Top 10 Biggest Exit Scams of All Time

 

exit scams

Hey guys!. In this post, I’ll be discussing a list of Top 10 Biggest Exit Scams of All Time. Exit scams suck for everyone. Even the people who took the money. Because either they have to live on the run for the rest of their life or face prison time. See an exit scam at it’s core is a con. Someone has tricked people into giving them money, and then they run off with the money. If you’ve ever bought something online from a shady person and never received your order, you might have been exit scammed. But those are small potatoes compared to what we’re about to get into, because this is a list of the top 10 biggest exit scams ever. Now let's get started!

10. Darknet Markets

Darknet marketplaces are websites on the darknet that let sellers list their illegal goods for sale and buyers can come and buy them. Such as drugs. Now when you buy something here there’s an escrow service. You send the website your crypto coins or bitcoin, and they hold it, until the seller proves they shipped the item. Then the money is released. This makes it harder for someone to scam you on the site. But it also means that at any given time, the darknet marketplace is holding a lot of its users crypto coins. In 2016 there was a darknet marketplace called Evolution which was pretty big at the time. And suddenly without any warning it froze the escrow service on the site, making it so nobody could withdraw their money. Then the whole site went down. It’s believed that this was an exit scam because there were $12 million dollars in peoples escrow accounts at the time and administrators seemed to have made off with everyone’s money. There are darknet marketplaces that were up for a while then suddenly shut down, trapping all the escrow funds with it. But just because a site suddenly shuts down doesn’t always mean it’s an exit scam. Sometimes these darknet market operators gets arrested and the feds shut it down, it’s just that the arrests don’t make the news and nobody knows why it was shut down. So with so much speculation out there and combined with how the people running these places are very secretive, it’s really hard to make an accurate list. I’ll give you an example, another darknet market place was Sheep market. It suddenly shut down in 2013 without warning and it took with it $40 million dollars in crypto from its users. But it claims there was a massive breach which took the majority of the money. So it sounds like about $39 million were stolen by a hacker, and then around $700,000 was left and the site owner just took that and shut the site down. Empire was another darknet marketplace. Actually I think it was the biggest one out there in 2020 when it suddenly shut down. And it took with it $30 million dollars of users' money. It’s speculated that this too was an exit scam. But really, these darknet market exit scams just barely make the. Because crypto scams are the true leaders in this space. 

9. Guiyang Blockchain Financial Co.

In 2018 a company called Guiyang Blockchain Financial Co LTD created three new crypto coins. ACChain, puyin coin, and biolifechain. Now the thing you have to understand about these new crypto coins is that those who are watching the crypto space have all seen when bitcoin went from a dollar a coin to $50,000 per coin, and so many people want to find that next unicorn to get in on early and hopefully ride the wave to the moon. And anyone can go out and create a new crypto coin these days. It doesn’t even take that much work. So this company created 3 new crypto coins, and showed promise that these coins were going to rise in value. Now when a coin is first introduced it often does what’s called an ICO, initial coin offering. This is where the company that made the coins offers the coins for sale to the public for the first time. This is typically done before they are even available to be traded or mined. So the only way to get in at the beginning is to actually buy the coins through the website. And that’s what they did. People bought $60 million dollars worth of these coins through their ICO. But then, the company suddenly closed shop, and walked away with the $60 million dollars they made through their early sale of coins. Today the coin is worthless and I’m not even sure if it’s tradeable. So if you bought some, there’s no way to jump out. I’m not sure what happened to the people who ran this site. 6 people were arrested in Shenzhen China for running this scam. 

8. Control-Finance

Control-Finance was a crypto trading and investment platform that launched in 2017. Similar to other scams, the exchange raised millions in investments before the founder, Benjamin Reynolds, went missing. The platform held at least $147 million in investors’ money when it shut down its services and blocked withdrawals and transfers. The company sent an email to users after the shutdown reassuring them that they would receive their money, but the website never came back online. At least $147 million were lost, almost certainly stolen, upon exit. 

7. QuadrigaCX

The story of QuadrigaCX is a complex and scandalous one that certainly involves fraud and smells like an exit scam to. Here’s the skinny of it. The QuadrigaCX was a crypto exchange, founded by a guy named Gerald Cotton. Now exchanges, by design, need to have control of a users funds. And the exchange then has the burden of keeping that money safe. This is typically done by storing the funds in a cold wallet, offline, like on a USB key somewhere, away from the hands of any hackers. Gerald Cotton is who had control over that cold wallet and was keeping it in a safe place. Well in 2019, Gerald Cotton was reported dead while traveling to India. He was the only one who had access to that cold wallet, which meant the users of the site couldn’t withdraw their money. This resulted in quadrigacx going down with a lot of unhappy users. But the death of Gerald Cotton is filled with mystery and suspicion that leaves many to wonder if this was an exit scam and Gerald faked his death. There’s a wonderful podcast called Exit Scam which goes into detail of the story. But whatever happened, Gerald Cotton now has control of $240 million dollars from his users' money, with no intention of ever paying it back. 

6. Pincoin

Pincoin was a crypto coin made by a company called Modern Tech out of Vietnam. Now some crypto coins out there provide interest when you hold them. That is you might make 1-8% interest just by holding on to your coin and doing nothing. This is becoming more common, even ethereum does this now. But pincoin promised 40% returns to investors! Well this attracted 32,000 people to buy Pincoin during the ICO. Modern Tech raised $650 million dollars through this sale. Then took the money and ran. It looks like the company’s 7 founders who took off with the money have not been arrested. $640 million dollars stolen and we’re only half way through the list! 

5. Bitconnect

This UK-based exchange started in 2016 and quickly grew in the crypto marketplace as investors bought in under the promise of high returns. The company offered an ICO in 2017, and soon boasted a market cap of over $2.6 billion after waging an aggressive social media marketing campaign. While it looked like it was modeled after a Ponzi scheme, BitConnect would grow to become one of the top 20 exchanges in the world, offering its proprietary coin of the same name. But in January 2018, after the UK government and securities authorities from both Texas and North Carolina filed cease and desist orders against the company citing fraudulent practices, the exchange halted trading and lending on its platform. While BitConnect refunded its customers, it did so with now-useless BCC tokens, which dropped 90-95% in value following the announcement. While the company dealt with as much as $2.6 billion in investments, it’s unclear exactly how much they made off with. Given that they had a market cap of $2.6 billion and appear to have made off with nearly all the money invested, it’s safe to say they likely conned close to $2.6 billion. There’s a lot more to this story but this is one of the biggest crypto-based scams in history. 

4. Plustoken

Plustoken was a South Korea-based cryptocurrency exchange that operated from 2018-2019. On startup, the company launched an aggressive PR campaign across southeast Asia guaranteeing early investors will be profitable through high interest and dividend payouts. And with the right set of eyes you could probably see that this was structured like a pyramid or ponzi scheme. But investors still clamored for early purchasing of plustokens. After raising billions of dollars, the site throttled withdrawals in 2019 and began transferring huge amounts of various cryptos out of its wallets. All told, the scammers made off with approximately $3 billion dollars worth of various cryptocurrencies. Similar to other scams on this list, this story goes significantly deeper, but it looks like at least one founder has been arrested for this. 

3. Africrypt Exchange

Africrypt was a South Africa-based exchange founded by two young brothers, who were 18 and 21 years old. In April 2021, the company halted withdrawals on account, being vague about a “hack”. Then the website went offline and the two brothers disappeared. A lawsuit alleges that the two brothers made off with $3.6 billion in Bitcoin stolen from investors after running a Ponzi scheme to raise the funds. The brothers disputed the allegations in an interview with the Wall Street Journal, saying that at the height of its trading, the exchange handled at most $200 million, and that the maximum amount lost was about $5 million. South Africa’s financial regulatory agency says it’s unsure if the crime falls under its authority, but labeled the scam a Ponzi Scheme. The two brothers remain missing after fleeing the country with the money. 

2. Thodex

In April 2021, Turkish crypto exchange Thodex posted a vague message about issues the exchange was having in completing transactions. Shortly after trading was halted, founder Faruk Fatih Ozer fled the country, allegedly taking up to $2 billion from nearly 400,000 Thodex investors. Prosecutors have confirmed Ozer transferred at least $30 million out of the exchange. Details are still being resolved, and allegations are still under dispute. 

1. Onecoin

Onecoin holds big conferences around the world promoting it as a great crypto currency to invest in, because the more you invest the more you’ll make in the long run. And so people bought onecoin. A lot of it. And this went on for years and years. The founder and CEO is Ruja Ignatova. But the truth is, Onecoin isn’t even a crypto currency. People paid money and got nothing in return. There’s no way to sell your coins, there’s no block chain, there’s no way to trade it. The only thing you can do is buy it. And over 3 million people buy onecoin over the course of 5 years. Well in 2017 the founder, Ruja Ignatova went missing just after there was a warrant for her arrest. Then in 2019 the site shutdown. We still don’t know where Ruja is or how much Onecoin made during all this. But conservative estimates say they stole at least $4 billion dollars. Some people involved were arrested, and there’s so many more details to this story too.  

To help you avoid being scammed like this, learn what a ponzi scheme is and a pyramid scheme and try to look for signs that an investment might be that. Also be very skeptical of any company claiming they have guaranteed returns from their coin. That’s typically a red flag. Do your own research and don’t trust celebrity endorsements either. 

That is it from today’s post on Top 10 Biggest Exit Scams of All Time. If you do not agree with the points in the post and have some of your own opinions, share them with us in the comments section down below. 

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Chandan is the writer of “Top 10 Biggest Exit Scams of All Time”. Also, Connect with me on Facebook.

Chandan

Hey there! I'm Chandan and I'm from India. I'm a writer and youtuber. You can contact me at: dailykage@gmail.com pinterest

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