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- 1 Due to the popularity of the Netflix series it was named after, the squid token pumped to over $2,000 even though there was no official announcement of its affiliation with the series.
- 2 The Axie Infinity hack was due to a fake job listing sent to an engineer on the gaming team.
The 5 Top Scams in Crypto History
1) The Squid Token
Like the Netflix series it was named after, only one person won the game. The squid token was a play-to-earn token for the squid game which was an online game launched in 2021. To play, users had to buy the token from decentralized exchanges.
The platform required the ratio of buyers to sellers to be 2:1, meaning that for every 2 buyers, there has to be 1 seller. This process made buying the tokens easier than selling them. To sell the squid token, users had to buy Marbles, a crypto that is earned when playing the game.
Because of the Netflix show it shares its name with, the squid token pumped to over $2,000 after it was launched. Although there was no official announcement of its affiliation with the series, its popularity soared high.
Months later, Twitter flagged the squid token account, the website to the game went offline, and the comment sections of all its social media accounts were disabled. The developers went away with over $2 Million.
2) Thodex Exchange Scam
Thodex was a crypto exchange with over 390,000 active users when it went offline in April 2021. It was the fourth crypto exchange opened in Turkey and was licensed as a money business in 2020.
In March 2021, the exchange announced that they would distribute 150 Dogecoins to every new user between March and April 2021. Four days later, the exchange announced that they were under cyber attack which explained the slow transaction execution. The following day, it suspended trading.
The team stated that this was due to the ongoing partnership agreement with institutional investors and that trading restrictions would be lifted in 4-5 days. While users experienced restrictions on their funds, the founder of the exchange left Turkey with $2 Billion worth of crypto.
3) The Axie Infinity Hack
The Axie Infinity hack was a result of a fake job listing sent to a senior engineer of the Axie Infinity game team. After a series of interviews, a job offer was sent in the form of a PDF. This PDF was corrupted with spyware.
When the engineer opened the PDF on the company’s computer, the hacker had control of four out of nine validator nodes on the Ronin blockchain. This gave them access to the Axie DAO and one more validator node. With this, the hackers transferred 173,600 ETH and USDC which was worth $25 Million, this accounted for over $600 Million.
4) The Pincoin Scam
Pincoin was launched by a Vietnamese company called Modern Tech. Its whitepaper gave no clear information on its founding team but promised investors a 48% return on investment every month. Investors who referred others were promised an 8% commission on every referral.
After the first reward distribution, users were paid in iFan token which was created by the same company for celebrities. This token had little liquidity. In March 2018, the team disappeared with a total of $870 Million which were the funds raised in its initial coin offering.
5) The Bitclub Mining Scam
The Bitclub network was built in 2014 as a company that helped investors acquire shares in Bitcoin mining pools. It also gave bonuses to users who referred others. But in December 2019, it was discovered that the company never ran the mining pools. It told the investors they were investing in a mining pool and had fled with $722 Million in five years.
Conclusion
These scams are an alarming reminder of how dangerous and risky the crypto world can be for people with little to no information. Ergo, it is always recommended to research, analyze, and accommodate enough data before investing in any asset.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
