Notorious Crypto Scams & Their Masterminds
The Dark Side of Crypto: Notorious Scams and Their Masterminds
The cryptocurrency industry, while promising immense wealth, has also attracted individuals driven by greed. This has resulted in numerous elaborate scams, defrauding investors of billions. Let's examine some of the most infamous cases.
Ruja Ignatova: The 'Cryptoqueen'
Ruja Ignatova, known as the "Cryptoqueen," orchestrated the OneCoin scam, one of history's largest cryptocurrency frauds. After a successful career in finance, she co-founded OneCoin with Karl Sebastian Greenwood, promising high returns through a multi-level marketing (MLM) scheme. OneCoin falsely claimed to be a Bitcoin competitor, but was ultimately revealed as a Ponzi scheme with no verifiable blockchain. It defrauded investors of over $4 billion globally. Ignatova vanished in 2017 and remains a fugitive, featured on the FBI's Ten Most Wanted list.
Greenwood pleaded guilty to fraud charges in 2022, while OneCoin's former legal chief, Irina Dilkinska, received a four-year prison sentence in 2024.
Faruk Fatih Özer: The Thodex Collapse
Faruk Fatih Özer founded Thodex, a Turkish cryptocurrency exchange. In April 2021, Thodex abruptly shut down, leaving over 400,000 users unable to access their accounts, locking up approximately $2 billion in cryptocurrency. Özer fled to Albania, but was eventually apprehended, extradited to Turkey, and sentenced to a lengthy prison term in 2023. While parts of the original sentencing were later overturned, Özer remains incarcerated.
Satish Kumbhani: The BitConnect Ponzi Scheme
Satish Kumbhani, founder of BitConnect, created a global Ponzi scheme that defrauded investors of $2.4 billion between 2016 and 2018. BitConnect promoted a “Lending Program” and trading bots promising high profits, but operated by paying early investors with funds from new ones. Kumbhani was indicted in 2022 and faces up to 70 years in prison if convicted. Glenn Arcaro, the head of BitConnect's North American division, pleaded guilty and was sentenced to 38 months in prison and ordered to repay $17.6 million in restitution.
Protecting Yourself from Crypto Scams
These cases highlight the crucial need for caution in the cryptocurrency space. At Codeum, we provide comprehensive blockchain security services, including smart contract audits, KYC verification, and custom smart contract & DApp development, to help protect your projects and investments. We also offer tokenomics and security consultation, and collaborate with launchpads and crypto agencies to foster a safer and more transparent ecosystem. Thorough due diligence, understanding of investment risks, and utilizing reputable security providers are essential to navigating the crypto world safely.