Worst Crypto Scams in Recent History
The internet’s most notorious figure, Logan Paul has never shied away from the good and bad press.
While he’s making a mark in the sporting world, some skeletons have been found in Logan’s closet regarding crypto and NFTs, with many claiming he owes millions to fans.
Crypto scams have been hard to avoid since Bitcoin’s launch in 2009. The last bull market however created a mass influx due to the mainstream coverage crypto received in 2021.
Due to the innovative nature of blockchain technology, regulators have struggled to keep up with the ever-evolving crypto landscape. It’s only been in the last 12 months that regulators such as the SEC have been clamping down in court.
Surprise, surprise even celebrities have been able to exploit people through them, their own fans may we add.
For some reason many people’s moral compass is swayed when it comes to not only crypto, but money in general. Greed and lust gets to the best of us, including some of the top earning celebrities and influencers on the internet!
More times than not there are very little legal repercussions that come about from these scams, but that may change over the next few months and years.
Read on to find out about the top crypto scams and who’s been behind them.
Crypto scams you need to know!
What’s scary about this list is the sheer volume of money stolen, along with some of the names associated with the scams. The line between fans and influencers/celebrities is clearly blurred here as they attempt to leave fan’s out of pocket for their own gain.
Buckle up as we cover the top 3 crypto related scams. We want you to be safe when investing in cryptocurrencies so thank us later
1. Ronaldinho
It has hit the news recently that iconic soccer player Ronaldinho was caught up in a crazy crypto scam.
Although denying any part in this, headlines have shown that a $61M crypto scam was brought forward in a congressional hearing.
The scam was “18kRonaldinho” which promised users 2% returns on crypto daily. It has been noted that whilst it appears to be Ronaldinho’s brand, he himself has testified he was merely just a partner rather than sole owner.
Cryptocurrency seems to be a playground for sporting stars to collect a nice paycheque, seeing the likes of Tom Brady, Ronaldo and Lionel Messi getting involved with their own projects or the promotion of crypto based companies.
Despite claiming innocence, Ronaldinho failed to show up to two court cases. Anyone interested in this case will raise their eyebrow at this information regarding the soccer player, after all if he was truly not guilty there’d be no reason to avoid the case.
When first brought to light in 2020, Ronaldinho was actually criminally charged for this and was caught using a forged passport when police caught him in neighboring Paraguay.
He has remained strong to his ‘not guilty’ verdict, the court will have the last say though.
Could this ex 2 times FIFA World Cup winner be facing jail time? We feel it’s not looking good for this sporting star.
2. Logan Paul
Our next influencer crypto scam has definitely not been as quiet as the Ronaldinho case!
Logan Paul, popular social media and YouTube personality, got caught out by investigative journalist Coffeezilla at the backend of 2022.
In a series of YouTube videos that featured both victims of the scam and some of those who were a part of it, Coffee helped to break down the scandal that can actually be dated back to 2021 amidst the last crypto bull run.
Cryptozoo is the name of the project, and it was set to be a crypto game where users get NFT characters from mintable eggs. They hatch the eggs, play the game and level their characters up to evolve and create rarer ones to either use in the game or sell for real money.
Of course, like many of these examples a lot of online hype is created by the founding team and the community they build on sites like Twitter and Discord. Even Logan himself was active for some time in the Discord, and often promoted it on his famous podcast viewed by millions of impressionable fans around the world.
As time progressed, milestones weren’t met and the team fell silent online. That was until it was brought to light again by Coffeezilla.
He banded the early investors together to create his docu-series. Some of the unlucky were supposedly investing tens of thousands into Cryptozoo. Sounds ludicrous, but when a figure like Logan Paul talks crypto, you can see why people get drawn in.
Back in January, after much back and forth between both Paul and Coffeezilla online, a conclusion was met. Logan would pay back fans a total of $1.8 million.
This is yet to be paid back as seen by a site dedicated to counting how many days it’s taken him to give the victims their money back.
Judging from Logan’s erratic response and lack of accountability this could be an ongoing case for him until real legal action is taken. $1.8 million is probably light change for the influencer, still there seems to be no rush getting this sorted though from the Paul camp.
3. FTX
The FTX exchange itself wasn’t an influencer, nor was their CEO Sam Bankman-Fried (SBF). Although some in the ‘effective altruism’ movement might beg to differ.
Strategically though Sam and FTX did use influencers to market the crypto exchange. They handpicked some of the biggest names in Hollywood to broadcast their platform and services.
- Graham Stephan
- Gisele Bündchen
- Stephen Curry
- Kevin O’Leary
- Shaquille O’Neal
- Tom Brady
- Andrei Jikh
- Meet Kevin
- Larry David
Through this clever marketing technique, FTX were able to get their brand in front of millions of people online. Combine that with their offline marketing and they became one of the biggest exchanges in the crypto industry.
Some of the YouTube creators have just featured in a lawsuit that included some of the celebrities too. It was stated that:
“Though FTX paid Defendants handsomely to push its brand and encourage their followers to invest, Defendants did not disclose the nature and scope of their sponsorships and/or endorsement deals, payments and compensation, nor conduct adequate (if any) due diligence.” — Edwin Garrison, Florida Court.
In the end, FTX is liable for around $10 billion in lost user assets.. To further add salt to the wound, their CEO SBF has been locked up since December 2022.
His trials are set to go ahead in October along with the list of influencers who have featured in lawsuits.
Graham Stephan and Meet Kevin have been made an example of in a lawsuit, totalling $1 billion across all those brought forward.
Many of these creators have made apologies on their platforms and have been at the brunt of callout videos by YouTube vloggers not to mention the brutal public voicing their opinions in the comments sections.
We’ll see if any of these celebrities will make an appearance in the upcoming FTX and SBF trial in October.
Lookout for those pesky influencers!
Influencers and even celebrities will always be out to make a quick buck. Social media has helped pave the way for individuals to market and promote new ventures, especially in the crypto space.
2023 has been the year of legislation within crypto and blockchain. The SEC have gotten involved, suing some of the biggest companies in cryptocurrency for misrepresenting products like staking to their customers.
Once FTX was brought down, it was clear that the final straw had been pulled. 2020–2021 was riddled with controversy and rug pulls across the whole of crypto so now is the time for laws that protect consumers and hold bad actors to account.
If you have fallen victim to any of these controversies and are unsure of how to go about resolving the issue, get in contact with your country’s official regulator.
Don’t let these crypto scams hold you back! Investing and learning about blockchain technology can be lucrative with correct due diligence.
One of the main principles of crypto is self-sovereignty, something not necessarily at the helm of traditional banking where regulation is long established. Although more legislation is now being implemented to protect consumers, users still need to take responsibility for their own funds, practicing risk management and securing their digital assets with hot and cold wallets as well as the likes of private keys and two-factor authentication.
And don’t forget, with this increased responsibility also comes more opportunities to earn from your digital assets.
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