Bitcoin, the first and most popular cryptocurrency, set another all-time trading high in March when it surpassed the $70,000 level, higher than its previous peak of just under $69,000 in November 2021.
Bitcoin is not the only cryptocurrency that recorded a significant increase in its price in 2024; altcoins like Ethereum and Solana, among others, also saw an increase in their price level.
The media coverage of cryptocurrency trade performances and the possible chance of making profits in times like this usually attract many potential investors, especially novices.
While cryptocurrency investments offer the chance to make quick money, especially if you are lucky enough to have purchased a crypto before its price skyrocketed, they remain a high-risk investment, and you may also fall victim to scammers.
Criminals are well known to prey on unsuspecting victims, and because many people do not fully understand how crypto works, identifying and avoiding potential fraud can be difficult.
Some of these criminals are also more confident in their scams because crypto transactions allow the use of pseudonyms instead of real names, hence making it harder for victims to trace as opposed to typical financial transactions.
However, hiring a crypto scam lawyer can help you recover your losses if you are a victim and also ensure the perpetrators face the full wrath of the law.
Steps to take if you or your loved ones are a victim of a crypto scam
If you or your loved ones have fallen victim to a crypto scam, here are some steps you can take:
Maintain calmness
This is not easy, but you need to think straight and avoid making decisions you may later regret.
You may share your predicament with friends, families, or people you trust in the crypto community. They can help you remain calm and advise you on the best course of action.
Document the incident
Once you identify that you have been scammed, do not rush to accuse the scammer, as they may delete conversations or make their websites inaccessible to cover their tracks.
Instead, gather enough evidence about the incident. Compile the transaction IDs of all the funds you sent. Note the website URL, IP addresses, and other pieces of evidence of your interaction with the scammer.
Create a detailed timeline of events to assist law enforcement in tracing the scammer.
Contact authorities
Once you have gathered enough evidence to prove a case of a scam, do not hesitate to contact the FTC or relevant authorities in your area. The earlier you do this, the higher your chance of getting your money back.
Hire a crypto scam lawyer
Crypto scam lawyers have in-depth knowledge of blockchain technology, cryptocurrencies, and the law governing them.
A reputable crypto scam lawyer can guide you on the best steps to take to recover your funds from the scammer.
The top 8 biggest crypto scams of all time
OneCoin: $4 billion
The OneCoin crypto scam was considered the biggest in history at the time it happened. The altcoin was founded in 2014 by Ruja Ignatova, a Bulgarian woman known as the Cryptoqueen, and her co-founder, Karl Sebastian.
The founders claimed the altcoin was the next big thing after Bitcoin when in reality it is worthless. It has no known publicly available blockchain, and the price was determined by the team instead of market forces.
In total, the mastermind of the crypto scam made away with about $4 billion of investors’ money.
Sebastian was convicted and sentenced to serve 20 years in a US prison in 2023, while Ignatova remains at large.
Bitconnect: $2.4 billion
BitConnect was founded by Satish Kumbhani, who is from Hemal, India.
It operated a pyramid scheme that relies heavily on paying existing investors with funds from new investments.
According to the U.S. Department of Justice, Kumbhani and his co-conspirators obtained approximately $2.4 billion from investors.
In 2023, over $17 million in restitution was distributed to about 800 victims of the crypto scam.
Other crypto scams worthy of mention and the amount lost by investors include:
- Thodex: $2 billion
- $SQUID token: $3.38 million
- Bitclub Network: $722 million
- Quadriga: C$215 million
- Mt Gox: $450 million
- FTX: $8 billion
How to spot a crypto scam and avoid being a victim
There are two major ways scammers obtain cryptocurrency from their victims: by hacking victims’ digital wallets or manipulating them to transfer their cryptocurrency directly to them.
To avoid falling victim to crypto digital wallet hacks, ensure you only use a secure platform, create a strong password, and enable two-factor authentication. Also, avoid using public Wi-Fi to access your wallet. Be cautious of the links you click in chats and emails.
Below are ways to spot and avoid crypto investment scams:
Read the whitepaper
A cryptocurrency white paper is a published document that details important information about the crypto project.
A fake white paper may be plagiarized, poorly written, and claim figures that do not add up.
Many of them do not highlight the major reason for the Initial Coin Offering (ICO) and how they intend to use the money raised.
Identify and investigate team members
Do online research on the team members identified in the white paper. Ensure they are who they think they are.
However, having a LinkedIn profile is not enough; some crypto scammers may create fake profiles. Go a step further by confirming they are indeed graduates of their respective schools or former employees of any company they might claim to have worked for in the past.
In cases of open-source crypto projects where the members and developers are not openly disclosed, check comments on GitHub and Discord to see what people are saying about them.
Scrutinize the marketing language
Most genuine cryptocurrency developers do not single-handedly market the project coin.
If a crypto project team is investing heavily in marketing and PR, scrutinize their promise to potential investors and compare it with their white paper.
Crypto projects boasting in marketing campaigns to be the next best crypto are usually scams.
