September 19, 2021

The most failed cryptocurrency stories

The most failed cryptocurrency stories

The cryptocurrency control service coinmarketcap provides data on 5,900 digital coins. But on the market there are almost twice as many. 90% of launched cryptocurrencies are of no interest to anyone other than their creators. And only a couple of hundred of them have a chance to live up to their fifth anniversary.

There are a number of reasons why cryptocurrencies do not survive. Most often this is a crooked code, unsuccessful marketing, lack of funding already at the launch stage, or an outright scam.

The appearance of each new token is accompanied byadvertising hype, the power of which depends on the financial capabilities of the representative company. But not every death of a cryptocurrency becomes known to the general public, and not every digital grave comes to grieve admirers.

Today we will remind you of the coins that collapsed with a big scandal and pulled their authors along with them.

OneCoin (ONE)

The token was created in 2014 and became one of thethe first international digital coin scam projects. Its founder, “The Crypto Queen” Ruja Ignatova, has hosted mass events around the world and presented OneCoin as a truly confidential “bitcoin killer”.

But this project positioned itself aseducational course on the basics of trading. An ONE token was created to train participants. It was issued to users who purchase “video lessons”: the more expensive the lesson, the more ONE received on the participant's account. It was possible to convert coins to fiat through the OneCoin project's own crypto-exchange.

Millions of investors have been dragged intothe classic Ponzi scheme (a system in which the payment of profits is carried out at the expense of funds contributed by new participants) and, according to the most conservative estimates, they lost about 4 billion dollars in total.

Ignatova disappeared in the fall of 2017 when the pyramid collapsed and the police issued a warrant for her arrest. Until now, her whereabouts are unknown.

The detention of the creators of the pyramid continued until May 2018, when the last 98 people (except for Ignatova herself) were convicted by the Chinese prosecutor's office.

Separately, we note that the authorities managed to return only $ 1.7 billion to the hapless investors and fine the fraudsters in the amount of $ 2.5 million.

BitConnect (BCC)

The BitConnect token project was launched in December 2016 through ICO and was a typical scammer pyramid.

Its creators offered to earn up to 300%per annum through investments in BCC and promised an interest-free loan for the purchase of a token. The coin reached a record maximum capitalization ($ 2.6 billion) in December 2017 and became one of the most promising for investments according to CoinMarketCap. You could buy a token in the exchanger for $ 460.

The founders of the project proposed a four-tier investment system in which the profit depended on the amount invested.

But just a few months later, its price dropped to 0.

Since the interest paid was funded by new investors, when the platform crashed, people lost everything.

Vitalik was the first to report the fraud.Buterin. He provided calculations, according to which the daily rate of return of 1% is a sign of fraud, since such a profit will bring $ 50 million in 3 years for each thousand invested.

Charlie Lee supported him. He wrote: “If it looks like a duck, walks like a duck and quacks like a duck, then it’s a duck. That is, a pyramid. "

The first regulator to suspect something was wrongbecame the UK Registrar of Companies. He issued an official warning to the media that the company did not have properly issued documents and licenses, and, in the event of bankruptcy, all property and assets would be considered ownerless and subject to transfer to the Crown.

This was followed by warnings from US regulators demanding to close the lending platform and its exchanger.

This caused an avalanche effect and people began to try to withdraw funds in a panic.

The total amount of damage to investors reached $ 5 billion.

Since the names of those who were behind the creation of BitConnect are still not known, the accusations are only brought forward to the promoters who attracted investors to the scheme.

The Last McAfee Token

The cryptocurrency was created in honor of the famousadventurer and libertarian John McAfee. The idea of ​​creating this token belongs to John himself: he announced the release back in the summer of 2018, but circumstances and legal proceedings prevented this from happening.

The creators argued that all the money coming from the sale of McAfee will go to perpetuate the memory of the "pioneer of the cryptoindustry" who committed suicide.

A limited number of coins were launched - 210,000 units. The redemption price of “John's last coin” was 38 cents. Token holders were guaranteed:

• buyback at a bargain price;

• monthly 3% reward to hodlers;

• the right to vote for new projects within the McAfee Defense Fund;

• presence on Blockfolio, CoinmarketCap and Coingecko;

• listing on leading Asian stock exchanges.

The token's life was short-lived:it went on sale on June 28, 2021, reached $ 14.6 within 72 hours and then plummeted to below $ 1. The coin is currently trading at 60 cents, but there are no buyers willing to buy it, and the daily trading volume for the last week is zero.

According to the roadmap, all the money from those soldin the first 7 days, the widow of John McAfee was supposed to receive McAfee tokens - and she received them. Nobody is interested in the further fate of the coin, and the creators are stubbornly silent about listing on stock exchanges.

It can be concluded that this time not John himself, but his inconsolable widow Janice successfully played on the feelings of admirers of her husband's talent, and the coin holders remained at a broken trough.

For those who are just entering the world of digital currencies, we have some disappointing news: there is no surefire way to avoid scams.

Any investment in cryptocurrency is associated with the possibility of loss, and even experienced developers can lose all their savings, succumbing to emotions.

But there are general rules to follow in order to minimize the risks when playing in this volatile market. We talked about them in the article “How to recognize a dummy token”.

Subscribe to ForkNews on Telegram to keep abreast of news from the world of cryptocurrencies