The dramatic development of cryptocurrencies has created a lot of opportunities to make money online, but at the same time, has open chances for those who abuse this ‘the breeding ground’, exploit the edges of it for their personal gain. And the clearest evidence is the rampant appearance of scam cryptos.
Recently, we witnessed the sudden soaring of a tiny coin named Omicron, only for having the same name with new COVID 19 variant. Coins like Omicron are called a decentralized treasury-backed currency protocol, known to be often hit by hacks, exploits and so-called rug pulls that see users’ funds stolen. Among those scams spreading like wildfire, there are 3 most standout names.
1. Squid Game token
A crypto inspired by biggest TV Show of 2021, what can be more interesting than that? But then it turn out to be the most widely publicized scam of the year.
From zero jumped to thousand dollar value and then dropped to zero, that’s how we describe the dramatic adventure of Squid Game token in the crypto market.
Squid was billed as a token that could be used for a new online game inspired by a Netflix show. Although it is just a following product of a famous TV Series, its value still increased rapidly, and we could see its name, image all over large and small newspapers.
However, there were problems from the get-go. Aside from its creators having absolutely no authority to use the Squid Game name, people who invested in this token complained right away that they weren’t able to sell what they bought.
Finally, this coin is nothing but a pump and dump scheme that enriches its creators and their buddies, leaving well-meaning retail investors with the losses.
“It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters,” Cornell University economist Eswar Prasad told the BBC.
Corresponding with the explosion of Bitcoin, altcoins seem to be flooding the market with almost 9000 of them being publicly listed as of March 2021. Like Bitcoin, they have their own set of rules, features, and gimmicks.
To attract investors, some altcoins promote their brands associated with community activities. One of those is SaveTheKids ($KIDS). They promised that whenever a token was traded that 1% of the 3% tax on the transaction would be donated to children in need.
With such meaningful message, no wonder why SaveTheKids has lured a large number of users. Moreover, to increase awareness and reputation, SaveTheKids hired popular gamers from FaZe Clan and other social media influencers to tap into their millions of followers, most being minors. Everything sound very potential, except, the whole project was a rug pull. As soon as SaveTheKids went public, it became worthless. Cryptocurrency traders realized a large amount of the crypto that they invested in ended up being pump and dump schemes.
After the fraud was exposed, $KIDS was down more than 150% and the founder of the coin has since abandoned the project, taking all the project’s funds with him.
3. Africrypt scam
Africrypt Proprietary Limited (“Africrypt“), a private company established in 2019, was hacked in April this year and it appears that crypto assets worth an estimated ZAR54 billion were stolen from the various investors’ wallets, controlled by the directors of Africrypt.
However, things became more complicated than that. After going through some investigations, a lot of investors started to point fingers at the Cajees brothers, founders of Africrypt. They claimed that as much as $3.6 billion has been stolen by the Cajees and everything is just a sophisticated scam scheme.
Some cryptocurrency traders whose assets vanished from Africrypt this year are still working on recouping their funds. And the culprits are now missing, along with all of their investors’ cryptocurrencies.