7 Crypto Scams that Actually Happened

The year 2022 was harsh for crypto investors and the industry overall. The reaction of the crypto market to the implosion of the FTX exchange and the crush of Terra’s UST algorithmic stablecoin didn’t make us wait. The total market capitalization of crypto assets dramatically dropped in 2022, making a lot of investors cash out their assets and refuse to invest in cryptocurrency. Crypto scams 2022 – 2023 only added to the general tendency, making potential investors doubt their initial intentions and refuse to put their money into crypto. Today we’ll tell you about some of the most resonating crypto scams that actually happened within this crypto year.

What Are Crypto Scams? Types of Cryptocurrency Scams

Any attempt to get unauthorized access to another person’s or company’s crypto assets is qualified as a crypto scam. This may involve hacking their security codes and private data as well as deceiving crypto owners to send their assets to compromised digital wallets. Overall, crypto scams can be split into two types: • Scams that don’t require personal contact with the victim. Here belong hacking or stealing security codes, credentials for authentication with the digital wallet, or getting access to hardware. • Scams that require some personal interaction. This category includes fraudulent investment offers, impersonated demand for crypto assets from the victim, business offers that are scams, and similar schemes. The cryptocurrency scam news spread really fast now, so there’s always a chance to avoid getting into malicious schemes by learning about the most famous crypto scams and understanding how to differentiate between real business proposals and those aiming to steal your investments. We’ve compiled a list of the seven most spoken-about cryptocurrency scams that actually happened in 2022 – 2023.

The Tumbling Down of Celsius

The situation that happened in May 2022 became a huge blow to the entire crypto market. The stablecoin Terra and crypto token Luna failed, revealing one of the most famous cryptocurrency scams of 2022. The Vermont Department of Financial Regulation said this was nothing else than a financial pyramid where payments for the early investors were made with funds received from those who joined later. This scheme is as old as the world, and in the aftermath, many critics said that such an outcome was predictable due to the ridiculously high yields promised to the investors. Anyway, Celsius filed for bankruptcy and still owes 4.7 billion US dollars to its investors.

Normad Bridge Hack

In August 2022, another scandal with the crypto bridge became known to the world. Hacking a crypto bridge is no news in the world of crypto exchange. These structures have some vulnerabilities that scammers use to their benefit. The total amount stolen from this hack was $100,000,000. Yet that was only the beginning of the story. It has become one of the best-known crypto scams of the year due to the platform’s users looting the bridge themselves once the exploit got to the public ears. So the total investment loss in this scam reached $186 million. Such stories are one of the reasons to use reliable and well-secured crypto swap platforms like Exolix.

The Big Steal from Axie Infinity

The users of a popular play-to-earn game “Avie Infinity” lost their crypto assets due to a cheeky hack in March of 2022. What’s worse, the Sky Mavis company owning the title didn’t know about the problem. The total amount stolen from game users reached $615 million, thus becoming one of the largest crypto amounts stolen due to a hack that year. While the game runs on one of the Ethereum-based sidechains, the breach wasn’t the fault of the Ronin blockchain. In fact, it’s Sky Mavis that lowered the security protocols in December 2021 and left things easy to get for scammers. The company promised to reimburse the financial losses to its clients, yet there’s no sign of it coming soon.

Collapse of FTX Crypto Exchange

One of the latest cryptocurrency scams also became one of the most dramatic crypto investors’ financial losses. The collapse of the crypto exchange service FTX resulted in a $1 – 2 billion dollar loss for its investors. This happened in early November of 2022 after a report by CoinDeck concerning the leverage and solvency of the Almeda Research firm affiliated with FTX. Once the problem began, the FTX company CEO tried to find bailout funds, and Binance stepped in to buy some portions but eventually backed out. Within some days, the CEO of the company filed for bankruptcy following the Bahamas freezing their subsidiary’s assets. If not enough, a hack stole another $477 million from FTX investors, finalizing one of the biggest crypto scams of all time.

Warmhole Bridge Hack

While the number of financial losses for crypto owners is less significant than in the previous story, the Wormhole bridge hack still entered the history of 2022. The story of this scam only proves the vulnerability of cryptocurrency bridges and the proficiency of scammers in hacking them. The thieves stole $325 million, and the crypto bridge had to temporarily shut down to stop the exploit. However, this didn’t help them return the stolen digital assets.

Beanstalk Becomes a Victim of a Flash Loan Attack

A flash loan attack on Beanstalk resulted in the attacker draining $182 million from the project. Unlike typical cyberattacks that aim to create exploits, Beanstalk became subject to breaking the protocol’s governance mechanism by an unknown threat actor who got the voting rights required for transferring crypto assets from liquidity pools. Eventually, this has become the most famous DeFi project attack of the year.

Wintermute Hacker Steals Private Keys of the Users

Wintermute cryptocurrency market became one of the victims of a series of hacks in the summer and autumn of 2022. By compromising the tool for creating the custom wallet addresses, the scammer managed to get the private keys of Wintermute users and drain the funds from their accounts. The total stolen amount reached $160 million.

Bottom Line

While the latest crypto scams don’t bring a lot of optimism to novice crypto investors, they shouldn’t stop you from putting your assets in cryptocurrency. Just be cautious and get involved with reliable and trustworthy services only.