Crypto’s biggest scams of all time

Update: Since publishing, there has obviously been a crypto scam to top them all. Read how the FTX fallout is shaping our world, and our CEO’s spicy piece, It’s time to be honest about DeFi.

Today we’re looking at crypto scams.

Market conditions are rough, and you’ve probably felt some of the sting lately. (Heck, we all are.) But as bad as it stings to lose money on a sound investment, that feeling is nothing compared to the sheer devastation of falling for a scam.

Look, it’s a sad fact that the crypto and NFT space is absolutely littered with scammers. Last November, we showed you how to spot NFT red flags. Hopefully you’ve heeded our advice and avoided trouble.

But the hits keep on coming. In the past few weeks, we’ve seen the Azuki scandal, another bored ape stolen from Seth Green, and the OpenSea employee accused of front-running site promotions. The last one is particularly important, as it marks the world’s first case of NFT insider trading.

The SEC is starting to take action while the scams are getting bolder. So enjoy a little Sunday school lesson in digital con artistry (and maybe a tiny bit of schadenfreude) as we highlight the 11 biggest crypto scams and NFT rug pulls of all time.

Let’s go 👇

1) OneCoin ($4 billion scammed)

OneCoin is arguably the biggest crypto scam of all time.

Propped up alongside thousands of other altcoins, OneCoin was founded in 2014 by Dr. Ruja Ignatova, a Ph.D. in private international law, and her husband, Daniel Dabek.

Ignatova spoke at sold-out venues, including Webley Arena (Europe’s 2nd largest stadium!) promoting OneCoin as a “bitcoin killer.” The OneCoin community started developing a cult-like reputation.

But here’s the thing – OneCoin was not a cryptocurrency at all. It was a multi-level marketing scheme.

OneCoin sold educational packets about financial education that entitled owners to mine OneCoin. These packets cost anywhere from $100 to $100,000, with different membership levels letting buyers buy greater amounts of the token.

On top of that, OneCoin wasn’t recorded on the blockchain, so there was no mining. Instead, OneCoin was created on the SQL programming language, so unlike a secure, decentralized blockchain, the code could be altered without record (which defeats the entire purpose).

Lastly, OneCoin could only be traded on an internal “marketplace.” This marketplace was constantly under construction, capped what traders could sell, and made it convoluted to exchange OneCoin for Euros.

Dr. Ruja Ignatova, dubbed the “Cryptoqueen.”

By 2017, OneCoin had 3 million members. However, law enforcement agencies across the globe were onto the scheme. In some countries, OneCoin organizers were arrested for fraud, and in 2019, the main website was shut down.

In late 2017, Ignatova boarded a flight out of Sofia, Bulgaria, to Athens, Greece, with $4 billion of investors’ cash in her virtual pocket. She hasn’t been seen since.

Incredibly, OneCoin is still in business today!

2) Thodex ($2 billion scammed)

Thodex was a Turkish crypto exchange launched in 2017 by Faruk Fatih Özer.

In April 2021, bitcoin hit its all-time high of $62k per coin. That same month, Thodex shut down, citing an emergency “6-hour maintenance period.” The shutdown extended five days, and then Thodex shut down the platform completely.

Özer immediately fled Turkey and never returned. He took over $2 billion from over 100k investors. It became clear that Özer was using the money for personal use, and over 60 arrests were made in the ensuing months. But his whereabouts remain unknown to this day.

If Özer is ever caught, he will face a 40,000-year prison sentence for financial fraud under the Turkish legal code.

Özer’s got his fingers crossed! Perhaps he’s living somewhere on Crypto Island.

3) Save the Kids ($30k scammed)

This one isn’t huge, but it’s disappointing.

Save the Kids ($KIDS) was a classic pump-and-dump altcoin project notable for two reasons:

  1. The members of an esports team, FaZe Clan, used to promote the coin, and
  2. It promised to donate 1% of all transactions to children’s charities.

FaZe Clan has 26.2 million followers across Instagram, YouTube, and Twitter. The esports team was the first ever to grace the cover of Sports Illustrated. Its posts get huge amounts of attention, so when they started promoting Save the Kids, people noticed.

The altcoin had an anti-whale mechanism prohibiting anyone from selling more than 0.1% of the total supply within 24 hours. However, once members of FaZe Clan and other influencers had promoted the altcoin for a few days, the anti-whale mechanism changed from its 24-hour limit to a 1-minute limit.

Days after the launch, influencers dumped nearly all of their bags, sending the value of $KIDS tumbling. In less than two weeks, the coin dropped 68%.

The kids aren’t alright.

Faze Kay, who took the blame as one of the masterminds, personally raked in roughly $30,000 by dumping about 6 billion $KIDS tokens in the 24 hours after launch. He was fired from FaZe Clan during the fallout.

Kay maintains he was unaware of the scope of the scam, but reports have shown he was involved in multiple pump-and-dumps before Save the Kids. Allegedly, he has voluntarily repaid nearly $250k to people who lost money.

(Note: FaZe Clan Members acted independently of the organization. The organization itself has been cleared of knowing anything about Save the Kids.)

4) Pudgy Penguins (soft rug pull)

In the early days, pump and dump crypto scams were fairly straightforward. A scammer would drive up the price, exit, and flee with their ill-gotten gains.

Now, the waters are getting murkier, as the definition of project “abandonment” can be loosely interpreted. Shutting down a Discord and Twitter account is clear fraud. But does selling a t-shirt or updating artwork of an NFT project constitute development? Or is it just throwing a bone to a community you’ve exploited?

Pudgy Penguins is a perfect example of this. In the summer of 2021, Pudgy Penguins was considered one of the top 15 PFP projects in the NFT space. To this day, it is still ranked 25th all-time in sales volume on OpenSea.

But this is a case study in something called a “soft” rug pull. It doesn’t involve the quick scam where a project disappears in ensuing examples.

Instead, a soft rug pull involves creators “goading” a community along. Creators continue to engage with the community by saying they’re fulfilling the promises made on the project’s roadmap. In the meantime, they benefit by pocketing secondary sales made possible by the promises they make to a community.

By the end of 2021, the creators had not done much. Loyal penguin holders went looking for answers, when an explosive tweet in January 2022 revealed that the creators had drained the project’s wallet into their own wallet, and that Pudgy Penguins as a company was essentially broke.

NFT ethics are not always black & white. One of the most well-known collections was a “soft” rug pull.

It’s unknown how much money was pocketed in secondary sales. But the floor price for a Penguin has fallen from a high of 3.8 ETH to 1 ETH, or about $1,800.

A few months ago, the creators sold their rights to Netz Capital for $2.5m.

5) Evolved Apes ($2.7m scammed)

Evolved Apes promised a Street Fighter-style game where Apes could earn rewards. The developers even created a pretty slick preview of the game, and the project sold all 10,000 Apes in 10 minutes.

But just one week after the mint, with $2.7 million in the project’s wallet from the mint and secondary sales, the lead developer, “Evil Ape,” drained it and took down all social media accounts. Oh, and the artist never received a dime for their work.

Additionally, one week after the rug pull was made clear, Evolved Apes generated more than $42k in secondary sales, which went to a wallet controlled by Evil Ape.

The Evolved Apes floor price currently sits at just 0.01 ETH, or about $20, making it the largest NFT rug pull of all time.

The community has picked up the project and rebranded it as the ‘Fight Back Apes.’ ✊

6) Baller Apes ($2m scammed)

This was a collection of 5,000 Baller Apes on the Solana Blockchain. The project had all sorts of promises, including funding a community wallet with 500 SOL, air dropping a “Babe Ape,” and exclusive merchandise.

On October 1, 2021, the 5,000 Apes promptly sold out with a mint price of 2 SOL, or approximately $300. Within hours, the Baller Ape Discord, Twitter, and website were shut down after roughly $2 million had already been funneled to the developers’ wallets.

This project was particularly heinous because the project scammers tricked buyers into believing their mints had failed. The panicked buyers, not wanting to miss out on the mint, continued clicking the mint button as their wallets continued draining SOL.

There’s actually a recording of the entire scam:

Baller Ape remains the largest rug pull on the Solana blockchain. Nobody has been held accountable.

7) $SQUID token ($3.3m scammed)

This pump-and-dump is especially notable because it capitalized on the tremendous success of Squid Game on Netflix.

Absolutely terrifying.

$SQUID popped up out of nowhere on PancakeSwap. It was touted as a “play-to-earn” cryptocurrency on social media to be used in a future Squid Game-inspired video game.

There were obvious red flags:

  • On Telegram, for example, users couldn’t comment on any of the posts.
  • The whitepaper was littered with grammatical errors and misspellings.
  • When traders tried to cash out of their holdings, they quickly realized they couldn’t because the developers made them convert their holdings into some other obscure token.

$SQUID quickly skyrocketed to $2,800 per coin. Even the respected Fortune magazine wrote about the coin, attributing its appreciation to rumors that “Robinhood might consider listing the coin.”

Then this happened:

TL;DW: This is what a rug pull looks like in real-time. What a crazy time to be alive.

In a matter of seconds, the fraudsters had pocketed $3.3 million.

Before deleting their Telegram channel, the “developers” stated they didn’t want to continue running the project because they were “depressed from the scammers and overwhelmed with stress.”

How insultingly ironic.

To this day, nobody knows who the developers are, and nobody has been held accountable.

8) Blockverse ($1.2m scammed)

Blockverse was meant to be the “Minecraft of the metaverse.”

These projects often have a similar theme. Developers promise to be the “so and so” of Web3, etc.

There were 10,000 NFTs priced at about $120 each. The mint sold out in eight minutes. The developers raised 1,292 ETH: 500 ETH from primary sales and then another 792 ETH in secondary sales.

Then, as if all these people attended the same Rug Pull 101 Course, the developers erased all social media channels. All the money went to the personal accounts of the non-doxxed team.

(By the way, that’s two red flags right there, 1) a team whose identities are unknown and 2) the lack of a community multi-sig wallet composed of project members that require “multiple signatures” to approve any transaction.)

Anyways, the scammers then went quiet for a week. Clever as they are, the scammers borrowed the same excuse as the $SQUID developers. Citing their stress and threats, the developers decided to shut down the project to “protect themselves.” They promised to return in a week. A week passed by, and then a month, and so on.

In the end, the “developers” scammed $1.2 million.

Ultimately, they can simply hide behind anonymity. There’s almost nothing law enforcement can do.

9) Pixelmon NFT (soft rug pull)

No potential rug pull has provided as much delight and entertainment as Pixelmon.

The developer of Pixelmon promised a glorious role-playing video game in the vein of Pokémon. Never mind that there was already a hugely popular project named Pixelmon that combined aspects of Pokémon with Minecraft.

The Pixelmon / Minecraft collab worked because those Pixelmon developers didn’t use direct copies of Pokémon and because they also didn’t profit from the project. Pixelmon was a passion project available as a free download to integrate Pokémon on Minecraft.

In any case, Syberer, the Pixelmon NFT creator, branded his project as the Pokémon of the metaverse. People would catch and trade their Pixelmons and sell their prizes as NFTs. The project’s allure helped raise more than $70 million with 10,000 mints at 0.6 ETH per mint, pre-reveal.

Pixelmon teased some developments, including a cool preview of the gameplay on the metaverse released in early February. But when the developers didn’t provide more updates, the pressure to release more information on the NFTs was too much. The results were appalling and spectacular all at once.

The reveal was so bad that public sentiment quickly changed from outrage to collective euphoria. It also gave rise to Kevin, Pixelmon’s version of Squirtle. The dev named one character Haptor, another was called Cherrybomb, but the star was Kevin.

That’s him! That’s Kevin!

Pixelmon has released more previews with improved artwork. This behavior makes it difficult to call Pixelmon a true rug pull. But it does raise several important questions about NFT ethics.

Besides, even with the improvements in the art, some people are afraid to see Kevin go. 😂

10) Frosties ($1.2m scammed)

Frosties wasn’t the first rug pull or the biggest, but it can be the most consequential. The rug pull was bold — even for NFT standards — with the Frosties Discord server disappearing only a few hours after the public minting had finished!

Each Frostie minted for about 0.04 ETH, and after the 10,000 NFTs were minted, the developers had a payday of $1.2 million. After the Discord disappeared, the next sign of trouble was a post on the official Frosties Twitter with a message, ‘I’m sorry.’

It left behind a group of devastated supporters who had to confront being taken advantage of. But the worst part was that the developers were anything but sorry.

Ethan Nguyen and Andre Llacuna were in the middle of perpetrating another rug pull through the ‘Embers’ project when they were arrested and charged with conspiracy to commit fraud and money laundering.

this legal action by the U.S. Attorney’s Office for the Southern District of New York set a precedent in the NFT-verse. Whereas the previous rug pulls could go on undeterred, and with little consequence, the charges faced by both men made it clear that rug pulls violated consumer protection laws. Other scammers have taken notice.

11) Bored Bunnies ($20m scammed)

Finally, the Bored Bunnies collection was something else.

The developers enlisted celebrities to promote the project, including Floyd Mayweather (Clear red flag!), DJ Khaled (and another one), and Jake Paul (bro…)

NFTers were promised a host of utilities, including access to private events, metaverse land, token awards and staking, and breeding for new NFTs.

Instead, the project devolved into complete bunny debauchery. The developers took the saying, “breeding like rabbits,” literally. Before working on any promises on the roadmap, they launched a derivative project, Bored Bad Bunny, only a few days after the Bad Bunny mint.

Days after the Bored Bad Bunny mint, the developers released the Mutant Bad Bunny collection. Then, nothing happened. The developers had raised more than $20 million between the three projects. The Discord channel went silent, and the project stalled.

Twitter NFT sleuth ZachXBT exposed the project and the founders by the end of March. The exposé, coupled with legal action taken against the Frosties founders, seemed to have inspired the developers to put more effort into the project.


A few days after being exposed, the team bought a plot of land on The Sandbox. The group then touted the release of Bad Bunny hoodies and t-shirts. This is brilliantly evil, as putting minimal effort into the community could be enough to avoid the Feds.



Picture of Stefan von Imhof

Stefan von Imhof

As the CEO of Alts, Stefan lives and breathes alternative asset analysis and valuations. His alternative investing newsletter has grown into — the world's largest alt investing community, with over 200,000 investors. His favorite alternative investments are holiday rentals, cash-flowing websites, and especially his collection of 300 vinyl records. Originally from Boston and Santa Barbara, CA, he now lives with his wife in Australia.

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