Crypto scams in 2022 that scarred the entire industry

2022 has been a rollercoaster for the crypto industry. However, the only problem is that it has been downhill since January. There have been so many crypto scams in 2022 that it is difficult to look back and not talk about them. From the mighty collapse of once the 4th largest crypto project to the downfall of the 2nd largest crypto exchange, we have seen it all.

Shocking stats on crypto scams

  1.  In 2022, users lost over $4 billion dollars in various crypto scams to hackers.
  2. The FTX debacle is estimated to have swindled $8 billion to $10 billion in user funds.
  3. Countless YouTubers have shilled projects that stole millions of dollars in their viewer’s money in 2022.
  4. DeFi protocols have been the most vulnerable and sought after by scammers.
  5. Bitcoin is the most preferred cryptocurrency by scammers, followed by Tether and Ethereum.

The largest crypto scams of 2022

Let’s look at the top 5 scams that scarred the entire industry in 2022.

1) FTX

No matter how long you have been in the crypto industry, there is a high chance you have heard about FTX. The collapse of the 2nd largest crypto exchange has charred the entire industry and has resulted in the loss of billions of dollars in user funds.

Sam Bankman-Fried

The scam’s culprit is the popular and down-to-earth founder Sam Bankman Fried, who now has 8 criminal charges against him. He has been charged with multiple counts of fraud, which, if proven right, will land him in jail for 115 years.

SBF is now out on bail for the largest ever bail bond ever offered by the court for $250 million. He will soon appear before the court and is expected to sign a plea deal. However, lawyers and experts in the matter expect that the terms of the deal wouldn’t be favourable to him.

2) Luna and UST

Do you still remember Luna and UST? The projects destroyed about $20 billion to $30 billion in user wealth. They are still considered one of the largest crypto flops of all time, and some data even suggests that all of this could have been orchestrated. In fact, the founder of the project, Do Kwon, is said to be on the run from the police.

Crypto scams in 2022

Image Source: NuWire Investor

UST was an algorithmic stablecoin which Luna backed. So, when UST lost its dollar peg, people started buying UST and converting it to Luna, which increased the supply of the token to trillions and reduced its value to almost zero. Before the crash, Binance had Luna holdings worth around $1.6 billion, which was reduced to a mere $3000 after the collapse.

After this, Do Kwon launched Luna 2.0, but that was not a hit marking the end of this project.

3) Axie Infinity’s Ronin network

The largest hack ever carried out in the crypto space was on by Axie Infinity’s Ronin network. We can easily call it one of the largest crypto scams in 2022. Hackers were able to steal $625 million after they discovered a vulnerability in the network and got hands-on 170k Ethereum and 25 million USDC tokens.

Axie Infinity's Ronin network loses $625 million to a hacker

This was such a major attack that Axie halted the Ronin network to prevent more damage. Users could not carry out any network transactions at the time. One positive news was that Axie informed that hackers still have their funds in the wallet, and they are working with law officials to recover it.

Binance and FTX also came forward to help Axie and said they would be providing assistance and help in investigating the hack.

4) Safemoon

Safemoon was first launched in 2021, but its downfall happened in 2022, so we are counting it among the largest crypto scams this year. The fraud was exposed by cofeezilla, after which the token crashed 26% in one day. He informed his viewers how the founder of the project, John Karony, was stealing from the liquidity pool. Many other team members of the project were also doing the exact same thing.

John also invested in a shitcoin called Stonsk using money from the liquidity pool. There are many other coins and NFTs that the CEO invested in using user funds. He was also found cashing out millions in Coinbase and Kraken wallets.

Do watch the video to get the perfect picture of Safemoon. A lot of Safemoon fans might disagree with this, but this video is a hot take on the project, and I agree with it.

5) Wormhole crypto bridge

Wormhole, the Ethereum and Solana bridge token, lost $321 million in a hack in February 2022. It was the largest hack of 2022 at the time with 120,000 wETH tokens being lost. The project even offered a $10 million bounty to the hackers to return the stolen funds.

Ethereum and Solana bridge token, Wormhole losses $321M in hack

This hack happened because there was a major vulnerability on the smart contract which was reported by Certik. After the hackers didn’t return the funds, Jump crypto restored the funds to ensure wETH stays pegged 1:1.

What are your thoughts on the largest crypto scams in 2022? And do you think 2023 will be a better year for the industry? Let us know in the comments below. And, if you found our content informative, do share it with your family and friends.

Also Read: Sam Bankman-Fried is unlikely to get a good plea deal, informs lawyer.

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