Cryptocurrencies are popular now, bitcoin has never been so high. However, before investing, it’s best to be careful and make sure you don’t run into scams.
There have already been big scandals in the past.
Here is a retrospective of the worst known scammers in the cryptocurrency world.
Hacking the Mt. Gox
Perhaps the most famous story is that of the Mt. Gox. In 2010, this Tokyo-based French-run platform was the most popular platform for buying bitcoin. Almost everyone uses this platform to purchase cryptocurrency. About 70% of the available bitcoins have passed through this platform. The problem is that the platform was completely insecure.
After the attacks of many hackers, many bitcoins were stolen, and platform users could not even recover them. Over 850,000 bitcoins have been lost and have yet to be found …
The stars cheat too
In 2017, the Centra Tech cryptocurrency project was launched with a lot of stars. The project was promoted by US boxing champion Floyd Mayweather and singer / DJ / music producer DJ Khaled. The company managed to raise nearly $ 30 million through ICO (IPO, but cryptocurrency version).
Only the US regulators, the FBI and the SEC (a stock market police officer) have begun investigative actions, and now the company’s leaders face a 5-year prison sentence. Pinnacle of history: The two requested stars had to pay a nearly $ 800,000 fine to the SEC and were barred from participating in new ICOs.
Bitconnect Ponzi Scheme
Another very famous scam in the cryptocurrency world is Bitconnect. After launching in 2017, the platform promised amazing bang for its users.
Promising an incredible return on investment, many people have allowed themselves to be drawn into the so-called Ponzi scheme.
A fraudulent referral system that encourages people to sign up for new members so they can get the benefits themselves. Many YouTube users in the cryptocurrency space have participated in this massive scam.
Fortunately, an American stock exchange police officer asked Bitconnect to stop all its efforts to detect the Ponzi scheme. More than $ 700,000 was lost in this story.
Scam from the dead
Quadriga was arguably the largest cryptocurrency buying platform in Canada. Except that in early 2019, the company went into bankruptcy after the death of its boss Gerald Cotten at the age of 30. After that, the boss’s widow said that only her husband was able to free up funds, since he was the only one who knew the company’s passwords. The problem is that the head of the company has re-assembled the Ponzi scheme, and Canadian authorities estimate that of the $ 169 million in losses incurred by the platform’s clients, roughly 70% were due to the fraudulent trade of the late Quadriga boss.
Thus, almost 80,000 clients of the company were faced with a real scam and could not get their share back.
Incredible OneCoin Launch
There, too, the story deserves an adaptation in Hollywood, so the strings are big.
The management team, based mostly in India, had the idea to convince many people that they had invented a new cryptocurrency, more affordable and better than Bitcoin: OneCoin. The marketing plan was well crafted with input from so-called economics professors, stories from billionaires and seasoned investors.
And also great American shows with fireworks and loud music. Anything to impress potential investors.
The only thing was a blast, another Ponzi scheme that promised miracles to investors looking for a quick return on their investment. However, negative reviews and warnings have been issued by tax authorities in many European countries.
Currently, between 2014 and 2016, the system would have generated profits of over 2.2 billion euros. Leaders arrested since then face up to 20 years in prison.
Before making any investment in cryptocurrency, we can only advise you to do your own research and not trust companies that are not certified. This will prevent you from getting caught up in major scams like the ones we’ve presented to you.
More and more French platforms such as Zebitex, for example, are offering their services for buy bitcoins… Likewise, Stackinsat offers solutions for save in bitcoins in an easy, simple and safe way. You should be aware that all of these companies are AMF (Financial Market Authority) certified and have a real legal status. Perhaps now is the right time to start investing in the sector of the future, which is cryptocurrency and bitcoin.