Top cryptocurrency scams to watch out for
The cryptocurrency market, despite the potential for high returns, has also been plagued by numerous scams. Fraudsters constantly invent new ways to defraud investors. Here are the most significant scams in the crypto world:
FTX: The exchange collapsed in November 2022 after misappropriating billions in customer funds. Founder Sam Bankman-Fried was sentenced to 25 years in prison for fraud.
Luna and TerraUSD: These cryptocurrencies suffered a devastating loss of $60 billion in May 2022, which led to the arrest of founder Do Kwon in March 2023.
QuadrigaCX: After the death of founder Gerald Cotten in 2018, $215 million became untraceable. It was later exposed as a Ponzi scheme.
Africrypt: Investors were scammed out of 70,000 BTC in 2021. Founders Amir and Raees Qazi are now being investigated for money laundering.
SafeMoon: Executives withdrew over $200 million for personal use in 2021, resulting in SEC fraud charges.
Other notable scandals include:
Pro-Dem: It was an exit scam in 2018, investors were left with nothing after the team disappeared.
Pincoin and iFan: Modern Tech raised $660 million in 2018 through an ICO but disappeared, labeling it as another Ponzi scheme.
Celsius Network: This platform halted withdrawals in 2022 and filed for bankruptcy with $4.7 billion owed. They are now working to return assets to customers.
Centra Tech: Raised $25 million in 2017 on false promises, which led to imprisonment for the founders.
Mining Max: Investors were defrauded of $250 million in 2017, only a fraction was used for actual mining, affecting 18,000 investors.
To protect yourself from such scams, always do thorough research, verify the credentials of the team, be wary of promises that seem too good to be true, caution can help you minimize the risk of falling victim to these fraudulent schemes in the cryptocurrency market. Invest wisely and stay informed