$7.6 Billion Missing: The Largest Cryptocurrency Ponzi Schemes [Infographic]

Largest Crypto Ponzi Schemes

Cryptocurrency Ponzi schemes have siphoned off almost $8 billion from the pockets of gullible investors for several years. Some of them are already closed, and their founders are serving prison sentences. But there are hundreds of other pyramids that continue to operate, stealing the money of their investors.

The term “Ponzi scheme” first appeared in 1920 in the United States in reference to financial pyramid of Charles Ponzi, that brought him $20 million from investors. Since his projects did not generate any income, he paid out the investors with the help of money brought in by new contributors, while keeping a portion for himself.

The pyramid operated for about a year, until the authorities closed it down and put Ponzi in prison. Since then, “Ponzi” has been a household name for similar schemes.

CryptoHound singled out the top 10 largest crypto Ponzi schemes to date — and found out what has happened since to their founders.

OneCoin and BitConnect

OneCoin and BitConnect are the largest Ponzi schemes in the world. Together, they defrauded investors of $7.2 billion. In total, the 10 most notorious crypto pyramids have stolen $7.6 billion.
For the most part, these schemes are already closed, and their founders either have been arrested or are wanted.

Largest Crypto Ponzi Schemes

For example, Konstantin Ignatov, one of the founders of OneCoin, was detained in the United States in early March 2019. Now, he is awaiting trial and faces up to 20 years in prison.

Yet according to US authorities, the true mastermind of OneCoin was his sister, Ruja Ignatova. Several charges have been filed against her and, if found guilty, she could get a 25-year prison term. Presently, Ruja is still at large.

On the other hand, Divyesh Darji — the founder of BitConnect — was found and jailed by Indian authorities. As for other large crypto pyramids, the authorities of various countries have already closed them and arrested the founders.

The Largest Cryptocurrency Ponzi Schemes

Small crypto pyramids

It would be nice to imagine that the list of cryptocurrency pyramids is limited to 10 projects but, of course, that is not the case. There are hundreds of functioning pyramid schemes; typically, they prey on unwary investors through cryptocurrency forums like BitcoinTalk. Here, they offer users the chance to contribute money for a few days with returns of up to 40-50% return on investments.

Several scientists from the University of Cagliari conducted two studies identifying more than 30 cryptocurrency pyramids that raised money in bitcoin and ethereum. In aggregate, according to researchers’ data, small crypto pyramids took in $21 million from users. Most of these projects have already been closed.

Cryptocurrency Pyramids - Full List

Smart crypto investments

There are many Ponzi schemes on the crypto market, and their founders belong in prison. Nevertheless, it is impossible to discuss the problem of Ponzi schemes without pointing out the obvious — hundreds of thousands of investors readily give away their money to shady projects in the hope of making a quick buck.

The takeaway here is simple: be smart about your investments. Before making any kind of investment, it is essential to conduct research into the project and its managers. It is also worth remembering that if a project offers a huge profit with “no risks”, it in most cases it is simply a scheme to steal the money people invest in it. With that in mind, go forth and invest (wisely)!

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