As of today, the crypto world is reported to be worth around $800 billion with more than 300 million users that own cryptocurrency worldwide.
While investors, both retail and institutions, have found in crypto an alternative to stocks and other kinds of investment, hackers have found fertile soil for illegal and unethical activities on top of blockchains.
According to a very detailed report of worldwide crypto and NFT rug pulls and scams made by Comparitech, more than $25 billion has been lost in cryptocurrency malicious projects.
And with more than 450 malicious events, stepping into the blockchain nowadays may be dangerous for both novices and expert investors.
What are rug pulls?
In the cryptocurrency industry, the term rug pull means a full-fledged scam, where a developer creates a project to collect money and then abandons it and runs away with investor funds, leaving them with a worthless cryptocurrency.
Read what is a rug pull on our blog to have more information.
Was Terra Luna a Rug Pull?
The disastrous event of Terra Luna leads many investors to accuse the project of being a rug pull. It was more a misjudgement from the developers on what happened on Terra Luna and the de-peg of its dollar stablecoin, the UST.
Was FTX a rug pull?
The FTX case may look like a rug pull on the charts, due to the crash of the company value and the FTX token FTT, but it is just a consequence of multiple events.
Top 10 rug pulls of all time
Here is a list of the top 10 crypto Rug pulls of all time to date:
Project Name | Amount Stolen | RugPull/Scam/Ponzi |
|---|---|---|
OneCoin | $4000000000 | Ponzi scheme |
Africrypt | $3600000000 | Scam |
Gainbitcoin | $3000000000 | Scam |
Bitconnect | $2400000000 | Ponzi scheme |
Plus Token | $2250000000 | Ponzi scheme |
Thodex | $2000000000 | Scam |
WoToken | $1100000000 | Ponzi scheme |
Arbistar | $1000000000 | Scam |
BitClub Network | $722000000 | Scam |
Modern Tech | $658000000 | Scam |
1 - OneCoin | $4 billion
As a proper Ponzi scheme, it promised high returns rates with minor risks. To date, OneCoin is the most successful crypto scam that ever happened. In June 2022 the FBI added the mind behind the project, Ruja Ignatova, to the “Ten most wanted fugitive list”
2 - Africrypt | $3.6 billion
On April 13th 2021 all operations on the platform alted due to a major security breach.
A total value of $3.6 billion equivalent in BTC disappeared from the platform. The employees of the company were unable to access the back end of the platform, and the two south African entrepreneurs fled away from the country a month later.
3 - Gainbitcoin | $3 billion
On April 4th 2018 the famous entrepreneur Amit Bhardwaj and his brother Vivek Bhardwaj were arrested, and accused of scamming about 8,000 investors out of 385K/600K BTC. Amit Bhardwaj died in January 2022, while the case against his brother is still ongoing.
4 - Bitconnect | $2.4 billion
Another famous Ponzi scheme, thanks also to the famous Bitconnect speech rocked by Carlos Matos, which made him the meme face for every Rug pull and scam that came after it. The founder, Satish Kumbhani, was indicted in February 2022.
5 - PlusToken | $2.25 billion
On June 2019, as investors struggled to withdraw their earnings from the platform, the organizers withdrew the whole pot in BTC and other tokens, leaving them with a funny message “We have run”. More than 100 people were arrested in connection with the fraud.
6 - Thodex | $2 billion
The Turkish exchange alted its services on April 20th 2021, with almost 400,000 users. The founder Faruk Fatih Özer fled to Tirana, Albania, with the equivalent of $2 billion in crypto, he was then arrested in August 2022. He is now facing up to 40,564 years for his crimes.
7 - WoToken | $1.1 Billion
715,000 people fell victim of the scheme. The stolen tokens, 46K BTC, 286K USDT, 2M ETH, 292,590 LTC, 56,900 BCH and 6,841,797 EOS, would be now worth around $4 billion.
8 - Arbistar | $1 billion
The CEO Santiago Fuentes was arrested in October 2022, leaving 120,000 users empty pockets.
9 - BitClub Network | $722 million
A fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme.
10 - Modern Tech | $658 million
Two separate ICO, named iFan and Pincoin, backed by around 32,000 people, promising constant returns to investors.
Another relevant malicious project - Squid Game coin
While Squid Game was one of the most popular Netflix shows, Squid game coin was one of the most popular rug pull in 2021. And sadly for the investors, the scam was entirely like the final round of the TV show, where the last man standing can pack up the final big pot - $3.5 Million.
Conclusion
Malicious projects and people are always around the corner in the blockchain industry. The best way to approach every project is to be sceptical about every aspect of it, and as an investor to diversify your assets.
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