The cryptocurrency ‘bubble’ burst at the end of 2018 and only lasted really for 2 years since 2016. In fact it was found that in this time, 98% of ICO’s (Initial Coin Offerings) were either scams of massive failures that resulted in a LOT of lost money. Out of these many offerings we’ve taken a look at some of the worst. Hopefully it may make people think twice before investing in ICO’s in the future, this isn’t to say you shouldn’t do it but just to make sure you do a vast amount of research before you do.
Onecoin
This case has been covered by some heavy hitters like the BBC and is widely considered to be one of the biggest crypto scams of all time, but the astonishing thing is that it is actually still going! It turns out that Onecoin was just a giant ponzi scheme (which is the most frequent scam in cryptocurrency) meaning that the owners were just using other investors money to pay out initial investors and then taking money from it themselves, eventually these schemes always reach a point where there isn’t enough money to go around and they have to stop paying people out at which point a lot of people lose a lot of money. In total $25bn was stolen by its founded and leaders. The leadership group were all arrested but the founded has never been found, he is either on the run, or dead. It turns out that Onecoin never even had a cryptocurrency and the tech was just all a hoax. If you are an investor, then in these situations the best thing to do is contact investment fraud lawyers who may be able to help get some, or all, of your money back.
Bitconntect
This was another of the most brazen scams for different reasons. In total investors lost a total of $4bn but unlike Onecoin, they didn’t just scam people once, they scammed them twice. Once again it was a Ponzi scheme using claims of an unbeatable trading algorithm. Once investors had already put money in, they then launched a second ICO (which was also a scam) called BitconnectX as their original Bitconnect project was failing.
Quadriga
This has recently been made in to a Netflix documentary as it is simply unbelievable. Yet again, it was a Pozi scheme but rather than being in the form of an ICO, it was a crypto exchange instead. The founder was the only person in the entire company who had access to everyone’s private keys, containing around $250m of its users crypto currency. He is then believed to have faked his death in order to get away with the money (which has never been found). Officially he is said to have died following unusual circumstances in India but many believe it is not him and are calling for his body to be exhumed to prove it once and for all. The Netflix documentary concludes that they do believe he died in India but do not know where the $250m actually is.