Cryptocurrencies have often been associated with wealth. Many people think that making a mountain of money in a short amount of time is an easy and novel way, although it is quite far from reality. Cryptocurrencies are usually not a method of making money, they are the money itself.
However, scammers around the world have taken advantage of this common mistake to promise unreal profits to anyone who “invests” in their platforms, systems or poorly made tokens. So they managed to raise at least $ 4 billion in 2019 alone between fraudulent initial coin offerings (ICOs), phishing, wrong investments and above all pyramid systems.
Of course, there have been many more crypto scams of all kinds over the years. They are always more successful than others, but there are scammers who have really managed to hit millionaire strikes, even billionaires. Then BeInCrypto offers you the largest crypto scams in history until 2020.
One day, you may encounter Facebook – or any other social network – with a classic ad that is mysterious promises to multiply a very small investment for you for a few days. You should ask how or request more information. The next thing that could happen to you is that they ask for your phone number and flood you with calls to convince you of this magical cryptocurrency investment.
The company that contacts you acts and swears that the more you invest, the more you earn the more you earn. You may even dare to try the platform with little effort and you will see on the screen that your investment is actually multiplying. That would upset everyone, so invest more and more … until you realize that it is not possible to deduct the alleged profits. You didn’t invest anything either.
Here are the experiences of the victims of the infamous Milton Group, which also operates under the names Cryptobase, CryptoMB and VetoroBanc. Behind the scenes, a group of multilingual telemarketers meet in an office in Ukraine, Albania, Georgia or Northern Macedonia to follow the established guidelines to defraud as many of the seized people as possible. In return for their “work” they receive juicy orders.
It is estimated that in 2019 alone and from the call center in Kiev, Ukraine, the Milton Group managed to defraud around $ 71.5 million. Given that the company has been operating for three years and is likely to have generated similar amounts in the past few years, The total is $ 214.5 million. Without counting the numbers of the other call centers; Losses cannot therefore be calculated precisely.
Police investigation into the Milton Group continues, as does the search for the perpetrators.
Investing in cryptocurrency mining machines sounds both tempting and complicated. For this reason, the idea of only bringing in the money while an expert takes care of the handling and maintenance of the machines and software sounds wonderful, so that in the end you can earn as much as possible from the same mining.
This process of investing in miners managed by experts who are experts in the field is known as cloud mining. There are several special platforms on which each user can choose a plan at different costs. Of course, there is always a risk that some of the suspected experts will disappear with the money or remain with the majority.
This was the case with Mining Max, a company based in the United States and mining operations in South Korea. In the early years around 2016, it was presented as a cloud alt mining platform and promised monthly returns to all investors. The page then read:
“Mining Max does not sell its own coins and does not trade coins that are not traded in the Exchange Center. Mining Max is a company that today produces higher quality blockchain coins on the market. Mining Max is a professional mining company that offers the shipping of individual machines for the shipping of mining machines. Mining Max’s large mining farm maximizes the profit margins of individual mining machines with low electrical loads. “
Then they specialized in mining. At least it was believed that the Korean authorities discovered and uncovered the fraud in December 2017. [Yonhap News] Mining Max administrators raised approximately $ 250 million from approximately 18,000 investors from 54 countries, including the United States, Japan, China and South Korea.
It is believed that only 80 million were invested in mining equipment, while 110 million ended up in tax haven bank accounts. The rest was used to pay older investors, who in turn received money from lower users, which became a pyramid scheme.
So far the Mining Max site has been decommissioned. But it is necessary to be vigilant, because in its place we now have BTC Mining Max, a suspicious investment platform in blockchain companies.
Modern Tech (Pincoin and iFan)
This company was introduced in Vietnam at the time as the representative of two Initial Coin Offerings (ICO) in which the Pincoin and iFan tokens were sold. The first was offered as an investment opportunity with monthly (and inexplicable) returns of up to 40%. while the second promised to be the fuel of a new social network for artists.
With this facade, Modern Tech was structured as a pyramid system in which the largest and oldest investors benefited most from it, since the new ones were the ones who paid their interests. [Vietnam News] To join the platform, Each new member was asked to “invest” at least $ 1,000 in the token mentioned; that were never really worth that much.
By 2018, none of the promised earnings had already been paid out. Modern Tech removed all of their social media and never appeared in their supposed offices. The defrauded investors could do nothing more than protest the phantom management and report the case to the authorities: Around 32,000 people had lost $ 666 million. The perpetrators have not yet been caught.
This is another fraudulent case of cloud mining, but it is likely to be more serious than mining max. However, the promise is very similar:
“No continuous fees and 24-hour support. Once you join BitClub Network, you have 1,000 days. There are no additional fees to support mining or upgrade equipment. You can choose what percentage of your mining income is used to purchase additional shares in the group and how much is paid per day. “
Since 2014, plans ranging from $ 50 to $ 100,000 have been offered there to generate supposed profits of between 5 and 12% of the investment. Interestingly, the latest plan can be bought from $ 10,000 to get the same profits.
In December 2019, the U.S. authorities finally entered the platform, which turned out to be nothing more than a pyramid scheme in which new investors paid out old ones. There has never been any mining activity as such and three of the promoters have been arrested. Two more are still looking for and capturing.
Matthew Brent Goettsche, 37, was one of those arrested in Florida. He dared to state openly that the BitClub network’s target was “stupid” investors, formerly known as “sheep”. In his words, they built “this whole model on the back of idiots”.
Unfortunately, the BitClub site continues online. That despite the fact that Thanks to this, approximately $ 722 million has already been stolen.
One can say that this notorious platform was the main crypto scam of 2019. It is of Asian origin and, with a strong presence in China, South Korea and Japan, is very similar to Vietnamese Modern Tech. The main offering of this system was the PLUS token, which investors can use to return between 9 and 20% per month.
Perhaps one of the reasons for their success was that they did not advertise via electronic media, but mostly through meetings and events, in order to speak personally to potential investors. In this way, they were able to take on the task of convincing them both as a group and individually. They also offered their “investment” through chats and even distributed physical advertisements in public places such as supermarkets.
The high percentage of profits were said to come from cryptocurrency trading, mining, and recommendations. In reality, PlusToken was always a pyramid-free system where only new members could bring in fresh money that was paid directly to the older investors or directly to the administrators.
In late June 2019, users had trouble withdrawing their money, and administrators blamed the suspected miners. Soon after, they didn’t bother to make excuses and disappeared with around $ 3 billion from more than 3 million victims. A lot of the scams were amounts in cryptocurrencies that are still following the network:Ethereum and OmiseGo. And the last transaction on his part brought “Sorry, we have to run.”
Blockchain traceability company Chainalysis continued to provide evidence that these scammers and their large volume of OTC exchanges on exchanges like Huobi are responsible for the price drop that BTC had last year. At least six of the team members were arrested. [Odaily]
This may be the queen of all crypto scams to date. It is a long-standing pyramid system on a global level that is strongly represented in the Hispanic world. As they explain to themselves, OneCoin is a cryptocurrency with a private blockchain and a learning platform about the crypto world. OneLife, OneAcademy and OneWorldFundation are part of the same program.
OneLife and OneAcademy are currently offering various “education packages” between $ 110 and $ 55,555. OneWorldFundation presents itself as a non-profit organization for children, which accepts donations in OneCoins, PayPal, bank transfer as well as debit and credit cards.
In the past few years, these alleged educational packages – with material plagiarized from various sources – have included tokens that are said to “mine” onecoins if mining doesn’t even work that way. In addition, users received rewards for these tokens when referring to the platform.
These “onecoins” were not listed on any stock exchange, and the only way to exchange them for fiat money was through the OneCoin Exchange, a member-only internal market. This was, of course, until 2017, when the stock exchange was closed without notice.
In the same year, Ruja Ignatova, the director of the entire program, disappeared without a trace after having been subjected to several complaints in several countries since 2016. Her brother Konstantin Ignatov takes command, and then they promise to launch a OneCoin ICO. .
Fortunately, Ignatov was arrested in Los Angeles in March 2019. [BBC] Unfortunately Ignatova is still missing, and therefore a large part of some Worldwide, $ 4 billion has been raised in numerous countries. However, other sources speak of up to $ 19.4 billion missing from this system. [Hackernoon]
OneLife sites and social networks continue to work. So avoid them.
We can always fight fraud as these are just the least known tricks. It is then necessary to get as much information as possible about the crypto world and to take into account several warning signals that all of these schemes normally have.
First and foremost, each of them requests an “investment” and usually never warns of the risk of loss. All investments involve a certain risk, none of them are exempt. Therefore, if someone mentions that your investment is 100% risk-free and with guaranteed payments, it is most likely intended to do some kind of fraud.
Another important factor to consider is the operation of this platform. Where do you get your money from? Can you prove that you can get it from where it is? Withdrawals are also part of it. If instead of your money trying to withdraw money for a long time you get “technical problems”, “tax requests” or some other excuse, you can be sure that you are a fraudulent actor.
You must also look at the devices on which the system is running. Does it appear on the official site? Could it be verified that these are real personals? And if so, do you have a criminal record?
Research and teaching are key to preventing fraud. Not everything that glitters is gold.
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