Four of the Biggest Crypto Scams of All Time
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You probably know that there have been scams in every industry in existence at one point or another. You also likely know that finance has seen its fair share of scams over the years, as well. Sadly, this includes the cryptocurrency industry. There have been some huge cryptocurrency scams over the years and many of these have cost many people quite a bit of money.
If you are interested in cryptocurrency, it is important to know about these scams so you can keep yourself safe. This knowledge will ensure that you can avoid pitfalls that have snared other investors. The research below is based on the De.Fi repository and its database of hacks and scams. Here is what you need to know about four of the biggest crypto scams of all time.
Terra Classic Is the Biggest Crypto Scam of All Time
As previously mentioned, there have been some huge crypto scams over the years. However, Terra Classic is the biggest crypto scam of all time, based on the funds that were lost in the scam. According to the De.Fi repository, a total of $40 billion of funds were lost in the Terra Classic scam.
Several factors led to the downfall of the Terra Classic network. Still, it stands alone in terms of crypto scams, based on the amount of funds lost. Simply put, Terra Classic was a pegged cryptocurrency, meaning its value was linked to the value of a certain bank-issue currency.
In this case, the Terra Classic cryptocurrency was linked to the value of the US dollar and failed to maintain its peg against the US dollar. This led to a currency that was algorithmically tied to the USD peg, Luna, plummeting in value in May 2022. At its peak, Terra Classic was a top-20 blockchain by market cap, so this collapse was a huge blow to the industry.
SEE ALSO: Scam Alert: “I am calling you from Windows”
Silk Road Was Another Big Crypto Scam
Silk Road was a dark web cryptocurrency market that started operating in 2011. It allowed users to anonymously buy and sell illegal products. The Silk Road market only allowed you to pay using Bitcoin. The Silk Road market became a money laundering operation and the FBI shut it down in 2013. Users lost a total of $3.36 billion in funds, according to the De.Fi repository.
PlusToken Cost Users More Than $2 Billion
The PlusToken crypto scam is another well-known scam that cost users quite a bit of funds. Essentially, PlusToken was a pyramid scheme, and it entrapped more than 2.6 million investors. The operators of PlusToken also lied to their investors and said they were earning money by investing in digital currency.
PlusToken promised users low investments and high rewards. The perpetrators received a sentence of a maximum of 11 years in prison. The PlusToken crypto scam cost users $2.9 billion in funds. You can find out more about this scam here.
FTX Was a Recent and Costly Crypto Scam
The FTX crypto scam collapsed in November 2022. The scam involved FTX founder Sam Bankman-Fried stealing billions of dollars in FTX customer deposits and using that money for a variety of purposes. He used that money for illegal political contributions, and charitable donations, and to fund speculative venture investments. Bankman-Fried spent quite a bit of money on celebrity advertisements that aired during the 2022 Super Bowl to make FTX appear more legitimate. A total of $1 billion in customer funds were lost in the FTX scam.
