all sounded so promising that Centratech collected over 32 million dollars during its ICO.

The smokescreen was quickly lifted, and all the dirty details of the project became apparent. The founders of the company, Sohrab Sharma & Robert Farkas, created fake profiles for themselves with impressive bios. They also posted false marketing materials on their social media and website. The company also paid celebrities who had been mentioned to promote their products. It is common practice, as celebrities don’t really care about the product they endorse as long as it pays them.


Poloniex is another large crypto exchange.

As a result, the SEC will be looking to seek permanent injunctions with an added intent to force Sharma and Farkas into returning the stolen funds with interest. The pair will also be barred from serving as company officers or directors, and be banned from participating in any securities offerings. As a general rule of thumb, projects that invest most of their money into viral marketing and celebrity promotion before even having any semblance of a working product, are probably just looking for a quick cash-in.

It is impossible to include all the cryptocurrency scams, failed projects and failed blockchains in a single post. This graphic will show you the most notable scams in this area.

Scams are still prevalent, even with promises of greater regulation. They will likely continue for some time to come. Always be vigilant and make sure to do thorough research prior to investing in any crypto project.

We will be happy to hear your thoughts

Leave a reply