The crypto domain has unexpectedly stretched its roots into numerous sectors. Moreover, its potential reach is estimated to be better than this. But the risks have also doubled with the increasing opportunities. This is due to the fact that the number of crypto crimes has been rising. Halfway into this year and crypto scams of 2022 have already swiped off millions of dollars.
According to a Federal Trade Commission (FTC) report released on June 3, 2022, the crypto scam fund losses amount to a huge $1 billion since the start of 2021. Isn’t that a huge figure? Moreover, fraudsters and hackers have been utilizing multiple and unique strategies to fill their pockets and wipe away crypto assets from investors.
The crypto domain still has unknown secrets and features that appeal to scammers worldwide. This is why reported losses skyrocketed by 60 times in 2021 as compared to 2018, as huge scams using currencies like the Squid game crypto and Orfan (X) were committed. In addition, over 46,000 people were victims of this cryptocurrency scam frenzy. In 2021, these losses amounted to $680 million and as of June 2022, the figure was $329 million. Further, the median individual reported loss amounted to a huge $2,600.
5 Major Crypto Scams Of 2022
Due to the alarming rate at which such scams are increasing, it is necessary to be aware of such crimes to ensure the security of your assets. Therefore, here is a list of crypto scams of 2022 that resulted in millions of losses in less than 6 months into the year.
Ukraine Scammed Its Donors (For A Good Cause)
The top cryptocurrency scam on our list is not the one that actually was for a negative motive and was aimed at a good cause. But its inclusion was necessary since it is one of its kind and people should know about it. In the month of February this year, just after the Russian invasion of Ukraine, the latter’s government decided to acquire cryptocurrency donations. This move was undertaken to benefit from the vast crypto assets held by the volatile domain’s participants as they are always looking for opportunities to pump the coins they have invested in.
At first, a small but decent amount of such crypto donations were received, however, the situation totally changed when the Ukraine government announced airdrops for those who donated through the Ethereum blockchain. Several donations started flowing in for the incentive of gaining free crypto assets. Within a span of just 2 days over 60,0000 Ethereum-powered transfers were made.
The shocker, however, came when the Ukrainian officials denied conducting any airdrop scheme and the donors felt they were ‘scammed’. However, in the actual scenario, the government tried to fundraise to meet the emergency requisites. So, it can be added in the limited edition list of good crypto scams of 2022, right?
Day Of Defeat: Wiped off $1.35 Million
In the crypto domain, the price actions are definitely unpredictable, however, unprecedented gains and skyrocketing performances are what attract an investor. This is what these Day of Defeat scammers harnessed. It was a trap with red flags everywhere but still managed to make over $1 million. The Day of Defeat crypto promised to surge by about 10,000,000 times in a day, sounds unbelievable right? This was done to investors around the world. But still, thousands of crypto participants were ignorant and gambled away their possessions.
It was defined as a radical social experiment by its developers that was programmed mathematically to ensure 10,000,000X price gains to its holders. Further, they also announced that a “Mystery plan” would be out next year that would cause the token’s price to gain an additional 1,000,000 times. The developers answered an FAQ on their website saying they would never redeem the pool of funds invested. However, they did just the opposite. Once they acquired $1.35 million as investments, they rug pulled the entire pool and fled. Thus, causing a huge loss to the entire community who trusted them.
Axie Infinity: Stayed Ignorant To The Scam
Axie Infinity, the metaverse forerunner, experienced a huge blow when it was hacked this year. And Woohoo! $615 million gone. Sky Mavis, the company that founded this popular crypto game, did not realize that over $600 million in funds were swiped away while they were just having a ‘normal’ day. In March 2022, the hackers got hold of a loophole in the Ethereum-based sidechain, the Ronin blockchain, on which the Axie Infinity infrastructure runs.
A few months before that, in December 2021, Sky Mavis mentioned that there were security issues on the platform that would be fixed shortly. They were talking about the same shortcoming these hackers took advantage of since they could not fix it in time.
Even hours later of the misdeed being performed, the company could not know that millions of dollars had been lost. They could know of this mishap only when a user tried withdrawing funds and failed in doing so due to lack of liquidity. All users of this play-to-earn crypto platform were disappointed as withdrawals had been suspended for a considerable amount of time. Axie Infinity then initiated a fundraising scheme and acquired $125 million to compensate these dissatisfied users for the stolen funds.
Seth Green’s Bored Ape Swiped
The crypto domain has given rise to another investment opportunity which is the NFT marketplace. Therefore, this subdomain has its own risks and dangers that recently affected actor Seth Green as he lost access to all his Bored Ape investments. It was a phishing scam that drained his entire NFT possessions. His losses were mainly from Bored Ape Yacht Club #8398, and the other NFT project by the same creators, two Mutant Apes. Apart from these, his Doodle NFT investments were also stolen.
Green lost over hundred of thousands of dollars that could be earned through the resale of those NFTs. In addition, his rights against Bored Ape #8398, which he named Fred Simian, were also forfeited since the one who stole it immediately sold it to a collector. Therefore, the comedy film by this actor, White House Tavern, which would feature Simian as the star among other NFT participants was also affected.
BBC Promoted A Crypto Scammer (Beyond Belief!)
BBC, the popular media network, was also not spared by crypto scammers. This is the funniest yet unforeseeable crypto scam of 2022 listed here. The media giant caught hold of an alleged crypto fraudster who went from rags to riches in a relatively small period of time. Little did the reporters know what he did to get there. In February 2022, BBC featured an article surrounding a Birmingham-based crypto investor, Hanad Hassan. The report talked about how the person made a small investment of £50 in the crypto market last year and made a profit of millions.
After the article was out, thousands of people took to social media and alleged that Hassan had committed several cryptocurrency scams to reach where he was at that time. Then the entire cryptocurrency fraud came into the spotlight. In April last year, the alleged scammer launched a crypto named Orfano that was defined as a “charity token” that was supposed to help in charity by keeping aside 3% of the acquired crypto investments. However, this was just a promotional strategy to lure investors so that they consider their investments to be doing good to the community.
After a few months, the crypto ceased operating and took all crypto funds with it as there was no way to withdraw them back. Several months later, Hassan repeated the tactic and introduced OrfanX rebranding the former token and doing the same scam, thus wiping off millions of crypto funds. In addition, he also had the audacity to scam BBC into promoting him and registered his deed in our list of crypto scams of 2022. This web of scams makes him really a pro scammer, right?
All popular crypto scams of 2022 so far have their own distinct identity. Moreover, the fact that almost none of them were identified earlier makes it clear that the crypto domain is getting even riskier. Therefore, it is advised to be extremely cautious before venturing out into this volatile market.
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