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Top 10 biggest crypto scams

People have been scamming since the dawn of modern civilization — that’s really nothing new. But in the world of cryptocurrency, a “scam” has acquired a new meaning. Scams often refer to suspicious startups and initial coin offerings (ICOs). When a project seems mostly useless, and the idea behind it a little dubious, you’re most likely dealing with a scam. We’ll be taking a look at the top 10 biggest crypto scams, and how to avoid falling into the scam trap. 

Top 10 biggest crypto scams

  1. Gigi brothers

Israeli brothers, Eli and Assaf Gigi were apprehended for an alleged crypto phishing scam. They’re alleged to have taken more than $100 million in crypto, baiting investors on crypto trading forums, and sending them to phishing sites that mimicked popular cryptocurrency exchanges. 

  1. Kraken hack

Kraken, a Bitcoin exchange, endured a flash crash that caused the currency to fall from $8,400 USD to $75 USD. The price quickly settled, but what emerged was that a hacker compromised the account of a client. The hacker took 1200 BTC, worth more than $9 million USD at the time of writing. Ouch! 

  1. XRP stolen from Github

More than $10 million USD worth of Ripple (XRP) was left unprotected by GitHub clients. Giving cybercriminals had the opportunity to steal XRP from more than 100 ledger wallets. Investigations into how this could have happened are still ongoing, but so far more than 500,000 XRP have been recovered. 

  1. South Korean ponzi scheme

A ponzi scheme targeting investors new to cryptocurrency exchanges was uncovered in South Korea. More than 56,000 people were swindled out of their money, with the majority of investors in their 70s. The unlisted M-token that was used to bait them, was guaranteed to bring in more than 600% ROI. 

  1. Canada ICO fraud

A couple from Canada are fighting claims that they raised more than $30 million through ICO fraud. Their FUEL token would supposedly develop in utility and price – but nothing ever materialized. They then went on to appropriate investors’ assets for personal use, and went on a multi-million dollar gambling bender. 


Your capital is at risk.

  1. Indian ICO fraud

Amit Lakhanpal, the founder of Money Trade Coin (MTC) is alleged to have knowingly run a fake ICO, defrauding investors out of a whopping $71.6 million. Lakhanpal falsely inflated the price of the MTC token to investors, and despite the coin not being listed on any known exchanges, his scam worked! Until it didn’t. 

  1. Binance hack

Possibly the most notorious scam on the list of the top 10 biggest crypto scams, is the Binance hack. Binance, one of the world’s most popular crypto exchanges, had more than $40 million USD worth of Bitcoin stolen in May 2019. This is incredibly unusual for a platform like Binance, and still the hackers took it one step further. Not only did they steal more than 7000 BTC, they also managed to reveal two-factor confirmation codes and API tokens – which could have potentially compromised accounts with incredibly high net-worths. 

  1. Sofia illegal trading

A group of fake binary options and crypto exchanges have been operating in Bulgaria and the Czech Republic, with more than $100 million USD worth of fake trades spreading across the platforms. Traders on Optionstars, XTraderFX, Cryptopoint, SafeMarkets, OptionstarsGlobal, and Goldenmarkets were all enticed by low fees, resulting in them being scammed out of around $115 million USD. 

  1. Taiwan scam

More than 1000 investors have been defrauded out of $51 million in Taiwan. Investors were promised a 335% ROI, but received 0% instead. The Taiwanese government have begun to implement changes to the Money Laundering Control Act, and the Terrorism Financing Prevention Act. 

  1. Mt. Gox hack 

On 19 June 2011, a fraudulent breach of the Mt. Gox cryptocurrency exchange, caused the price of BTC to drop to $0.01. A hacker allegedly used the credentials of a Mt. Gox auditor, to transfer a huge number of Bitcoin to himself. He then used the exchange’s software to sell them all, creating a massive “ask” order at any price. 

Then in February 2014, the exchange suspended withdrawals after supposedly discovering suspicious activity in its digital wallets. The suspension caused Bitcoin’s price to plunge by 20%, while the company discovered that it had lost more than 850,000 Bitcoins. It managed to recover 200,000, but the missing 650,000 caused the market to become destabilized. The ultimate result was that Mt. Gox was forced to declare bankruptcy and liquidate in April 2014. 

How to avoid falling for a scam

So, how do you actually judge a cryptocurrency’s intrinsic value and avoid falling for a scam? 

Fundamental analysis is a way of evaluating an asset (in this case, a cryptocurrency), in order to measure its intrinsic value. By examining all related economic, financial, quantitative and qualitative factors, you should be able to determine whether a coin is trustworthy or not. 

There are three values that should ultimately define the value of a cryptocurrency: 

  • Functionality: Is there are a useful purpose for the coin that you’re examining? If there’s no reason for people to buy it, the price will fall as buyers ultimately lose interest. 
  • Market Potential: A coin may be useful, but how many people actually need it? If the demand for the coin is too low, its price will plummet to zero. There needs to be enough volume to drive demand, or at least keep it stable. 
  • Adoption Strategy: While there might be a solid idea behind a coin, if the strategy behind it is poor, it’ll never enter into an adoption phase. Adoption strategy is what makes the difference between a good coin that’s successful and a good coin that nobody’s heard of.


Your capital is at risk.

Cryptocurrency scams 

Avoiding cryptocurrency scams is simpler than you think. Follow the basic principles of fundamental analysis, and learn from other’s mistakes before you. We can ultimately take a lot away from these top 10 biggest crypto scams, and how to avoid them – now that’s a pretty good thing! 

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Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.

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