The Biggest Scandals in the Cryptoverse

No doubt, crypto is one of the best things mankind has invented. The Cryptoverse attracts millions of believers and represents a great field for different kinds of enthusiasts, entrepreneurs, scientists – you name it! Sadly, even here there are individuals with not so positive energy, simply put, scammers.

We already talked about crypto crimes and gave some advice on how to protect your money, nerves and well-being. Today, we’ll tell about a couple of the biggest scandals in crypto, because being forewarned is being forearmed.

BitConnect and the Ponzi scheme

BitConnect’s ICO was one of the most promising in the end of 2016. Its token BCC was one of the most rapidly growing the year after, with market capitalization $2.6 billion. Sounds like a dream… So, what went wrong?

Early suspicions came around the platform’s business model which was resembling a pyramid, or Ponzi scheme. In other words, users would be getting enormous profits in just one month (up to 40%!), where the profits would depend on the initial deposit sum, the bigger the better (of course). The project was guaranteeing 1% of the ROI, daily. Who wouldn’t fall for it?

As a matter of fact, Vitalik Buterin wouldn’t. He was one of the first to express his concern regarding BitConnect in his Twitter account. Charlie Lee, a Litecoin creator, also warned users not to put their money into this project and branded it as a ‘ponzi’. 

Nevertheless, the company continued existing and getting more and more users, until it crashed in 2018. The BCC rate collapsed 96% of its price. Bearing in mind that it coincided with the Bitcoin drop, no wonder there was an army of desperate users who’d lost everything, and even special committees created to support victims of this project.

And the moral of the story is?

In the crypto world (and not only), if something looks too good to be true, take another minute before moving forward with it. Think, analyze, check what experts think. And, following one of the main rules of trading, only use the money you can afford to lose.

Finnish Crypto Millionaire Losing $24 Mln

A young crypto millionaire from Finland, Aarni Otava Saarimaa, became a target of fraudsters and lost almost $24 mln worth of bitcoin. How did this happen?

Story goes that Aarni Otava Saarimaa was contacted by people from Thailand with the proposal to buy shares of three Thai companies and some cryptocurrency named Dragon Coin, that would be also used in one of the Macao casinos. Enormous benefits were promised.

Scammers even brought Saarimaa to the casino to see for himself, after which the Finn transferred them 5,564.4 BTC. The money ended up in the scammers’ e-wallets and was converted into fiat. The Finnish businessman never got his promised profit, because no real steps or purchases were made.

Half a year later, in January 2018, Saarimaa filed a report with Thai police, and investigation began. It took the police 7 months to get the first arrest warrants; three people got arrested and 6 more were still wanted. The biggest part of the stolen money was remaining on the bank accounts of suspect individuals ($22,34 mln in total). Some money was used to buy real estate, which led to money laundering charges against some of the suspects.

At the end of August 2018, Saarimaa stated that after negotiating with two main suspects, they came to a certain agreement, details of which he refused to reveal. That means, his complaint could be eventually withdrawn.

And the moral of the story is?

It’s wise to not trust blindly the first random stranger coming up with some offer. It’s important to carefully consider any moves involving the money. Avoid middlemen unless it’s a certified expert or trusted source.

At CoinMetro, security is very important. We make sure that all our active users go through KYC and AML checks which makes them – and us – compliant. Create an account at CoinMetro and submit your KYC if you haven’t done it yet, and see for yourself!