With billions already lost to fraud, crypto scams stay in vogue

MANILA, Philippines — Cryptocurrency scams grabbed attention and headlines in the past decade as the allure of decentralized finance and get-rich-quick schemes proved too popular to ignore.

Data provided by Crystal Blockchain, an analytics tool servicing banks and financial institutions, showed that the top three cryptocurrency frauds tallied a total of $5.9 billion in stolen funds from 2011 to 2022. 

Plus Token, which topped the list, saw a total of $2.9 billion worth of Bitcoin and Ethereum stolen. The fraud, disguised as a Ponzi investment scheme, happened back in December 2019. 

Trailing second was Thodex. The fraudulent scheme, this time in the guise of a global cryptocurrency exchange, suddenly barred users from accessing and from withdrawing their funds. The platform was birthed in 2017 and the fraud was reported in April 2021. 

Another Ponzi scheme, Wotoken, made the list. The scheme saw 700,000 defrauded of a total of $1 billion at the height of the pandemic in 2020. Perpetrators employed similar methods as the Plus Token fraud, before the reveal that Wotoken scammers were part of that scam as well.

The Ronin network exploit, which was exposed in March of this year, also made the list. Ronin is the blockchain used by crypto game Axie Infinity. The breach saw $650 million stolen, mostly in Ethereum, from the blockchain. 

Fraudulent cryptocurrency schemes went mainstream in the past two years, as the pandemic accelerated the adoption of the decentralized currency.

The most recent was the collapse of FTX, one of the biggest cryptocurrency exchanges around the world. FTX’s fall from grace came as the exchange witnessed a bank run, after rival Binance pulled out $500 million worth of investments.