The world of cryptocurrency, while offering great potential for profits, is also a breeding ground for scams. Fraudsters are continuously coming up with new ways to deceive investors. Below are some of the most infamous crypto scams that have caused significant market damage:
FTX: In November 2022, FTX collapsed after mismanaging billions of dollars in customer funds. The company's founder, Sam Bankman-Fried, is now serving a 27-year prison sentence for fraud.
Luna and TerraUSD: These two cryptocurrencies suffered a dramatic crash in May 2022, wiping out $58 billion in value. Founder Do Kwon was arrested in March 2023 for his involvement in the collapse.
QuadrigaCX: After the sudden death of founder Gerald Cotten in 2018, about $200 million of customer funds became inaccessible. It was later revealed to be a Ponzi scheme.
Africrypt: Investors lost 65,000 BTC in 2021 when the platform collapsed. Its founders, Ameer and Raees Cajee, are under investigation for money laundering.
Other major cases include SafeMoon, Prodeumâan exit scam in 2018 that left investors with nothing after the team disappeared, and Pincoin & iFanâwhere Modern Tech raised $640 million through ICOs in 2018 before vanishing in another Ponzi scheme.
Celsius Network: This platform stopped withdrawals in 2022 and filed for bankruptcy, leaving a $4.5 billion liability. The company is now trying to return some assets to customers.
Centra Tech: After raising $22 million in 2017, the founders were jailed for misleading investors. Mining Max defrauded 17,000 investors, raising $230 million but using only a small portion for actual mining.
To protect yourself from such scams, always research the team behind any project. Be wary of schemes offering unrealistically high returns. Conducting thorough research and remaining cautious are key to avoiding these traps.
