The year 2018 ended. Many of experts are summarizing it as one of the most productive and turbulent periods for crypto world. Hardly anyone could agree with that, but that sounds banal, doesn’t it?
I’ve got something special in my store. I can’t call it a gift for you, but still it will be useful. As title reads, today we’ll review ‘The Hateful Trio’ – the biggest scams that managed to hit thousands of naive investors up for money.
Vietnam-based Modern Tech promoted two ICOs, Pincoin and IFan, that ripped the world off more than any other. Pincoin was a coin that promised a ridiculous 40% monthly return on investment. How can anyone be so naive to buy into such an obvious scam?
32k of investors! Yes, you heard it correctly; this couple defrauded more than 30,000 investors by encouraging them to invest in digital tokens. ICOs managed to steel *don’t read this if you have a heart problem* approximately 15 trillion dong ($650 million).
Following the information about ‘exit scam’, angry investors besieged the company’s office. However, the building’s owners said Modern Tech had liquidated and cleared out of its office a month ago. Unfortunately, scammers are still not tracked down. However, if they are, they will have more than enough under their rug to answer for.
That’s what we call ‘a scam with surprise’. The Founder of OneCoin is actually a Bulgarian businesswoman, Ruja Ignatova. However, although there’s one office in Bulgaria, the company is registered under the jurisdiction of United Arab Emirates’ Government.
The OneCoin scam promoted itself as a cryptocurrency blockchain project. However, it wasn’t’: it deemed itself to be one of the centralized platforms where the crypto funds were stored in a ‘highly secure manner’. Plus, the blockchain project was neither open-source nor decentralized in nature.
OneCoin subordinate companies deeply ingrained in dozens of other countries across the globe. After the community realised that OneCoin was nothing more than a scam, the company faced a huge portion of investigations.
In May 2017, the Government of Kazakhstan levied strict regulations on the company and termed it to be one of the Ponzi schemes. Further, in July 2017, the Government of India arrested 23 people involved with the OneCoin scam. Chinese authorities also joined the process and seized $30 million dollars.
Even the Italian government noticed the Ponzi scheme and Italian Antitrust and Consumer Protection Authority (AGCM), imposed a fine on the company of almost €2.5 million.
Noteworthy, Mark Scott, one of the key scammers in OneCoin, was officially indicted by a grand jury last year in August, and he was arrested by federal officers on September 5th. After the investments were taken in, Mark and his co-conspirators laundered the investor money through several shell companies. Around $400 million of funds stolen from investors were used to purchase a mansion for Scott and his family in Massachusetts.
Bitconnect is probably the most notorious crypto scams in the world which caused the great hype around its HYIP (high-yield investment program).
It was launched in 2016 with the goal of allowing users to lend Bitcoin for interest. Though this goal was never realized, BCC acted as an alt-coin but allowed users to earn interest on their own wallet.
In simple terms, users exchanged Bitcoin for Bitconnect Coin (BCC) on the platform, and were promised astronomical returns on their investments. In addition, the company ran a lending program, where users lent BCC out to other users to make interest.
Interestingly, underpinning by Ponzi schemes, Bitconnect made it to the top of 20 the most successful cryptocurrencies in terms of market cap. Its ‘kingpins’ fraudulently obtained billions of users’ dollars. For the record, only in India the Bitconnect team allegedly siphoned off about $12 billion from investors.
On January 17, 2018, Bitconnect shut down and BCC prices crashed by 92% immediately after. As of September 2018, the token has been delisted from the last exchange that traded it, Trade Satoshi.
It would appear that it’s no hard task to identify whether the project is scam or not. But still, fraudsters appear every day and, unfortunately, they succeed in their malicious intentions. For instance, Westland Storage company, real estate investment project, recently made a sudden and shocking exit. Many laud this exit scam as ‘Bitconnect twin’, because it implemented a similar Ponzi scheme.
Many should have noticed that it was a grift since its launch, because it was offering a 1% daily return of investment during the working days and 0.5% daily returns during the weekends. Ringing any bells? Yes, it reminds us of Bitconnect. Investigations are on the way, and most likely Westland Storage will be one of the biggest crypto scams of 2018.
As of today, police forces are slow in reacting to crypto scams. That’s what we should wish them for the New Year – to act decisively and promptly. And we wish you, our dear followers, to be careful and not to neglect due diligence while involving into risky projects.
Celebrate responsibly and stay tuned!