People have lost a lot of money to crypto scams. There are many ways that people can be scammed in the crypto world, and it’s important to know how they happen so you can avoid being taken advantage of. This article will go over some of the biggest crypto scams, what they are, and how much money was stolen from victims.
The top crypto scams in history
One of the biggest crypto scams in history was “Bitconnect.” It lured victims into investing in the Bitconnect loan program, which promised a return of 40% per month. Bitconnect worked with a multilevel marketing structure and turned out to be a Ponzi scheme. When it shut down, its price crashed to $0.40 after an all-time high of $463. The total loss for investors tallied up to over $3 billion. Bitconnect shut down in January of 2018.
Another of the top crypto scams is called Onecoin. Onecoin promised low-cost banking and education services, and investors were lured in by the opportunity to invest in it. However, Onecoin turned out to be a pyramid scheme. Investors were buying plagiarized educational materials and could not exchange all of their coins because of daily sell limits. The exchange shut down in 2017 and Onecoin’s offices were raided and assets seized in 2018. Victims of this scam lost more than $4 billion.
The last top crypto scam on this list is called Pincoin. Pincoin was a cryptocurrency created by an unknown person or group. The company claimed to be backed by gold, and it promised a return of investment of no less than 150% per month for three months. The scammers, a group of unknown Vietnamese individuals, pocketed $660M in the coin’s ICO. They made off with that money, and Vietnamese authorities are trying to get a hold of them to this day.
How to protect yourself from the biggest crypto scams
The top crypto scams all follow a similar playbook:
- Promising unrealistic returns
All of the biggest crypto scams in this article promised investors outsized returns. Any time a coin promises you guaranteed returns, it is time to run for the hills because it is likely a scam.
- Having an over-ambitious roadmap
If a coin attempts to do many things at once, chances are it will succeed at neither and probably not even try to. Legitimate projects try to solve one problem at a time.
- The team is anonymous
An anonymous team does not automatically mean a coin is a scam. Bitcoin has an anonymous founder, and there are other projects like Sushiswap with anonymous founders. However, if the founders are anonymous, you should be extra careful.
- The company uses a lot of jargon
If a company uses excessive jargon, it is probably trying to hide that it has nothing worthwhile to say. Beware of projects that use a lot of big and complicated words.
- Their material is rife with typos.
This one is easy to spot since every project worth their salt will get their material proofread and checked two or three times. A typo doesn’t make a project a scam, but a scam coin probably has typos.
Conclusion
Whether it is something as simple as typos or something more complex like multilevel marketing structures, these top crypto scams should make you wary of any opportunity that promises an easy profit with little risk. If anything seems fishy, don’t invest!