Year in review: biggest cryptocurrency scams of 2019

Total cryptocurrency thefts and scams in 2019 were worth $4.4bn

It's been quite a year for crypto fraud, as criminals develop new, more sophisticated ways to scam the system.

According to a report by CipherTrace, although Q3 showed the lowest number of cryptocurrency thefts and scams in two years, the total number for 2019 was still a whopping $4.4bn (£3.4bn, €4bn).

Here are some of the biggest cryptocurrency scams of 2019.

OneCoin saga continues

OneCoin is probably one of the biggest cryptocurrency scams in history, scamming more $4bn out of investors from all around the globe.

Co-founder Dr Ruja Ignatova has been missing since 2017 but the story is still rarely out of the headlines.

In November, US lawyer Mark S Scott was found guilty of helping OneCoin co-founder Dr Ruja Ignatova launder $400m for a reward of $50m and just this week UK police announced they have dropped the investigation, due to “insufficient evidence”.

UpBit loses more than $50m

South Korea's biggest cryptocurrency exchange, UpBit, lost more than $50m of Ethereum.

The company suspended activities after a message from Lee Seok-woo, CEO of company-owner Dunamu, confirmed that the cyber attack had been successful.

Ethereum owners had their losses covered by the company.

BITPoint hacked for $28m

Japanese cryptocurrency exchange BITPoint was hacked for $28m in July, $19.3m of which was customer funds.

The stolen crypto asset included Bitcoin, XRP, Ether, Litecoin and Bitcoin cash.

BITPoint president, Asahi Shimbun, said they will reimburse all customers affected by the scam but not in cash.


PlusToken was a cryptocurrency Ponzi scheme disguised as a high-yield investment programme. It shut down in June, when fraudsters withdrew over Bitcoin, Ethereum and EOS, and leaving the message “sorry we have run“.

PlusToken was a high-yield investment programme, offering up to 18 per cent monthly returns on investment to unsuspecting victims in China and Korea.

Hackers steal $40m from Binance

Binance, one of the world’s biggest digital money exchanges, had more than $40m in cryptocurrency stolen in May.

Binance traced the cryptocurrency theft to a single wallet after the hackers stole the contents of the company’s Bitcoin hot wallet, taking 7,000 BTC. In addition, the cybercriminals took API keys, two-factor codes and other information in the attack.

Despite the huge haul, Binance said the theft impacted only 2 per cent of its total bitcoin holdings. It used it SAFU (secure asset fund for users) to cover its losses.

More recently, reports in the media said police had raided Binance’s Shanghai offices and shut them down. However, the cryptocurrency exchange said this was fake news.

Brothers arrested for phishing fraud

Two Israeli brothers were arrested on June 21 for a phishing scam that lasted three years. Eli and Assaf Gigi are alleged to have stolen more than $100m in cryptocurrency by luring investors from crypto trading forums such as Reddit on to websites that mimicked major crypto exchanges.

$27m ‘typosquatting’ scam

Six people suspected of a bitcoin scam worth $27m were arrested in June, according to a Europol press release.

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After a 14 month-long joint investigation, authorities arrested five men and one woman at their homes in south-west England as well as in Amsterdam and Rotterdam.

The theft, which targeted users’ Bitcoin tokens, affected at least 4,000 people in 12 countries using "typosquatting". This is where a well-known online cryptocurrency exchange is recreated in order to gain access to victims’ Bitcoin wallets.

Kraken Bitcoin flash crash

An investigation from CipherTrace revealed that the Kraken Bitcoin flash crash was caused by a hacker.

In June, the crypto exchange encountered a flash crash that made the cost of Bitcoin fall abruptly from $8,400 to $75. The cost settled soon after, so many thought it was just a glitch in the framework. However, according to CipherTrace, it was an “ingenious new form of money laundering”. The hacker comprised a whale account and stole 1,200 bitcoin, which was worth more than $10m at the time.

$10m in XRP stolen from GateHub

Hackers made off with around $10m worth of XRP from GateHub users in June. In a statement, the cryptocurrency wallet service said the cybercriminals were able to compromise an estimated 100 XRP Ledger wallets.

“We believe the perpetrator gained unauthorised access to a database holding valid access tokens of our customers. Using these tokens the perpetrator accessed 18,473 encrypted customer accounts, a very small fraction of our total user base,” a statement said.

Bitrue hacked for more than $4m

Singapore exchange Bitrue had $4.2m in user assets stolen in June. Hackers were able to access the Bitru hot wallet and take 9.3m XRP (worth $4m) and 2.5m ADA (worth $231,800) to different exchanges.

According to a company statement on Twitter, the cyber criminals hacked their security system by exploiting "a vulnerability in our Risk Control team's second review process". Bitrue said it will return the lost funds to its users and is revising its security measures.

South Korean Ponzi scheme

The CEO of South Korean cryptocurrency ‘exchange’ CoinUp was sentenced to 16 years in prison for his role in defrauding investors out of 450 billion won ($384m).

Kang-mo and his executives deceived thousands of CoinUp customers by promising to list the coins in the near future, which would see returns of up to 200 per cent.

$30 mln stolen in a Canadian ICO Fraud

A couple from Canada were accused of raising $30m CAD (about $22 million) worth of fiat and cryptocurrency through the sale of a token called FUEL.

Kevin Hobbs and Lisa Cheng, who founded the blockchain services company Vanbex, told investors the token would be usable in a forthcoming smart contract system called Etherparty, and that “the value of the FUEL token would increase dramatically”.

Instead of developing products they used the money for individual use, buying a townhouse in Coal Harbor, two Range Rover SUVs, and going on a multi-million dollar gambling spree.

$1bn Ponzi scheme

In November Taiwanese police arrested 10 people in connection with an alleged Ponzi scheme involving British company is said to have taken hundreds of thousands of dollars from investors across Asia to invest on their behalf, even though it is not licensed to engage in financial transactions.

According to Taiwan News , the company took NT$30bn (US$1bn) from investors across Asia, promising a return of at least 8 per cent per month, by investing in AI technologies.

BitClub Network

Three men were arrested in connection with a cryptocurrency Ponzi scheme that fleeced at least $722m out of investors.

BitClub Network allegedly took money from investors based on fake Bitcoin mining earnings. People were also rewarded for introducing new investors.

FURTHER READING: $239m in cryptos still in the hands of PlusToken scammers

FURTHER READING: Crypto industry clamps down on suspicious activities

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