Various Scams Aided by Cryptocurrencies

Everyone would have definitely read news reports in the last few months about people who had heavily invested in cryptocurrencies and ended up with large payouts. Cryptocurrencies have changed the way the world looks at transactions. However, it has also facilitated the formulation of some huge scams since its inception. While there has been a lot of innovation brought by companies using blockchain and cryptocurrencies, there has also been a multitude of individuals seeking to make a quick buck out of it by cheating people.
Scams in Cryptocurrency
The number of scams related to cryptocurrencies has increased exponentially since its inception and will only continue to do so with its rapid growth. A lot of people tend to blindly jump into opportunities like this after seeing other people earn their payouts. A vast majority of these people wouldn’t have done their research properly, and this makes this field a breeding ground for ill-intentioned people to try and take advantage of eager investors’ naivety.FinTech Banner
Here are a few instances in which such nefarious individuals sought to dupe innocent consumers of their hard-earned money:

Pincoin, iFan

This was the most recent multi-level scam which grabbed headlines last April. Two separate ICOs within of Vietnam had cheated about $660 million from 32,000 of their investors. Both of these ICOs were being run by the same company, Modern Tech. They had vacated their offices and made off with their investors' money. This is considered to be the largest scam in the history of ICOs. A protest was held by several of the investors outside the empty offices, and the police have started an investigation into the claims of fraud. These ICOs are a prime example of multi-level scams using marketing.


This company has been investigated a large number of times in the last two years. The Italian government fined this company a whopping 2.5 million euros. It was officially classified in India as a Ponzi scheme in July 2017. Its offices in Bulgaria were also raided on January 2018, and their servers were seized. 30 million dollars were confiscated from their offices by the Chinese government in 2016. The company had also claimed to have been registered in Vietnam, but the Vietnamese government later clarified otherwise. Several countries including Norway, Thailand, Finland, Bulgaria, and Croatia had issued warnings to investors against investing in the company.


This Company made its users' exchange Bitcoin for Bitconnect coin (BGC) on their platform and promised them exponential returns from their investments. They eventually had to shut down in January 2018 after they were served with a cease and desist order from a couple of American financial regulators. The company also offered a lending program which allowed users to lend BCC out to other users and earn interest from them. They also had a typical Ponzi scheme-like referral system. A multitude of users has since filed a class action lawsuit against Bitconnect to recover their funds, amounting to 700,000 dollars for this particular claim.


This was also a typical Ponzi scheme-like scam which was shut down in December 2017. They promised their investors of over a 1300 per cent return on their investments per month before they were made to shut down by the US Securities and Exchange Commision. The SEC froze all of their funds, including over $15 million which had been raised during their ICO. Their founder Dominic Lacroix was imprisoned.
The above instances demonstrate that investors need to be highly diligent and make their choices wisely when it comes to cryptocurrency. Not doing enough research into the individual or organisation that you are investing in can lead to a lot of proble
ms and you might be duped of all your money. So, be sure to do some research into the company and identify any indicators that will tell you that you are being scammed.

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