Home Business 5 Biggest Cryptocurrency Scams and Arrests of All Time

5 Biggest Cryptocurrency Scams and Arrests of All Time

There is no bulletproof way of transferring money and other assets. Things are the same with cryptocurrencies and blockchain technology. While all exchanges are working hourly on improving their safety and security, misfortunes happen nonetheless. At the same time, why they evolve, and their security increases, hackers all over the world are also honing their skills. Those who worked hard and with intent to harm exchanges and their users managed to gain fortune at other people’s expense. Yes, cryptocurrencies are not as safe as you thought, and many people pulled scams while using them.

In recent times, buying, selling, trading, and above mining of crypto became very popular. Many people seized the opportunity to earn money this way. While the majority of us decided to go the traditional methods, there are always those on the other side of the law. This article is dedicated to them. Let’s talk about the biggest cryptocurrency scams and arrests of all time. You’ll find these fascinating; we do not doubt that.

1. Binance Theft

Source: Dash News

Binance is one of the world’s largest and most successful exchanges. It gained this reputation by being one of the safest and most reliable exchanges out there. Thanks to its reputation, it attracted millions of clients from all over the world. When there are many clients, there ought to be a lot of money. Of course, hackers decided to take advantage of this and steal from both the clients and the company. During 2019 thieves managed to steal approximately $40 million worth of crypto. While this is bad news on its own, it also gets worse. The very talented group of hackers even managed to steal API tokens after breaching the two-factor authentication installed by Binance. While their breach and the sum missing are tremendous for any individual, Binance wasn’t shaken to the ground. At the moment of the theft, $40 million was only 2% of all cryptocurrency tied to this exchange.

2. Mt Gox Hacking

Source: TheNextWeb

Mt. Gox is a precautionary story. One of the first massive lessons the world of crypto had to learn the hard way. The BTC is present in financial markets for more than a decade. But, only a few years ago, it gained the popularity it now holds. Back in the day, it was young; you didn’t have as many exchanges you have today. One of the first ones to greet the light of the day was Mt. Gox. It was created by Jed McCaleb, who later sold it to Mark Karpeles.

Because it was one of the first of its kind, it wasn’t as good as it should have been. Transactions weren’t direct but instead relied on PayPal. But, as there were no other places where you could trade Bitcoin, most people were stuck with Mt. Gox. Back in 2014, more than 70% of all BTC trades occurred on this platform. While most people did it legally, there was a hacker who took advantage of low-level security and was draining Bitcoin. It was on February 7th, 2014, when the first issues became public. Only weeks later, Mt. Gox was no more. At the time, it was believed that 850,000 BTC was stolen. It was later confirmed that the number was closer to 650,000. When this happened, BTC showed its volatile face for the first time – the price dropped from $800 to $400. It was later found that a Russian BTC exchange operator Alexander Vinnik was guilty of this crime as stolen Bitcoins were traced back to him. He was arrested in Greece and later indicted for money laundering and other charges. At one point, even the owner, Mr. Karpeles, was suspected of having something with the missing crypto.

3. BITPoint Hack

Source: Cryptocurrency News

The year 2019 was not a good one for the Japanese cryptocurrency exchange BITpoint. The crypto giant was hacked for $28 million last year. Considering that the first reported amount was closer to $35 million, the things aren’t as bad as they could have been. The day of the theft was reported as of July 12th. The hacker wasn’t quite as the Robin Hood as $19.3 million was stolen from customers while the rest belonged to the exchange. The hackers didn’t focus only on the most valuable crypto Bitcoin but also stole Ether, Litecoin, XRP, and Bitcoin Cash. This event struck hard the company named BITPoint, as they still haven’t fully recovered. Their deposits and withdrawals are suspended. The Japanese exchange giant is adamant that the clients who lost funds are going to be reimbursed, but not in cash.

4. Israeli Brothers Arrest

Source: Wikipedia

Last year, two Israeli brothers were arrested due to a phishing scam. It was a long-time endeavor as they were doing wrong for three years. Their theft was first reported by CipherTrace after the arrest that occurred on June 21st, 2019. Assaf and Eli Gigi stole more than $100 million in cryptocurrency during the three year period. Their scheme was revolving around luring investors through various forums, including massive websites such as Reddit onto their fake crypto exchanges.

5. Bitfinex Loses $73 Million

Source: NewsBTC

Bitfinex is a crypto exchange located in Hong Kong. But, it’s not a transparent one. Many people raise their eyebrows once you start talking about this exchange. The reason is that its founders remain anonymous but are also involved with stablecoin Tether. Both Bitfinex and Tether are subject to many controversies. Many people do not consider it as a safe option as it was already hacked twice. The first hit, back in 2015, wasn’t a big one – a mere $400,000. Two years later, the hackers returned for more and took with them a staggering $73 million.

The hack was made possible due to a technical mistake on Bitfinex end. The proceeds of their transactions had multiple inputs, which left space for a hacker to take advantage of. Because of this breach, the price of BTC went down by 20%. Luckily, this exchange didn’t bail on their customers. All of them were repaid through tokens. Thanks to this move, they still operate after paying a $75,000 fine but are still considered a mystery in their field. If you are still eager to get involved with crypto after reading this, you can use maximusedge-autobot.com as your starting point.

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