Over $7.1 billion has been lost to cryptocurrency fraud since January 2022. Six billion dollars of a total of $7.1 billion were lost to two scams: OneCoin and BitConnect.
OneCoin is by far the largest fraud in the crypto industry’s history. According to official FBI documents, OneCoin robbed investors of about $4 billion, none of which has been returned to investors. The scam happened between 2014 and 2016 and had the advantage of being the first to hit the market. With cryptocurrencies still being a niche asset class, OneCoin’s extravagant marketing and promises of outlandish returns caught the interest of a remarkable number of retail investors.
When the time came to launch the OneCoin Exchange, the only option to cash out OneCoins, the company shut down, and its creator, Ruja Ignatova, reportedly disappeared. While numerous other high-ranking OneCoin officials have been caught and imprisoned for fraud, Ignatova and her brother remain untraceable, along with the $4 billion.
Sprang from the ruins of OneCoin, BitConnect is the second-largest cryptocurrency fraud. BitConnect, which was founded in 2016 as a lending protocol, promised investors daily interest payments calculated by a controversial “trading bot.” These payments would increase if the BCC token’s owner attracted more buyers—at one point, BitConnect promised a 1 percent daily compounded interest rate.
BitConnect’s founders, on the other hand, took away nearly $2 billion in Bitcoin before shutting down the operation. BitConnect’s creator, Satish Kumbhani, and its top promoter, Glenn Arcaro, were arrested and charged with fraud last year; Arcaro pled guilty, while Kumbhani’s whereabouts remain a mystery.
