History of Crypto Scams and How to Avoid Them

The journey of cryptocurrencies and blockchain technology has been marked by innovation, financial opportunity, and unfortunately, a persistent stream of scams and hacks. Understanding this turbulent history is essential for anyone seeking to navigate the crypto space safely and with confidence.

The Biggest Crypto Scams in History

Cryptocurrency scams have taken many forms, from Ponzi schemes to exchange collapses and large-scale hacks. These incidents have led to losses of billions of dollars and have served as critical lessons for regulators, developers, and investors.

OneCoin: The $4 Billion Ponzi Scheme

Launched in 2014 by Ruja Ignatova — infamously dubbed the "Cryptoqueen" — OneCoin promoted itself as a revolutionary digital currency. In reality, there was no blockchain or verifiable ledger. Instead, OneCoin operated as a classic Ponzi scheme, drawing in investors from more than 175 countries. Over $4 billion was defrauded before Ignatova disappeared in 2017, making it one of the largest and most notorious scams in crypto history. The case remains a powerful warning about investing in opaque projects without independently auditable technology. For more on this case and its fallout, see this detailed breakdown of the OneCoin scam.

PlusToken: The High-Yield Wallet Ponzi

Operating primarily in China and East Asia, the PlusToken scam attracted millions by promising returns of up to 30% through a supposed high-yield wallet service. In reality, funds from new users were used to pay earlier participants in a classic Ponzi structure. In 2019, the operators vanished with more than $2 billion in stolen assets, including over 180,000 BTC and 6 million ETH. PlusToken's collapse prompted a renewed crackdown on illicit crypto activity in China and highlighted the importance of robust anti-money laundering (AML) practices. Read more from this report on PlusToken's global regulatory impact.

Mt. Gox: Exchange Collapse and Stolen Bitcoin

Once the largest Bitcoin exchange, handling over 70% of all BTC transactions, Mt. Gox suffered repeated hacks between 2011 and 2014. By the time it filed for bankruptcy in 2014, an estimated 850,000 BTC were missing — valued at around $450 million then, and tens of billions today. Subsequent investigations recovered about 200,000 BTC, but the debacle underscored the inherent risks of centralized custodianship and inadequate security protocols. You can find a comprehensive timeline and technical analysis in this overview of major crypto hacks.

FTX: A Modern Cautionary Tale

The 2022 collapse of FTX, previously a leading centralized exchange, is a stark reminder that even large and seemingly reputable players are not immune to risk. Following gross mismanagement and fraudulent activities, FTX declared bankruptcy, with over $8.9 billion of customer assets lost. In the chaos, an additional $477 million was drained in what appears to be an insider hack. The fallout has led to major regulatory scrutiny and the imprisonment of key executives, with ongoing efforts to recover victim funds. Learn more about the aftermath in this authoritative summary of the FTX case.

Common Scam Techniques

While the specifics of each scam vary, there are recurring patterns:

• Ponzi and pyramid schemes: Promising high or guaranteed returns, often involving referral incentives and opaque investment strategies.
• Phishing and social engineering: Trick users into revealing private keys, seed phrases, or passwords via fake websites, emails, or social media impersonation.
• Fake wallets and malicious software: Distribute crypto wallets or apps laced with malware, allowing attackers to steal funds once users deposit assets.
• Exit scams and rug pulls: Project creators suddenly vanish after raising funds, often in decentralized finance (DeFi) or NFT launches.
• Exchange and protocol hacks: Exploit technical vulnerabilities in centralized and decentralized platforms, resulting in large-scale asset theft.

For a more exhaustive review of scam types and examples, consult this industry analysis of crypto crime.

Key Lessons and Security Practices

1. Due Diligence
Always research any project, company, or wallet service before investing. Look for open-source code, verifiable audits, named teams, and a clear use case.

2. Never Trust, Always Verify
No legitimate service will ever ask for your private key or recovery phrase. Use caution with unsolicited communications and verify URLs before entering sensitive information.

3. Cold Storage for Large Funds
For substantial crypto holdings, hardware wallets offer significantly greater security than keeping assets on exchanges or online wallets. By storing private keys offline, users minimize exposure to remote hacking attempts.

4. Stay Informed
The threat landscape continuously evolves. Follow reputable sources such as Chainalysis or Cointelegraph for the latest news on scams, attacks, and security best practices.

5. Regulatory Awareness
Regulatory responses to crypto crimes are increasing globally. Keeping abreast of changes in your jurisdiction can help ensure compliance and spot warning signs of fraudulent operations.

Why Secure Self-Custody Matters

These cases consistently show the dangers of centralization and the critical importance of individual security. Storing assets on exchanges, trusting unverifiable projects, or failing to practice good digital hygiene exposes users to unnecessary risk.

OneKey hardware wallets are designed to empower users with true self-custody. By keeping your private keys offline, OneKey dramatically reduces the attack surface for hackers and makes phishing or malware-based theft virtually impossible. Whether you are an investor, trader, or enthusiast, incorporating a hardware wallet into your security routine is a proven way to protect your crypto assets.

Taking personal responsibility for your security is the most effective defense against the ever-evolving world of crypto scams and fraud. By learning from history and using tools like OneKey, you can confidently participate in the blockchain revolution—safely and securely.