The Worst Cryptocurrency Frauds Of 2022 (so far)

The Worst Cryptocurrency Frauds Of 2022 (so far)

Only six months into 2022, and there have already been billions of dollars’ worth of cryptocurrencies stolen and plunder.

Even though the amount of stolen cryptocurrency is astonishing, not everything is only about the money. Mashable examined the worst cryptocurrency frauds of 2021 last year. Yes, a significant amount of money was being laundered through the numerous schemes and scams on that list. However, occasionally the daring and originality of some of these hacks and scams—perpetrated by individuals who only escape with six figures’ worth of stolen cryptocurrency—are noteworthy.

So without further ado, here are some of the largest and most audacious cryptocurrency frauds, swindles, and rackets from 2022 to date.

1. Donors are drawn to Ukraine (with good reason!)

When the Ukrainian government swept its contributors under the rug, one of these schemes stood out from the rest. It must be included nonetheless because it is a very exceptional scam—a rare “excellent” scam.

The Ukrainian government swiftly decided to accept donations in the form of cryptocurrencies in February 2022, just after Russia invaded Ukraine, in order to capitalise on the large players in the cryptocurrency sector who are constantly attempting to pump their coins and garner positive headlines.

While there were initially a respectable number of donations, the cryptocurrency only really began to stream in once Ukraine announced an airdrop to individuals who made donations through the Ethereum network. In essence, an airdrop is when recipients of crypto wallets receive free gifts, typically in the form of crypto tokens or NFTs. According to Ukraine, this amounted to providing contributors a “reward” for their contributions.

the actors acting in bad faith. To take advantage of the airdrop, people began sending massive amounts of cryptocurrency donations to Ukraine. On the Ethereum blockchain, more over 60,000 transactions were made to Ukraine in less than two days. According to Ukrainian officials, people began sending extremely small quantities of money only to register in time for the airdrop. These people supposedly wanted to take advantage of a nation at war by receiving a “prize” that was worth more than what they had donated in order to sell the freebie for a profit.

Just days after it was announced, Ukraine decided to scrap the airdrop. Some contributors who were seeking those gains yelled “scam” in response. And this qualifies as a rug pull, technically. A rug pull occurs when a cryptocurrency developer pledges to raise money, abandons the project, and then walks away with all the cash.

But this is a very exceptional circumstance. When Ukraine learned that people were trying to take advantage of the situation, they stopped their fundraising efforts and decided they would thank the well-intentioned donations. However, the funds still went to a good purpose. So let’s finally refer to this as a rug pull. It is at the top of the list because of this.

2. $615 million was taken from Axie Infinity in a hack

If someone stole $615 million from you, would you suspect anything? Certainly not Sky Mavis, the developer of the most well-known cryptocurrency game, Axie Infinity!

On the Ronin blockchain, the Ethereum-based sidechain that powers Axie Infinity, hackers found a vulnerability in March. To make matters worse, Sky Mavis’s update in December that decreased security protocols led to the vulnerability, which was intended to be a temporary change. Just a few months later, the hackers were able to exploit the scenario because nothing was reversed.

How did Sky Mavis eventually learn that hundreds of millions of dollars were missing? A user attempted to withdraw money but was unsuccessful because there was no longer any liquidity.

Axie Infinity is a play-to-earn cryptocurrency game that needs players to buy pricey NFTs in order to participate. They can then use those NFTs to play the game and earn real money in the form of cryptocurrency. However, because NFTs are so expensive, users who can’t buy them frequently end up in exploitative “scholarships” that force them to share the rewards with other players who lend them the expensive NFTs needed to play.

However, play-to-earn games like Axie Infinity have gained popularity in nations like the Philippines because players can make money that is comparable to the typical salary there. Unfortunately, those individuals learned that the attack prevented them from accessing their earnings.

Since then, Axie Infinity has raised $125 million to compensate its users for money that was stolen. That’s still a lot less than the $625 million they lost, though. They’re probably never going to get that money back. According to the U.S. authorities, a North Korean-based organisation was responsible for the hack.

3. Red flags all around on the Day of Defeat

Do you think an investment that guarantees a price increase of 10,000,000 times seems too good to be true? My zero key did not become stuck, though. The Day of Defeat token delivered on its promise exactly. And many others joined in.

Web3 Is Going Great, a website that chronicles all of the scams and gimmicks in the area everyday, was founded by Molly White. She recommended Day of Defeat to me when I contacted her to see what cryptocurrency scams had caught her attention so far this year. One of the projects, according to her, had “some of the largest red flags I’ve ever seen.” She has also seen a lot.

Day of Defeat’s creators described the initiative as a “bold social experiment” that was “mathematically calculated to offer holders a 10,000,000X PRICE INCREASE.” Additionally, they promoted a “Mystery Plan” (come on!) that would be implemented in June of the next year and would cause a further 1,000,000 increase in the token’s price. They responded to a query about their access to the financial pool in a FAQ on the Day of the Defeat website, stating that they would “promise” not to redeem the funds. A pledge!

Guess what, though? They seem to have broken their word on that. The project’s project rug was pulled in May after $1.35 million was taken out, which in in a more than 96 percent decline in the token’s value. As Molly noted, it’s doubtful that anyone who stole the $1.35 million did not receive the incredible returns that were promised. If so, they would have needed to invest less than 14 cents.

4. The BBC was duped into endorsing a purported crypto fraudster

Everyone enjoys a good “rags to riches” tale. Evidently, the BBC was so enamoured with this story that they neglected to conduct a thorough investigation into the person who used cryptocurrency scams to go from living in rags to riches.

Hanad Hassan, a local cryptocurrency investor from Birmingham, was featured in a February piece by the BBC. According to the article, Hassan invested £50 in cryptocurrency last year and managed to transform it into millions! Not only that. The report also discussed Hassan’s desire to use his newfound money to assist members of the neighbourhood.

Hassan introduced Orfano, a “donation token,” in April 2021. In addition to being a cryptocurrency investment, it would reserve 3% of the proceeds to aid charitable endeavours. This is a typical strategy used in cryptocurrency scams to trick investors into thinking they’re making wise financial decisions. A few months later, Orfano abruptly folded, taking all of the investors’ money with them. Users had no access to their money and couldn’t withdraw any of it.

A month later, Hassan changed the name of Orfano to OrfanoX and once more treated new investors in this token unfairly. And the BBC was about to announce his “good luck” now!

The scenario is so absurd that it was one of the first that cryptocurrency critic and author of “Attack of the 50 Foot Blockchain,” David Gerard, suggested to me. The crypto fraudster Hanad Hassan was the subject of a 30-minute documentary by the BBC titled We Are England: Birmingham’s Self-Made Crypto-Millionaire, according to Gerard. The BBC also released a “puff piece” about him. Only a few hours before it was intended to air in February, the scheduled airing was cancelled.

While Hassan’s cryptocurrency fraud occurred in 2021, he deceived the BBC only this year. They were essentially conned into believing his story. a fraud within inside a fraud. Scamception!

5. Bored Ape stolen from Seth Green

Apes owned by actor Seth Green were taken. As a result of Green falling for a phishing scam in May, the inventor of Robot Chicken had his whole NFT collection taken from him. Green lost his Bored Ape Yacht Club #8398, two Mutant Apes, a different NFT creation by the Bored Ape Yacht Club’s designers Yuga Labs, as well as a Doodle NFT.

However, as you can see, Green suffered losses that went beyond the anticipated hundreds of thousands of dollars in NFT resale value. The actor has been collaborating on the humorous series White Horse Tavern, which includes a number of NFT characters. But Bored Ape #8398, also known as Fred Simian by Green, is the series’ star.

Owners of Bored Apes have an IP licence for their specific apes and are free to do whatever they want with them, like sell merchandise, make video games, and even develop sitcoms. And for Green, that posed a problem. He didn’t have his ape; whomever took it sold his Bored Ape to a collector on the black market, which meant Seth Green no longer had the rights to Fred Simian.

But fortunately for Green, he recently managed to get his Bored Ape back… for $297,000. That’s accurate. He spent six figures on his Bored Ape twice to purchase it.

NFTs are frequently stolen, you might be thinking if you’re familiar with the non-fungible token ecosystem. Hell, just this month, Yuga Labs’ social media accounts were hacked, costing owners of Bored Ape more money than Seth Green.

Why then concentrate on Green’s case? Another NFT-related fraud that exposes the industry’s many faults is not coming to mind at the moment. A celebrity’s NFTs and intellectual property were stolen in a cryptocurrency fraud, and they were at a loss as to what to do. They were ultimately forced to settle for simply purchasing their stolen goods back. If this occurs to you as well, what will you do about it?

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