The allure of cryptocurrencies has, time and again, drawn unsuspecting investors into the clutches of scams, leaving their dreams of financial prosperity shattered.
The latest victims, two Portuguese citizens who lost a staggering $312,000 to crypto fraudsters, serve as a painful reminder of the perils lurking in the digital asset realm.
This incident underscores a growing concern as authorities witness an alarming rise in crypto scams across the globe. Would you like to know about the 5 biggest crypto scams ever? Read on!
Unveiling the 5 Biggest Crypto Scams in History
Before we delve into the harrowing tale of the Portuguese investors, let’s journey through the annals of crypto scams to unveil the five most notorious ones in history.
1. OneCoin – $25 Billion Scam
OneCoin, masterminded by Ruja Ignatova, enticed investors with the promise of extraordinary returns backed by gold. However, this cryptocurrency turned out to be fictitious, leaving investors with losses estimated at a staggering $25 billion. Ignatova was arrested in 2017, but the scars of OneCoin still linger.
2. BitConnect – $4 Billion Ponzi Scheme
BitConnect lured investors with sky-high returns, operating on the infamous Ponzi scheme model. When the scheme inevitably crumbled, investors faced losses amounting to an estimated $4 billion.
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3. Bitclub Network – $722 Million Mining Scam
Bitclub Network marketed itself as a guaranteed-profit Bitcoin mining venture, but it had no real mining equipment. Instead, profits were funded by new investors. The scheme’s collapse left investors counting losses worth approximately $722 million.
4. QuadrigaCX – $190 Million Hack
QuadrigaCX, a Canadian cryptocurrency exchange, fell victim to a devastating hack in 2019, resulting in the theft of around $190 million worth of cryptocurrency. The exchange’s founder, Gerald Cotten, was later found dead under mysterious circumstances.
5. TerraUSD and Luna – $40 Billion Peg Collapse
TerraUSD and Luna, designed to be pegged to the US dollar, suffered a catastrophic peg break in May 2022. This collapse led to an estimated $40 billion in losses for investors.
These were the 5 biggest crypto scams ever but are just a glimpse into the dark underbelly of the crypto world.
Portuguese Investors Fall Victim to Crypto Scam
Returning to the present, the heart-wrenching story of two Portuguese citizens from Cantanhede, in Portugal’s Coimbra District, unfolds. Entrapped by the promise of “quick profits” through coin staking, they found themselves ensnared in a deceptive web.
One of the victims sent $213,000 worth of Bitcoin to a wallet they believed belonged to a legitimate crypto firm. Promised substantial returns, this individual anticipated turning their BTC investment into over $800,000.
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Meanwhile, the other investor entrusted a cumulative sum of approximately $94,000 to the same entity over the course of a month. However, their dreams of financial gain soon crumbled.
The situation took a dark turn when both investors were informed of a 3% withdrawal fee, forcing them to reconsider their decisions. Subsequently, they were hit with the devastating news that their assets had been “frozen” and could only be retrieved by paying substantial “unlocking fees.”
Realization dawned on the victims, who understood they had fallen prey to an elaborate scam. Swiftly, they reported the incident to the authorities, initiating an investigation into this heartbreaking deception.
The Surge in Crypto Crimes Grips Portugal
Portuguese law enforcement has been grappling with a surge in crypto-related scams, signaling a worrying trend in a nation once known as a haven for crypto investors due to its lack of tax on crypto trading profits.
The Cybercrime Office in Portugal reported a stark increase in cryptocurrency scams, more than doubling over the past two years. This year alone, they received 94 reports of crypto-related scams, a stark rise from the 38 reported in 2021. Victims lamented the loss of substantial sums of money across multiple platforms.
In a concerning development, most platforms used by scammers were swiftly taken offline, leaving investigators with scant details or contact information to trace their origins.
Earlier this year, Portuguese prosecutors noted a surge in cybercrime, including undisclosed crypto scams. In response, the government announced plans to impose a 28% tax on crypto-related capital gains in 2022.
The Final Word
As the crypto world continues to evolve, these cases serve as stark reminders that caution and due diligence are imperative for anyone considering investing in digital assets. The allure of quick profits should always be met with skepticism, and investors should remain vigilant to avoid falling victim to the ever-present threat of crypto scams.