Although the cryptocurrency market has potential for excitement and financial gain, it also carries some inherent risks. The FTC claims that since the beginning of 2021, over 46,000 victims have reported losing over $1 billion in cryptocurrency to scams. The 2018 loss total was nearly sixty times lower than the 2017 total, with the median loss per person being $2,600 in 2018. Unfortunately, crypto scams like exits and hacks are commonplace in this ecosystem. Scams also continued to increase in 2022, even as the cryptocurrency market experienced its worst crash to date. Research shows that investing-related frauds and impersonation frauds from legitimate businesses and government agencies were the most common types of scams that have occurred over the years. The following are examples of the audacious and biggest crypto exit scams discovered so far.
Crypto Exit Scams
Thodex
In April 2021, the founder of Thodex told investors that the platform would be “temporarily closed” before shutting it down permanently and making off with $2 billion. Faruk Fatih Ozer, the founder, is still on the run despite his denial that it was an exit scam. According to some estimates, the theft could have cost as much as $2.6 billion.
Africrypt Exchange
Africrypt, a cryptocurrency exchange based in South Africa, was founded by two brothers who were just 18 and 21 years old at the time. In April of 2021, after an unknown “hack,” the company blocked customer access to their funds. As soon as the website went offline, the brothers vanished. Using a Ponzi scheme, the two brothers allegedly raised $3.6 billion before stealing Bitcoin from their investors
SushiSwap Exit Scam
In 2020, the anonymous creator of the cryptocurrency SushiSwap pulled a bizarre rug pull that became known as one of the largest and one of the most well-known crypto scams to rock the market. They cashed out a large number of tokens, exactly 2.5 million SUSHI and 20,000 ETH. It was approximately $13 million at the time.
CertiK
CertiK, a blockchain security firm, has announced in its recent post that their respective creators have pumped away two newly created contracts, CirculateBUSD and CirculateWBNB. The $2.5 million was apparently stolen by the people who drafted the two contracts. Once on Ethereum, the funds were transferred to Tornado Cash, an OFAC-approved coin mixer.
Conclusion
Scams and frauds are common even in the well-established, centuries-old stock markets, which have been well-regulated for decades or even centuries. When it comes down to it, it’s the investor’s responsibility to avoid losing their money to crypto exit scams. To avoid exit scams and put your money where it will be safest, you should verify the legitimacy of the project you’re considering investing in.
