PlusToken is one of the latest and largest Ponzi schemes ever recorded in the crypto world. The scam conducted most of its marketing campaign via the Chinese messaging app, WeChat, by enticing investors with the prospect of generating 10-30% monthly returns on investment. PlusToken attracted over 3 million investors, a majority of which were located in China, South Korea and Japan. The entire business model of the project centered around crypto literacy and a wallet service.
Crypto Ponzi Schemes that Ravaged the Digital Asset Market in 2022
The scam size in the US alone was estimated to be INR 18,000 Cr ($2.4 Bn). According to the Surat CID team, which has been investigating the case in India, it is worth INR 41,000 Cr, out of which Darji got a 10% cut or INR 4,100 Cr. He had allegedly run two more copycat scams known as Dekado Coin and Regal Coin scams. Lately, crypto has become all the rage as a get-rich-soon investment solution, and scammers find it convenient to target the uninitiated with a variety of crypto Ponzi schemes. Scams of different shapes and sizes are frequently rolled out to cash in on the buzz of quick big returns around crypto. And the people who are easily lured are ill-informed buyers/investors caught up in the spiral of greed.
What is the market cap of DXdao (DXD)?
The SEC’s actions against Forsage followed the charging of a former Coinbase employee with insider trading. These charges demonstrate ongoing efforts to combat fraudulent activities within the crypto industry. Although similar in some aspects, a pyramid scheme differs from a Ponzi scheme in its structure.
What is the daily trading volume of DXdao (DXD)?
The trading volume of Krypton DAO (KRD) is $7,094.15 in the last 24 hours, representing a 9.80% increase from one day ago and signalling a recent rise in market activity. Third, some of these people like Amit Bhardwaj, Ranjeet Saxena and Divyesh Darji have been involved in multiple scams. However, the investigative agencies have not widened the scope of their investigation. For instance, Pune Police who are investigating the GainBitcoin scam have not been investigating Bitconnect and similar is the case with Surat CID. “Some of the key accused in these cases got anticipatory bail (which may hinder investigation). In other cases where chargesheets have been filed, the accused are absconding.
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Investors in the crypto market are well aware of the potential for high returns that stem from the innovative nature of blockchain technology, particularly in sectors poised for mainstream adoption in the near future. Over the past 5 years, it has been reported that more than 20 billion USD (!) have been stolen in various cryptocurrency Ponzi schemes. This alarming statistic highlights the unfortunate reality of numerous cases where investors have experienced detrimental consequences due to the actions of malicious individuals operating within the blockchain industry. With a price decline of -57.10% in the last 7 days, DXdao (DXD) is underperforming the global cryptocurrency market which is up 1.00%, while underperforming when compared to similar Polygon Ecosystem cryptocurrencies which are up 0.00%.
Like other scammers, Ether Trade Asia posed as a crypto trading platform, offering 3% daily returns on investments. But every time a trader wanted to withdraw their tokens, the platform did not allow it citing ‘technical glitches’. The website did not even publish any company’s physical address or an email ID for contact. At the height of the Bitconnect fraud, Michael James and Raymond Weil launched a similar staking scheme, promising up to 50% monthly returns for holding its all-new token Regal Coin. The crypto was listed on a few exchanges, including CoinExchange.io, BTC-Alpha and Yobit.it, but its value nosedived from $70+ in October 2017 to $0.005 in 2019. According to its UK filings, Regalcoin Corporation, the company behind the coin, was dissolved in September 2019.
Like a Ponzi scheme, a pyramid scheme relies on new investments to pay returns to earlier participants. A Ponzi scheme disguises itself as a legitimate venture, claiming to generate profits through services or product sales. On the other hand, pyramid schemes do not attribute the alleged profitability to any legitimate business activity. Instead, they focus solely on the inflow of new investments without a genuine revenue-generating mechanism. The world of cryptocurrency offers abundant investment opportunities.
In 2016, GainBitcoin emerged as a cloud mining solution based in India, attracting investors with promises of 10% monthly returns for 18 months. Despite its outlandish claims, GainBitcoin managed to accumulate over $300 million in investments from Indian participants. However, investigations later revealed that the project had no physical mining equipment or mining operations, exposing it as an elaborate Ponzi scheme. As usual, the introductory sessions promised 40-70% monthly returns on https://turbo-tax.org/. But when a global user base, especially from India, Indonesia, the Netherlands and the African continent, came on board soon after the launch, the website went down.
- In other cases where chargesheets have been filed, the accused are absconding.
- Onecoin is perhaps the longest-running Ponzi scheme ever witnessed in the crypto industry.
- We hope that as you read this, it is because you prioritize educating yourself for prevention rather than recovery.
- Average investors do not fully understand the technology that crypto uses or how to evaluate a cryptocurrency as a sound investment.
- The scam primarily targeted Chinese investors, leveraging the popular messaging app WeChat for marketing purposes.
A crypto Ponzi scheme is an elaborate investment scam that entices investors with the promise of high and quick returns, leveraging the allure of cryptocurrencies. In this fraudulent scheme, the perpetrators create fictitious crypto enterprises and manipulate investors with compelling narratives and false statistics. Their primary objective is to collect money from new investors and distribute it as supposed profits to earlier backers, giving the illusion of a successful investment endeavor. However, the scheme eventually collapses when new investments dwindle. According to Surat CID, in charge of the probe, Darji asked each investor to buy a Regalcoin at $2 and get $100 on each token in a short span. He also promised that the Regalcoin would earn better returns than the bitcoin, the poster boy of the crypto industry.
In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons. Ponzi used funds from new investors to pay fake “returns” to earlier investors. This article features the 10 crypto Ponzi schemes that ravaged the digital asset market in 2022.
The price of Krypton DAO (KRD) is calculated in real-time by aggregating the latest data across 2 exchanges and 2 markets, using a global volume-weighted average formula. Darji of Bitconnect ran the operations in India under an MLM scheme called Regalcoin Affiliate & Network Programme, where investors used to get 7%, 2% and 1% at level 1, level 2 and 3, respectively. Depending on the investment level, they earned a bonus of 5%, 3% and 2%, respectively. Like Bitconnect, the company had a lock-in period (99 days for Regal Coin), and a bot determined the interest rate on investments. GainBitcoin is considered one of the biggest Ponzi schemes globally, with more than 8,000 investors losing their money.
On further inquiry, I found that he had little knowledge of cryptocurrencies or their legal implications. He just had a nodding acquaintance with MLM schemes and how they worked. “Lemme show you some pictures… This guy has bought an INR 2 Cr flat in the Film City,” said the cab driver, as I looked distinctly disinterested in his multi-level marketing scheme. Lionsgate network is a registered LLC in Israel with a public business address.
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Another major crypto Ponzi scheme, Bitconnect, launched in 2016 as a Bitcoin lending solution promising monthly returns of 40%. The operators were unknown developers headed by an individual named Satao Nakamoto, which is obviously a pseudonym. Investors had to purchase BCC tokens, lock them on the platform and wait while trading bots used their locked funds to trade.
The major crypto scams discussed so far show how prevalent such incidents are and how they rob the consumer investment markets of billions of dollars. The absence of a pan-India watchdog/regulatory body scrutinising these digital assets and flashing the early warning lights also makes the country a hotbed of crypto scams. Add to that botched-up investigation in many cases, primarily due to these scams’ opaque and highly technical nature.
It was a more aggressive Ponzi scheme than what Bhardwaj sold under GainBitcoin. Morris Coin targeted Indian investors, with Nishad K and his team promising daily returns and referral benefits. Investors were lured into depositing a minimum of INR 15,000, with the promise of a daily return of INR 270 or a 4.4x profit. The scheme attracted approximately 1.1 million individuals, primarily from India. However, the Morris Coin affair took a bizarre turn when an ICO was announced, and a white paper was published, further fueling suspicions of fraudulent activities.
Ultimately, the fraudsters convinced investors to boost their earnings by buying the project’s token, PlusToken. One of the 10 crypto Ponzi schemes that ravaged the digital asset market. Like GainBitcoin, Mining Max also used an ostensible cloud mining venture to mask the true nature of its illegal operations. The platform promised investors an avenue to capitalize on widespread crypto hype. Mining Max pitched the idea of participating in a multi-crypto mining ecosystem, which had the potential of generating high returns. However, just like every other crypto Ponzi scheme, much of the business model relied on heavy marketing campaigns geared at attracting new investments.
Indians have fallen prey to dozens of crypto scams like Bitconnect, Morris Coin, Ether Trade Asia and more. For instance, if we take the below 12 crypto scams into account, the total amount that people lost in these scams is over INR 72,000 Cr. This is when we have taken the lower amount into the account, otherwise Bitconnect alone by dekado coin some could cross INR 80,000 Cr. However, the data mentioned in our stories has been taken from chargesheets, and the corresponding investigatve agencies’ estimations. The trading volume of DXdao (DXD) is $6,118.91 in the last 24 hours, representing a 345.40% increase from one day ago and signalling a recent rise in market activity.
