Summary # Since February 23, 2024, BitForex, a crypto exchange operational since 2017, ceased processing withdrawals amidst unexplained outflows of about $56.5M worth of crypto from its hot wallets. The absence of communication from BitForex, coupled with the recent departure of its CEO Jason Luo, has raised concerns over a potential inside job or exit scam.
Attackers # The identity of the scammers is unknown, but the main suspect is the CEO of the exchange, Jason Luo.
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Summary # HyperVerse, a cryptocurrency hedge fund formerly known as HyperFund, collapsed, leading to a loss of approximately $1.3 billion for its customers. The fund, promoted by Australian entrepreneur Sam Lee and his business partner Ryan Xu, both founders of the now-defunct Australian bitcoin company Blockchain Global, has caught the attention of regulators across several countries, labeling it as a potential “scam” and “suspected pyramid scheme.” The CEO Steven Reece Lewis’s identity and background are under scrutiny, as his stated qualifications and work history are reportedly fabricated.
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Summary # In May 2023, the DeFi investment platform Fintoch executed a rug pull, defrauding users of $31.6 million. The project claimed backing by Morgan Stanley and offered unrealistic 1% daily returns. Fintoch’s legitimacy was questioned, after Morgan Stanley debanked Fintoch’s claims. The fradulent company launched a public sale, and accumulated a large amount of USDT in Fintoch STO smart contract. The smart contract was deployed in Binance Smart Chain, and contained functionality of FTH BEP20 token and FTH/USDT liquidity pair.
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Summary # CoinDeal is a defunt cryptocurrency exchange. In January 2023, the U.S. Securities and Exchange Commission (SEC) charged six individuals and two companies for their involvement in a fraudulent investment scheme called CoinDeal, which raised over $45 million from sales of unregistered securities to tens of thousands of investors worldwide. The defendants falsely claimed that investors could generate significant returns by investing in a blockchain technology called CoinDeal, which would be sold for trillions of dollars to a group of wealthy buyers.
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Summary # In April 2021, Turkey-based cryptocurrency exchange Thodex collapsed in an exit scam, defrauding investors of $2 billion. Thodex’s founder, Faruk Fatih Ozer, fled to Albania with the stolen funds but was later arrested and extradited back to Turkey. In January 2023, Faruk Fatih Ozer and his two siblings were sentenced to 11,196 years in prison each for money laundering, fraud, and organized crime. Thodex’s rapid growth and promises of a safe and secure trading platform concealed its fraudulent intentions.
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Summary # Pure Bit, a South Korean cryptocurrency exchange, orchestrated an exit scam, swindling roughly 13,678 ETH ($2.8 million) from its private investors by promoting the potential for profits through its exchange token, Pure Coin. The platform promised token holders a share of the exchange’s trading revenue and discounted trading fees, enticing investors with the prospect of significant returns. Additionally, the team behind Pure Bit claimed that 90% of the token supply would be burned over three years, suggesting an induced scarcity that could potentially increase the token’s value.
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Summary # BitConnect, a cryptocurrency and lending platform, operated a fraudulent high-yield investment program (HYIP) from 2016 to 2018. The platform promised unsustainable daily returns of 1% with compounding, attracting a large investor base through aggressive multi-level marketing (MLM) tactics. In January 2018, BitConnect abruptly shut down the HYIP, triggering a panic and leading to a 90%+ drop in the value of BitConnect Coin (BCC). The U.S. Securities and Exchange Commission (SEC) later concluded BitConnect operated as a Ponzi scheme, defrauding investors of an estimated $2 billion.
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