As cryptocurrency has risen in popularity over the past decade, it has drawn the attention not just of countless investors looking for the next big thing, but also a variety of fraudsters, thieves, and unscrupulous operators. From high-yield investment Ponzi schemes to hacking incidents at cryptocurrency exchanges, the landscape has been marked by a range of scams and failures. This article provides an overview of some of the most notable instances.
Contents
List of Crypto Scams and Crypto Bankruptcies
Accuracy of Information: While every effort has been made to ensure the accuracy of the information presented in this article, it is based on publicly available information and the actual circumstances may differ.
| Name | Description | Year of death | Estimated Loss at the time (USD) |
|---|---|---|---|
| Mt. Gox | Lost 850,000 bitcoins due to a hack. | 2014 | $460M |
| BitConnect | High-yield cryptocurrency Ponzi scheme. | 2018 | $1B+ |
| OneCoin | Cryptocurrency scam promoted as an investment opportunity. | 2017 | $4.4B |
| Centra Tech | Misleading ICO backed by celebrities. | 2017 | $25M |
| DAO Hack | Hack of the DAO platform due to software vulnerability. | 2016 | $60M |
| PlexCoin | Scam ICO shut down by the SEC. | 2017 | $15M |
| Pincoin | Scam ICO | 2018 | $660M |
| AriseBank | Scam ICO | 2018 | $600M |
| QuadrigaCX | Founder died suddenly, leaving $190 million inaccessible. | 2018 | $190M |
| Cryptsy | Collapse due to insolvency and alleged theft by CEO. | 2016 | Unknown |
| PlusToken | Ponzi scheme that took in over $2 billion. | 2019 | $2B+ |
| Bancor | Hack in 2018 resulted in a loss of $13.5 million. | 2018 | $13.5M |
| Coincheck | One of the largest cryptocurrency exchange hacks with over $500 million stolen. | 2018 | $500M+ |
| Zaif | Hack in 2018 resulted in a loss of $60 million. | 2018 | $60M |
| Nano (Bitgrail) | Loss of 17 million Nano due to a suspected vulnerability. | 2018 | $170M |
| Parity wallet | Exploited vulnerability led to the loss and freeze of millions in Ether. | 2017 | $30M lost, $152M frozen |
| Bithumb | Hacked multiple times with the biggest in 2018, losing $30 million. | 2018 | $30M |
| Coinrail | Hacked in June 2018, losing about $40 million. | 2018 | $40M |
| MapleChange | Claimed a software bug led to the improper withdrawal of all funds. | 2018 | $6M |
| BitPetite | Exit scam, taking investor money and disappearing. | 2017 | Unknown |
| Control-Finance | Vanishing after appropriating funds from investors. | 2017 | Unknown |
| Prodeum | Exit scam, taking investor money and disappearing. | 2018 | Unknown |
| Bitcoin Savings & Trust | Early cryptocurrency Ponzi scheme, operator disappeared with investors’ bitcoins. | 2012 | $1.8M |
| FTX | Bankruptcy triggered by a liquidity crisis of its token, FTT, which ultimately led to the exchange’s downfall. | 2022 | $8B+ |
As the list illustrates, the world of cryptocurrency is not without its risks. Despite the appeal of high potential returns, these cases highlight the importance of thorough due diligence before investing in any cryptocurrency project. The decentralised nature of these technologies can sometimes make it hard for authorities to intervene effectively and recover lost funds. As the technology evolves, so too do the schemes to defraud unsuspecting investors. Awareness, research, and caution are crucial for anyone considering stepping into the cryptocurrency arena.
Author’s notes
Volatility of Cryptocurrency: the values given for losses are approximations based on the value of the cryptocurrencies at the time of the event or the time the loss was discovered. Cryptocurrencies are highly volatile and their value can change rapidly.
Not Investment Advice: this article is for informational purposes only and should not be taken as investment advice. Cryptocurrency investments carry substantial risk and potential investors should consult with a financial advisor and conduct their own research and due diligence.
Regulation and Compliance: cryptocurrency regulations vary greatly by jurisdiction. It is the responsibility of the individual to comply with local laws and regulations regarding cryptocurrencies.
Preventive Measures: security is a major concern with cryptocurrencies. The examples above highlight some potential risks, but users should employ all available security measures, including secure wallets, two-factor authentication, and other best practices.
Risk of Loss: it’s important to remember that when investing in cryptocurrencies, your capital is at risk. It’s possible to lose some or all of your investment, so never invest money you can’t afford to lose.
