In this article, we will present takeaways from Xangle’s report which suggests Investors have lost more than $16 Billion since 2012 in 136 Crypto Scams
Cryptocurrency is an exciting asset class, which has recorded phenomenal growth in the past 12 years, The market itself went from $0 to $1.4T as of today’s growth. This growth has attracted all sizes of investors from retails to big corporations. In recent times, Big corporations like Tesla, and America’s Oldest Bank- Bank of New York Mellon invested billions of dollars in Bitcoin, and other big corporations seem to follow their lead in the near future.
Unfortunately, It also attracts thousands of bad actors who use cryptocurrency as a tool to cheat and steal investors out of their capital. The lack of understanding among investors about cryptocurrency is one of the main reason what makes it easier for them to convince people to invest in their fraudulent schemes. Criminals use the hype of lack of regulation infrastructure to take advantage of investors.
Despite the accelerated growth of the crypto market, Scammers have damaged the reputation of the market by luring investors with promises of quick and large returns and then disappearing overnight with investment capital.
But how much harm have scammers brought to investors? How are authorities doing about prosecuting these scammers?
Xangle: One of the Leading Crypto Disclosures Company conducted research on crypto-related investment scams that took place from January 1, 2012, to December 31, 2020.
Their findings are based on media articles, press releases, legal filings, and court documents.
- Investors have lost an estimated $16,149,661,014.00 since 2012.
- Investors lost that much from 136 different scams.
- 527 individuals have faced criminal charges for their roles in crypto-related scams.
- The combined sentences for individuals involved in scams is over 160 years.
- 14 crypto projects have seen their members charged and sentenced to date.
- Of all reported scams, 24 projects or organizations have no known charges — civil or criminal.
Based on XANGLE’s research, $16,149,661,014.00 has been stolen from investors since 2012 across 132 different scams.
The first big scam to rock the world of crypto was the Bitcoin Savings and Trust scam, which started in 2012 and eventually defrauded investors out of 146,000 bitcoin — roughly $97 million dollars at the time of the founder’s initial charges by the SEC in 2013.
Since 2012, 71 projects have suffered criminal charges, amounting to 527 individual arrests. OneCoin, which stole an estimated $4 billion USD from investors, had the highest number of arrests, with 140 individuals being arrested for their roles in the scheme.
- The longer Bad actors stay in the system, they will damage the reputation of the crypto asset class, and slow down mainstream adoption.
- Cybercrime departments should continue to monitor and track crypto-related scams, they should also issue public guidelines for investors to aware of such scams.
- Exchanges and Media Companies working in the Cryptocurrency market should work on educating investors about cryptocurrency, and the technology behind it so they can protect themselves from scammers.
- We need to create, expand, and strengthen crypto regulatory frameworks worldwide to prevent scammers from taking advantage of loopholes with cryptocurrencies while being careful to not discourage the growth of the space.
Education is key to help bring awareness to newcomers.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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