The biggest crypto scams have shocked the world, costing investors millions and exposing the darker side of cryptocurrency. From fake investments to hacked exchanges, these famous crypto scams reveal the risks in the crypto. 

Read on to explore the most infamous crypto frauds and the lessons they offer.

The Biggest Crypto Scams in History

Now, we’ll explore the biggest crypto scams in history, uncover the scammers behind them, the harm they caused, and whether justice was ever served.

Mt. Gox

• Lost Amount. €450 million
• Perpetrators. Mark Karpeles
• Outcome. Mark Karpeles was convicted of mismanagement but avoided jail time. Investors have not recovered their lost Bitcoins.

Mt. Gox was once the world’s largest Bitcoin exchange, handling 70% of all Bitcoin transactions globally. In 2014, the platform suspended withdrawals, citing technical issues.

It was later revealed that Mt. Gox had been hacked, resulting in the loss of 850,000 Bitcoins, valued at over €450 million at the time. This incident is considered one of the biggest scam in crypto history.

CEO Mark Karpeles faced charges of mismanagement and falsifying records, leading to a conviction. However, he avoided prison. To this day, the stolen Bitcoins have not been recovered, and the collapse of Mt. Gox remains a big failure in cryptocurrency history.

Bitconnect

• Lost Amount. €1.5 billion
• Criminals. Satish Kumbhani
• Outcome. Satish Kumbhani faced charges, but many others involved have not been prosecuted.

Bitconnect was a high-yield investment platform that promised incredible returns using a “unique trading algorithm.” Investors exchanged Bitcoin for Bitconnect Coins (BCC) and were drawn in by promises of high profits. 

However, big crypto scams turned out to be a Ponzi scheme, using funds from new investors to pay earlier ones.

The cryptocurrency scams collapsed in 2018 when BCC’s value dropped to zero, causing massive losses for investors. While Satish Kumbhani, the founder, is facing legal action, others connected to the scheme have yet to face consequences.

BitPetite

• Lost Amount. €10 million
• Scammers. Unknown
• Outcome. The founders disappeared, and the case is still unresolved.

BitPetite was an exchange platform that promised high returns on Bitcoin investments. Similar to Bitconnect, it attracted users with the lure of daily profits. 

However, after several months of operation, BitPetite abruptly vanished, leaving investors with losses totaling millions of euros. This is considered one of the worst crypto scams in recent history.

The founders erased all traces of their online presence, making it nearly impossible for authorities to trace them. While lawsuits are ongoing, the perpetrators have not been identified, and the case remains open.

OneCoin

• Lost Amount. €4.4 billion
• Scammers. Dr. Ruja Ignatova, her husband, and others
• Outcome. Dr. Ruja Ignatova disappeared in 2017 and is still missing. Some of her partners have been taken to court, and investigations are ongoing.

OneCoin is one of the biggest crypto scamers in digital money history, with victims losing €4.4 billion. Dr. Ruja Ignatova, known as the “Crypto Queen,” claimed OneCoin was a new type of digital currency using blockchain technology. She attracted people by selling educational packages that promised big profits.

In truth, OneCoin was a Ponzi scheme without an actual blockchain. When it collapsed, many people lost their money. Dr. Ignatova vanished in 2017, leaving many questions unanswered. 

In September 2023, reports said she was sentenced to 20 years in prison, even though she is still on the run. OneCoin shows the dangers of trusting fake digital money schemes.

Thodex

• Lost Amount. €2.2 billion
• Perpetrators. Faruk Fatih Özer
• Outcome. Faruk Fatih Özer fled the country and has not been caught.

Thodex, a Turkish cryptocurrency exchange, promised high returns to attract thousands of investors. In April 2021, it unexpectedly shut down, claiming it was for maintenance. Soon after, it was revealed to be a scheme to steal investors’ funds. Founder Faruk Fatih Özer disappeared, taking €2.2 billion with him.

Despite ongoing efforts to locate him, Özer has not been found, leaving over 100,000 investors with heavy financial losses. The Thodex case is one of the largest frauds in cryptocurrency history and highlights the dangers of unregulated platforms.

Types of Crypto Scams

Below, we explore crypto scams in several forms:

Scams that trick victims into transferring funds

These cryptocurrencies scams manipulate individuals into sending crypto to fraudulent accounts, often creating a false sense of trust or urgency.

Romance scams

Scammers pose as romantic partners online, building trust over time. They often ask for money for emergencies, travel, or fake investments. This leaves victims in a state of emotional and financial devastation.

Fraudulent investment opportunities

These scams promise guaranteed high returns with little risk. Victims are pressured to invest in fake cryptocurrencies, hoping for big profits.

Ponzi schemes

These scams use money from new investors to pay returns to earlier ones, creating the illusion of a profitable investment. The scheme collapses once new investments slow down, and the organizers disappear with the rest of the funds.

Deceptive Crypto Scams

Now, we’ll talk about a few examples of scams that aim to steal wallet access or passwords.

Phishing

Crypto scammers pretend to be trustworthy organizations, such as cryptocurrency exchanges or wallet providers. They create fake websites or send legitimate emails, convincing victims to share sensitive details like login credentials or private keys. Once they have this information, they use it to access and steal funds.

Address poisoning

Fraudsters manipulate transaction data to redirect funds to their wallets. They change the wallet address in a victim’s clipboard. This leads the victim to send cryptocurrency to the scammer instead of the intended recipient.

Tips to Stay Safe from Crypto Scammers

To protect yourself from falling victim to a crypto scam, keep these tips in mind:

• Always verify the credibility of a crypto project before investing. Check reviews, investor feedback, and whether the project is regulated or audited.
• Opt for reliable wallets from reputable providers. For added security, consider using offline cold wallets.
• Keep up with the latest crypto news to learn about emerging scams and threats. Awareness is key to prevention.
• Never share your passwords, private keys, or seed phrases with anyone, whether online or offline.
• Use exchanges and trading platforms with a strong reputation for transparency and security. Choose those with clear safety measures and a proven track record.

Biggest Crypto Scams Bottom Line

Some of the biggest crypto scams in history have highlighted severe risks for investors, leading to billions in losses. Scams like OneCoin, Bitconnect, and the Mt. Gox hack have shown the dangers in the crypto market. 

While some perpetrators have been charged, many victims still have not recovered their funds. As cryptocurrency grows, investors must stay alert. They should use trusted platforms and follow security best practices to avoid scams.

FAQs About Crypto Scams

What is a crypto scam?

A cryptocurrencies scam is a fraud. Scammers deceive people into investing in fake cryptocurrencies or projects, often promising high returns. Then, they steal the victims’ money.

How can I spot a crypto scam?

Look out for offers of guaranteed returns, pressure to invest quickly, and lack of transparency. Always research the platform and verify its legitimacy before investing.

What should I do if I fall victim to a crypto scam?

Report the scam to authorities, contact your crypto exchange or wallet provider, and try to recover any stolen funds if possible. Keep track of all communications and transactions for evidence.

What are the biggest crypto scammers?

Some of the biggest crypto scammers include Sam Bankman-Fried (FTX), Ruja Ignatova (OneCoin), PlusToken, and the Mt. Gox exchange, all of whom defrauded investors of billions of dollars.

What are the most common types of crypto scams?

The most common crypto scammers include phishing, Ponzi schemes, fake ICOs, romance scams, and pump-and-dump. 

How can I protect myself from crypto scams?

Do thorough research, use trusted exchanges, enable two-factor authentication (2FA), and never share sensitive information like your private keys or passwords with anyone.