Here are 5 Biggest Cryptocurrency Scams in History

Top 5 Cryptocurrency Scams that rocked the digital landscape.

UPDATED OCT 26, 2023

A kid stands by a Crypto billboard during the 4th annual NFT.NYC conference on June 20, 2022, in New York City | Getty Images | Photo by Noam G

5 Biggest Cryptocurrency Scams in History

View of a Bitcoin sign announcing the acceptance of the crypto for payments at the San Salvador Historical Center on June 22, 2022 in San Salvador, El Salvador. President of El Salvador called for ease on Twitter for Bitcoin investors as the crypto falled to less than $20,000 declaring that a new high would be archived, the government of El Salvador has invested $105 million dollars in Bitcoin. Getty Images | Photo by Kellys Portillo — View of a Bitcoin sign announcing the acceptance of the crypto for payments at the San Salvador Historical Center on June 22, 2022, in San Salvador, El Salvador | Getty Images | Photo by Kellys Portillo

Cryptocurrency, often touted for its potential to revolutionize finance, has unfortunately harbored some of the most infamous scams in the world of financial fraud. In this article, we delve into the five most colossal crypto scams in history, each leaving a wake of financial ruin. These scams serve as stark reminders that, in the decentralized and largely unregulated world of cryptocurrency, investors must exercise extreme caution and due diligence. The promise of extraordinary returns has lured countless victims into these fraudulent schemes, resulting in losses reaching into the billions. This dark side of crypto underscores the pressing need for greater regulatory oversight and the importance of educating investors about potential pitfalls in this dynamic and high-risk space.

1. Bitconnect (2016-2018)

A Bitcoin ATM is seen at the Clark Street subway station on June 13, 2022 in the Brooklyn Heights neighborhood of Brooklyn in New York City. Bitcoin fell below $24,000 this morning to its lowest level since December 2020. The crypto market lost more than $200 billion since Friday, with the entire market falling below $1 trillion for the first time since February 2021, according to data from CoinMarketCap. Getty Images | Photo by Michael M. Santiago — A Bitcoin ATM is seen at the Clark Street subway station on June 13, 2022, in the Brooklyn Heights neighborhood of Brooklyn in New York City | Getty Images | Photo by Michael M. Santiago

Bitconnect, once a rising star in the cryptocurrency world, turned out to be a massive Ponzi scheme that preyed on the allure of high returns. Operating from 2016 to 2018, the platform promised users daily interest payments in exchange for their Bitcoin investments, along with a referral system that attracted new investors. At its peak, Bitconnect Coin (BCC), its native token, reached over $400 per coin. However, as the curtain was drawn back, the reality emerged—it was a fraudulent operation. In January 2018, Bitconnect abruptly shuttered, causing BCC's value to plummet and resulting in massive financial losses for investors who had poured billions of dollars into the scheme.

2. OneCoin (2014-2017)

A cryptocurrency ATM setup in a convenience store on May 12, 2022 in Miami, Florida. Prices of cryptocurrencies have experienced turbulence recently as many have seen their value drop. Getty Images | Photo by Joe Raedle — A cryptocurrency ATM setup in a convenience store on May 12, 2022, in Miami, Florida. | Getty Images | Photo by Joe Raedle

OneCoin, marketed as a groundbreaking cryptocurrency and championed through aggressive Multi-Level Marketing (MLM) techniques, managed to con countless investors between 2014 and 2017. It promised a rival to Bitcoin, complete with its own blockchain. Yet, the truth was starkly different; OneCoin had no blockchain, and it was, at its core, a centralized Ponzi scheme. Despite being widely discredited within the cryptocurrency community, OneCoin managed to accumulate billions of dollars in investment. In 2017, its founder, Dr. Ruja Ignatova, vanished, and the scheme quickly unraveled, leaving behind a trail of financial devastation.

3. PlusToken (2018-2019)

Person's hand holding an iPhone displaying chart of the price of Solana cryptocurrency, Lafayette, California, May 2, 2022. Getty Images | Photo by Smith Collection — Person hand holding an iPhone displaying a chart of the price of Solana cryptocurrency, Lafayette, California, May 2, 2022. Getty Images | Photo by Smith Collection

In the short span of a year, PlusToken emerged as one of the largest cryptocurrency scams, primarily targeting investors in Asia. Presented as a cryptocurrency wallet and investment platform, PlusToken assured users of high returns on their deposited crypto assets. Millions of users flocked to this scheme, entrusting billions of dollars in cryptocurrencies. However, in mid-2019, the platform's operators suddenly froze withdrawals, eventually leading to the apprehension of key individuals linked to PlusToken. It is estimated that this scam defrauded investors of over $2 billion, illustrating the magnitude of its impact.

4. Mt. Gox (2011-2014)

A Bitcoin logo is seen during the Bitcoin 2022 Conference at Miami Beach Convention Center on April 8, 2022, in Miami, Florida | Getty Images | Photo by Marco Bello

Mt. Gox, formerly the world's leading Bitcoin exchange, responsible for over 70% of all Bitcoin transactions, descended into infamy in February 2014. The exchange halted withdrawals, citing technical problems, but the real story was more alarming. Mt. Gox had suffered a colossal loss of approximately 850,000 Bitcoins, valued at over $450 million at the time, due to a combination of hacking and mismanagement. The exchange filed for bankruptcy, and its CEO, Mark Karpeles, faced legal proceedings in Japan. The Mt. Gox saga serves as a glaring reminder of the inherent risks in the early days of the cryptocurrency industry.

5. Bitpetite (2017)

Mike Novogratz, CEO of Galaxy Investment Partners, gestures as he speaks during the Bitcoin 2022 Conference at Miami Beach Convention Center on April 8, 2022 in Miami, Florida. The worlds largest bitcoin conference runs from April 6-9, expecting over 30,000 people in attendance and over 7 million live stream viewers worldwide. Getty Images | Photo by Marco Bello — Mike Novogratz, CEO of Galaxy Investment Partners, gestures as he speaks during the Bitcoin 2022 Conference at Miami Beach Convention Center on April 8, 2022 in Miami, Florida | Getty Images | Photo by Marco Bello

Bitpetite was a fleeting, high-yield investment program that tantalized investors with the promise of daily returns in exchange for their Bitcoin deposits. Though it operated for just a few months, Bitpetite attracted users with its unsustainable pledge of quick profits. As anticipated, Bitpetite shut down abruptly, and its operators vanished with the accumulated funds. This left many investors empty-handed, emphasizing the danger of blindly trusting investment schemes, especially in the volatile world of cryptocurrencies. Bitpetite's brief existence serves as a poignant example of the "get-rich-quick" allure that can lead to substantial financial losses.