Fraudulent projects differ in their approach to work
Many scam organizers managed to remain unpunished
Not all projects have “grown” to “scam”
International consortium of news organizations developing transparency standards.
Top 5 Most Common Cryptocurrency Scams in 2021
Unfortunately, participants in the digital asset market are still not sufficiently protected from fraudsters. In 2020, many investors fell for the bait of unscrupulous projects.
The BeInCrypto editorial team decided to recall the scams, the organizers of which managed to deceive the participants of the crypto community.
Empire Market is a marketplace that left, but did not promise to return
At the end of August 2020, information appeared on the network that the popular darknet marketplace Empire Market unexpectedly went offline for everyone. He stored the cryptocurrency of a large number of users.
Assumptions that the platform was just subjected to a DDoS attack quickly crashed into the harsh reality – the site no longer appeared on the network.
According to some estimates, Empire Market administrators went into the shadows, taking with them 2,638 BTC (over $ 61 million at the coin rate as of December 17, 2020). You can find out more about the project’s exit scam from our material.
Compounder Finance and the tricky smart contract
The anonymous developers of the Compounder Finance DeFi project used hidden smart contract features to steal investors’ money. It is noteworthy that earlier a technical problem, thanks to which administrators could commit illegal actions, was noticed by analysts at Solidity Finance..
Compounder Finance smart contract. Data: Etherscan
Due to the fact that no one properly responded to the problem, the developers of Compounder Finance managed to hide in an unknown direction, taking with them many tokens, including $ 750,000 in Wrapped Bitcoin, $ 4.8 million in Ethereum and $ 5 million in DAI.
DistX – exit scam with a DeFi flavor
In mid-December 2020, participants in the DistX crypto project discovered that its founders deleted all social networks of the project, explaining the decision by the need to stop their work.
The developers have promised not to take away the startup’s liquidity. In reality, they brought out the cryptocurrency blocked for the needs of DistX. Against the background of their actions, the project tokens depreciated.
You can find out more about this episode of fraud from our material.
Arbistar 2.0 and Punishment Crime
Information that the Spanish project Arbistar 2.0 made an exit scam appeared online at the end of September 2020. The reason was the shutdown of the Community Bot trading bot, allegedly due to a developer error. The accounts of his clients, according to the classics, of course, were frozen.
The damage from the activities of the Arbistar 2.0 team, according to analysts, can reach $ 1 billion. In December 2020, the CEO of the project, Santi (Santiago) Fuentes, received a suspended sentence. Plaintiffs asked the judge to toughen the sentence.
Bitsonar – pyramid from an ex-official
In June 2020, on the website of the investment project Bitsonar, unexpectedly for many of its users, information appeared that the company had turned into a financial pyramid. The letter was written by a former employee of a startup.
Later it turned out that Bitsonar was run by a CEO who was not presented to investors, but by a completely different person – a Ukrainian official Alexander Tovstenko.
As in the case with any other pyramid scheme, project investors lost access to the withdrawal of funds one day. All they have left is to write angry comments on the still unblocked Bitsonar social networks..
Screen of a message from the Bitsonar VK group
Not grown to scam
There are other projects that many suspect of fraud. Despite this, startups continue to work, which does not allow members of the crypto community to officially label them a “scam” or “exit scam”. Nevertheless, the presence of some suspicious moments casts a shadow on the teams of such projects..
Spanish Blackjack Crypto Ruble
One of these projects is the Monolithos DAO. The Spanish-based startup team has developed stablecoins – Stablecoins – literally translated from English – continue to gain popularity in the digital asset market. With … More ruble-based. It is noteworthy that the very idea of the project contradicts the interests of the RF financial regulator. At the end of November 2020, First Deputy Chairman of the Central Bank Sergei Shvetsov announced that the Bank of Russia opposes the issue of stablecoins pegged to the Russian ruble.
To many participants in the crypto community, the idea of issuing an asset pegged to the national currency of the Russian Federation seemed not the most successful. While studying the project, the BeInCrypto editorial staff also had a number of questions. For example, Monolithos DAO does not have a CEO. At the same time, representatives of the project assure that it exists.
“We have a CEO, as soon as he moves from Russia to a safer place of residence, we will publish his name. It is a matter of time, and in general it is not so important, since it does not affect the work of the DAO in any way “, – so one of the members of the Monolithos DAO team – Dmitry Kryshtal – commented to BeInCrypto about the lack of information about the chief executive officer of the project at the end of August 2020.
As of December 17, 2020, the CEO of Monolithos DAO has never been named. Probably, no “safe place to live” was found for him.
Screen from the official website of Monolithos DAO dated December 17, 2020
It’s hard to do without jokes.
As a reminder, Monolithos DAO was caught plagiarizing Maker DAO documentation. Project representatives assure that the startup team knows about copying, although BeInCrypto was unable to get confirmation of these words from Maker Monolithos DAO.
After the publication of the review by our editorial office, “materials with refutations” appeared in the media supporting the startup. In particular, they tried to convince the readers that there really are agreements between Monolithos DAO and the project team, the whitepaper of which they copied. Screens of correspondence of their representatives were presented as evidence..
Believe it or not such evidence – everyone can decide for himself. At the same time, it is important to clarify that there were no official statements about the support of the startup from the Maker DAO..
Despite the attempts of representatives of the project to maintain its reputation, there are still many comments of this content on the network:
Comment on Monolithos DAO in the project thread on bitcointalk
The low rates of promotion of Monolithos DAO also became a topic for discussion among members of the crypto community.
Comment on Monolithos DAO in the project thread on bitcointalk
However, the Monolithos DAO team assures that they are still ahead.
Forsage in the style of the Egyptian pyramids
Another project that aroused suspicion in the crypto community in 2020 was Forsage. Recall that his team has formed an investment strategy that is in many ways similar to the classic financial pyramid (Ponzi scheme).
In the summer of 2020, regulators in the Philippines complained to Forsage. Specialists of the local Securities and Exchange Commission (SEC) saw signs of a pyramid in the project. Later, Forsage accused Vitalik Buterin of the scam – one of the developers of the second largest cryptocurrency by capitalization, Ethereum.
In one of the posts, he compared Forsage to the Bitconnect and Onecoin pyramid schemes. The startup scheme, according to Vitalik Buterin, is built on attracting new people to the project, with the payment of dividends to its current participants at the expense of newcomers.
“The minute the flow of newbies stops, most of the investors will lose all their investments,” wrote the developer.
他们 对抗 你们 因为 你们 是 骗人 的。 这种 的 的 大部分 的 用户 并 不会 赚钱 ， 反而 会 亏 很多 钱。 种 项目 依赖 于 每天 有 越来越 多人 进来 给 以前 的 参与者 付钱 ， 新的 参与者 没有 了 的 时候 ， 大部分 的 用户 失去 他们 投 的 一切 ， 看看 bitconnect, onecoin 等等
请求 你们 离开 ， 以后 不要 污染 以太 坊 生态 ， 感谢！
– vitalik.eth (@VitalikButerin) August 10, 2020
Later, other popular members of the crypto community joined the accusations of Forsage in organizing the scam. For example, Primitive Crypto Managing Partner Dovi Wan.
Why ponzi scam is always the driving force for bull cycle? As it brings fresh fiat onramp and constant buy pressure from previous no coiners
2020 Forsage (on ETH)
tracking mega ponzi activities with crypto on-ramp has been my best macro strategy https://t.co/li3TiwoRfN
– Dovey 以德服人 Wan (@DoveyWan) September 7, 2020
Despite this, the network still operates platforms through which Forsage attracts investors..
You can learn more about fraudulent projects and get acquainted with the history of the most high-profile scams using our material.
All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..
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