TOP 5 Cryptocurrency Scams in 2023. 2023 has been really unkind to web3… | by NEFTURE SECURITY I Blockchain Security | Coins | January 2024
The most notable cryptocurrency crime-related incident in December was undoubtedly the revelation of a cryptocurrency Ponzi scheme called Hyperverse, involving at least $1.3 billion.
Provided by HyperVerse/HyperFund operated by Sam Lee and Zijing “Ryan” Xu in Australia from 2018 to mid-2023 Daily returns of 0.5% to up to 300% within 600 days through membership plan.
Cryptocurrency mining operations that did not exist have become highly profitable.
Over the years, tens of thousands of victims collectively “invested” in this Ponzi, resulting in $1.3 billion in losses, according to Chainanalytic.
This fraudulent scheme, which required the involvement of friends and family to facilitate the Ponzi scheme, morphed into both. interpersonal tragedy and financial disaster For the victims.
Several countries have issued notices alleging that the Hyperverse project is a pyramid scheme, but unfortunately this information has not reached victims.
Sam Lee, Australia’s self-proclaimed “Bitcoin Crown Prince”, and Ryan Xu, who claims to be “one of China’s four Bitcoin kings”, were already behind the bankrupt company that owed creditors $58 million in 2019 .
The scariest part?
Sam Lee is involved in executing other cryptocurrency initiatives. StableDao and we are all SatoshiThe California Department of Financial Protection and Innovation called it a “fraudulent pyramid and Ponzi scheme.”
Pig slaughter is a sophisticated scam that uses complex psychological manipulation tactics and operates through cyber slavery.
In 2023, the Department of Justice caught the fraudsters in two cases (1 and 2) and uncovered a $305 million heist. Although this figure may seem significant, it is likely to be far less than the amount actually stolen from victims, as pig slaughter is considered a multi-billion dollar per year fraudulent industry.
Last year we provided a thorough analysis of the origins of this case and the tactics used to force victims to withdraw their funds.
As many as 100,000 investors were reportedly defrauded by Korvio Coin, an Indian cryptocurrency Ponzi scheme.
Four of the nine main perpetrators were police officers and successfully persuaded more than 1,000 Himachal police officers to invest in the tokens with baseless promises that the tokens would soar and provide quick and high returns.
The thousands of police officers involved in the Ponzi scheme played a key role in building the credibility of the scam, and also contributed to its enormous success by persuading thousands of government officials to participate as well.
Certainly, police officers have become the most vocal advocates of the “voluntary retirement system”.
This classic fraudulent get-rich-quick scheme operated as a multi-level marketing structure, rewarding investors who recruited family, friends, and co-workers into the scheme.
It features fake websites that trick victims into believing that Korvio coins are being traded like any other cryptocurrency.
Currently, Subhash Sharma, who is at the center of the scam, is still on the run.
SafeMoon’s closure was long overdue, many said.
At its peak on April 20, 2021, SafeMoon boasted a market cap cryptocurrency of $5.7 billion.
However, its heyday was short-lived, as it was later revealed that a significant portion of SafeMoon’s liquidity pools were never locked up, and management was accused of accessing users’ funds and using them to promote a lavish lifestyle.
SafeMoon’s fraud has been widely known since 2021.
High-profile cryptocurrency detective Coffeezilla has conducted numerous investigative videos covering SafeMoon’s all-time high on April 25, 2021, exactly five days after it.
In the video, he revealed the full extent of the scam and the technology used to make it possible.
For two and a half years, the entire cryptocurrency community (excluding SafeMoon investors) has been anxiously waiting for the ax to fall on SafeMoon executives and put an end to a fraudulent project that has been going on for far too long.
On November 1, 2023, their prayers were finally answered when the Securities and Exchange Commission (SEC) charged SafeMoon executives Kyle Nagy, CEO John Karony, CTO Thomas Smith, and SafeMoon LLC with running a ‘massive fraud scheme’ . ”
This is a scheme that could secretly take more than $200 million in cryptocurrency assets from users to pay for personal luxuries, including travel jackpots, McLaren cars, and multi-million dollar homes.
The U.S. Attorney’s Office for the Eastern District of New York followed suit, charging three executives with similar criminal charges, including conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to launder money.
The community celebrated the SEC’s action that (once) finally put a stop to SafeMoon’s long-running fraud!
JPEX, a once prestigious Hong Kong cryptocurrency company, suffered a shocking collapse in September 2023.
On September 13, the SFC, Hong Kong’s equivalent of the SEC, issued a consumer alert alleging that JPEX was operating without proper licensing and using dubious practices.
A few days later, JPEX raised withdrawal fees to $999 while also limiting withdrawals to $1,000, loudly asserting that “the platform will not collapse.” Users were virtually unable to withdraw.
JPEX has stopped communicating.
On September 25, police received more than 2,200 complaints from JPEX users, explicitly accusing JPEX of at least $191 million in financial fraud.
JPEX was accused of falsely advertising high returns of up to 20% APY on various staking products in order to attract numerous victims.
JPEX then implemented restrictions on withdrawal limits and raised withdrawal processing fees so high that users were unable to access their funds without risking most losses.
As of December 2023, there are 2,623 people who have become victims of JPEX. Of this, a whopping HK$1.6 billion (~$305 million) was lost.
Sixty-six people were arrested, including social media influencers Joseph Lam and Chan Ye, who were seen as key in building JPEX’s reputation and influence.
Anecdotally, one of the suspects at JPEX was literally caught shredding and bleaching files.