5 Biggest Crypto Scams of 2021
Recap of 2021’s biggest and most pricey scams in cryptocurrency space.
Although cryptocurrencies and blockchain technology offer almost endless new possibilities — often times tied to making, saving or managing finances — because it is still a fairly new technology and unexplored territory, it is also full of scammers, pump-and-dump schemes and similar. In 2021 alone, scammers stole $14 billion worth of crypto-assets, and that was inarguably in huge part due to the rise of DeFi (decentralized finance) services.
Let’s take a look at some of the nastiest scams that happened last year:
Squid Game token
Netflix hit Squid Game became one of the most popular series of 2021. It is no surprise then, that even in crypto community, scammers and people trying to profit off of the popularity emerged.
One particular project, Squid Game token, went from zero to almost $3000 in only a few weeks. Even mass media became interested in the altcoin, even though no official creators of the show were involved in the token project and investors weren’t able to sell their tokens (quite a red flag!).
Unfortunately, Squid Game token has been uncovered as just another rug-pull, when the developers suddenly pulled out of the project, abandoning it and escaping with over $3 million.
Africrypt was a cryptocurrency investment company and exchange ran by two brothers, Raees and Ameer Cajee.
In April 2021, the brothers claimed the exchange was hacked and all of their clients’ accounts were compromised. But the story didn’t add up and was quickly picked apart by investors and public.
However, the brothers were already gone, along with around $3,6 billion (according to estimations of victims’ lawyers) of their clients’ funds. To this day, their whereabouts remain unknown (and the investors dissatisfied).
In June 2021, some of the members of an e-sport team FaZe started promoting a charity-based cryptocurrency SaveTheKids. They really went all out with promotional videos and official association with Save The Kids charity on their website.
But soon after the token’s launch, the initial investors sold their holdings and shortly after that the cryptocurrency went to zero.
A textbook pump-and-dump scheme.
The almighty Internet started noticing a pattern where FaZe clan members would promote new cryptocurrency, which would then dump after its launch. An investigation followed and since then, FaZe clan suspended many of their members. At least a somewhat-satisfying ending.
Bored Ape NFTs
Calvin Becerra is a former owner of three NFTs from the notorious Bored Ape Yacht Club collection. For those who aren’t familiar with the BAYC, current estimated floor price for each of these NFTs is around $225 000.
Becerra announced on his Twitter, that scammers, posing as technical support trying to help solve a problem with his art pieces, stole all of his three Apes. He then proceeded to argue that the blockchain records, clearly showing that he is no longer the owner of those NFTs, are irrelevant and he is still the owner. It is no surprise that he had very little success among the crypto community with this approach.
Moreover, Becerra claims that his NFT trio had combined worth of $1 million.
Happy Ending: Poly Network Hack
Poly Network (not to confuse with Polygon or PolySwarm), a not-so-well known DeFi platform, experienced maybe the biggest hack of 2021.
Over the summer, a hacker spotted a flaw in the security of the platform and managed to steal $600 million worth of funds. However, in the following weeks, he reached back to Poly Network claiming it was his intention to discover and expose possible security breaches before they can become truly exploited. He returned all of the stolen funds and became known as the Mr. White Hat.
Additionally, Poly Network awarded him $500 000 for the return and his service.
A win-win situation in the end.