In the past week, reports emerged that some key members of the Onecoin scam were found dead in Mexico.
According to reports, the two Oscar Brito Ibarra and Ignacio Ibarra may have been kidnapped and murdered but the motives behind their murder is unclear.
Onecoin is one of the biggest cryptocurrency Ponzi schemes that creamed off billions from victims even as reports emerged that it was a scam. News.Bitcoin.com has extensively covered the story of Onecoin.
While increasing awareness about cryptocurrencies helps to reduce the chances of people falling for scams, it seems this alone may not be enough.
Sophisticated criminals are still able to package scams that will deceive even the smartest investors or individuals that should “know better.”
Besides Onecoin, there a few more crypto scams that took billions from victims. This article looks at some of the biggest crypto Ponzi schemes and how they lured millions without getting caught.
Billion-dollar crypto scams
In 2019 authorities in China apprehended individuals behind Plus Token as they took down one of the biggest crypto Ponzi schemes seen in Asia yet. Reports in the Chinese media suggest Plus Token promoters may have defrauded as much as $3 billion from unsuspecting investors.
A blockchain analysis firm, Chainalysis corroborates the media reports although it settles for $2 billion as the total amount stolen. Chainalysis claims it tracked a total of about 180,000 bitcoin, 6,400,000 ethereum, 111,000 tether and 53 omisego.
Either figure still makes Plus Token one of the biggest crypto scam to date. Although the Ponzi outfit exit scammed, some the stolen funds are still stationed in wallets associated with the scheme, presumably waiting to be cashed out.
In June, reports surfaced that funds associated with Plus Token were moving to exchanges.
Another billion-dollar scam that stole funds from investors is Bitconnect. It is said that in just over a year, the scam had managed to propel itself from an obscure ICO to a crypto project valued at $2.6 billion.
Despite this, Bitconnect still had content with the ignominy of being labeled a scam even at its heyday. Still, promoters undeterred went on to create a media platform to counter negative stories that were circulating.
Finally, after facing relentless media scrutiny as well as growing pressure from regulators, Bitconnect abruptly shut down in January 2018. It blamed the “bad press” for its troubles. Investors lost savings.
Common methods used by scammers
The three billion dollar scams used methods commonly employed by typical large scale Ponzi schemes. Firstly, criminals prey on two inherent human flaws, greed, and lust for “easy” money.
For example, Bitconnect managed to keep new investors coming on board because it promised a rate of return of 0.25% per day.
While this promise might look surreal, it is also true that investors like “passive incomes” that reward with a high return on equity. Many did join and became affiliates of…