Home Coins Litecoin (LTC) The Most Well-known Monetary Pyramids within the Crypto World

The Most Well-known Monetary Pyramids within the Crypto World

The Most Famous Financial Pyramids in the Crypto World

Along with the plain benefits within the type of anonymity, accessibility, ease of use and low price of transactions, cryptocurrencies have some severe drawbacks that impede their world adoption. The principle one is the connection between crypto and crime. Everybody who has studied this subject even superficially is aware of that Bitcoin (BTC) nonetheless stays a preferred fee technique amongst scammers and criminals on the darknet. Cryptocurrencies are very handy instruments for cash laundering, evading taxes and dishonest buyers. 

At present, I’ll speak about essentially the most well-known cryptocurrency pyramids, from which thousands and thousands of buyers suffered and whose actions amounted to billions of {dollars} in losses. These corporations labored on Ponzi schemes, named after an Italian fraudster of the early 20th century. These pyramids don’t produce items and don’t present providers — all they do is community advertising and marketing, the place every member of the pyramid invitations a number of new ones that invite the subsequent ones and so forth.

The one folks concerned who handle to earn in such a system are the organizers and a few early buyers who managed to withdraw their cash in time. The remaining members within the pyramid are left with out cash, with money owed, or within the case of cryptocurrency pyramids, with no beneficial tokens.


OneCoin is taken into account one of many largest cryptocurrency pyramids, which functioned from 2014 to 2017, deceiving about three million folks and defrauding buyers of round $5 billion in whole. The founding father of One Coin is the Bulgarian fraudster Ruzha Ignatova. The pyramid labored in keeping with the classical Ponzi scheme, during which members obtain a reward for every new particular person invited.

The scammer satisfied her viewers that OneCoin would quickly develop into essentially the most influential cryptocurrency on the earth. There have been even guarantees to “kill Bitcoin.” It’s value noting that her coin didn’t even have its personal blockchain and was accepted solely on websites related to the pyramid. 

For the primary time, the Bulgarian authorities spoke in regards to the risk from fraudsters by publishing a message in regards to the dangers of taking part in OneCoin, for the reason that mission isn’t a monetary instrument and isn’t managed by regulators. This prompted the pyramid to “go away” the nation and refuse to work with Bulgarian banks.

However quickly, criticism and warnings about taking part within the scheme got here from the UK, Austria and Thailand. Italy and Germany even banned the actions of OneCoin within the international locations and blocked their accounts. Ignatova merely didn’t attend the subsequent introduced assembly with buyers in Lisbon, and was by no means seen once more. There isn’t a info on her whereabouts.

The USA authorities has charged Ruzha Ignatova with fraud and cash laundering. Whereas she faces 25 years of imprisonment, legislation enforcement officers nonetheless managed to arrest a few of her accomplices, amongst whom embody her lawyer, brother and former enterprise associate.


One other main crypto pyramid functioned from 2016 to 2018: BitConnect. It was created by unknown builders and led by a person named Satao Nakamoto.

Individuals had to purchase BCC tokens and lock them on a particular platform, and the buying and selling bot needed to earn revenue routinely. Members of the pyramid have been promised 40% in revenue per 30 days. In accordance with the organizers of BitConnect, from an preliminary funding of $1,000, buyers may anticipate to withdraw $50 million in three years’ time.

The primary critic of the pyramid was Vitalik Buterin, who drew consideration to the truth that the promise of 1% revenue per day is a basic Ponzi scheme. After a while, Mike Novogratz and Litecoin (LTC) creator Charlie Lee agreed with the opinion of the founding father of Ethereum. On the similar time, questions for the organizers of BitConnect got here from the UK authorities, which demanded the corporate to disclose its enterprise mannequin. But, this didn’t forestall fraudsters from taking part in crypto occasions and attracting new buyers.

The U.S. authorities helped to finish this story, calling BitConnect a monetary pyramid and demanding that it stop operations. After that, the BCC token fell by 90%, buyers have been left with a complete lack of $3.5 billion, and one of many organizers of the pyramid was behind bars. Divayesh Darji, the top of the Indian department of BitConnect, did, nonetheless, come out on bail in 2019.

Associated: From Bitconnect to SIM-Swap Swindling: 2018’s Largest Scams


The youngest and largest monetary pyramid in recent times. Based in 2018, the pyramid was marketed in Chinese language WeChat with guarantees of 10%–30% of return on funding per 30 days. Round 4 million folks grew to become members within the PlusToken ponzi scheme. Fraudsters allegedly advocated monetary literacy and skilled folks to make use of cryptocurrencies, however in the end aimed to transform them to Plus tokens. 

On this case, justice nonetheless overtook the organizers of the scheme, and a yr in the past, six of them have been arrested on the request of Chinese language authorities. Nevertheless, the $Three billion misplaced by buyers couldn’t be returned, and stays with the PlusToken staff members. Extra lately, on June 22, all EOS was withdrawn from the pyramid’s wallets, and shortly sufficient, this was repeated with all ETH tokens.

Even if these pyramids have virtually ceased their exercise, their varied “reincarnations” always seem, attracting inexperienced buyers. The federal government can not endlessly shield residents from such schemes, since prohibition requires proof of a criminal offense. On this case, one of the best protection is data. If everybody may acknowledge the large revenue margins promised by corporations in trade for funding as a pink flag fairly than a gold mine, there can be considerably fewer fraudsters.

The views, ideas and opinions expressed listed below are the creator’s alone and don’t essentially mirror or characterize the views and opinions of Cointelegraph.

Nick Bel is a cryptocurrency fanatic and tech author primarily based in London. He’s enthusiastic about finance and rising applied sciences, equivalent to blockchain, cryptocurrency and synthetic intelligence.

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“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
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