The Crypto Scams of 2022 That Scarred the Entire Industry

2022 was a rollercoaster for the crypto industry. But the only problem is that it has gone downhill since January. There have been so many crypto scams in 2022 that it’s hard to look back and not talk about them. From the massive collapse of the once fourth largest crypto project to the fall of the second largest crypto exchange, we’ve seen it all.

Shocking Statistics About Crypto Scams

  1. In 2022, users lost more 4 billion dollars in various crypto scams to hackers.
  2. The FTX debacle is believed to be a scam 8 to 10 billion dollars in the user’s funds.
  3. Countless YouTubers have planted projects that stole millions of dollars in the money of the viewers in 2022.
  4. DeFi protocols they were the most vulnerable and sought after by fraudsters.
  5. Bitcoin is the most preferred cryptocurrency by fraudsters, followed by Tether and Ethereum.

The biggest crypto scams of 2022

Let’s take a look at the top 5 scams hitting the entire industry in 2022.

1) FTX

No matter how long you’ve been in the crypto industry, chances are you’ve heard of FTX. The collapse of the second largest crypto exchange set the entire industry on fire and resulted in the loss of billions of dollars in user funds.

Crypto scams in 2022

Sam Bankman-Fried

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

SBF is now out on bail for the highest bail ever offered by the court at $250 million. He will appear in court soon and is expected to sign a plea agreement. However, lawyers and experts in this matter expect that the terms of the job will not go well with him.

2) Luna and UST

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

Crypto scams in 2022

Image source: NuWire Investor

UST was an algorithmic stablecoin backed by Luna. So when UST lost its peg to the dollar, 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 about $1.6 billion worth of Luna stakes, which were reduced to just $3,000 after the collapse.

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

3) Ronin’s Axie Infinity Network

The biggest hack ever performed in the crypto space was on Ronin’s Axie Infinity network. We can easily call it one of the biggest crypto scams of 2022. Hackers managed to steal 625 million dollars after discovering a vulnerability in the network and got 170 thousand Ethereum and 25 million USDC tokens.

Ronin's Axie Infinity network lost $625 million to hackers

This was such a large attack that Axie stopped the Ronin web to prevent more damage. Users could not perform any online transactions at that time. One positive news was that Axie informed that the hackers still have their funds in the wallet and are working with law enforcement to get them back.

Binance and FTX have also come forward to help Axie and said they will provide assistance and help investigate the hack.

4) Safe month

Safemoon was first launched in 2021, but its downfall occurred in 2022, so we count it among the biggest crypto scams of the year. The fraud was discovered by cofeezilla, after which the token fell 26% in one day. He informed his viewers that the founder of the project, John Karony, was stealing from the liquidity fund. Many other team members on the project were also doing the exact same thing.

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

Watch the video to get the perfect picture of Safemoon. Many Safemoon fans may disagree with this, but this video is a hot take on the project and I agree with it.

5) Crypto wormhole bridge

Wormhole, an 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 lost. The project even offered a $10 million reward for hackers to return the stolen funds.

Ethereum and Solana bridge token, Wormhole loses $321 million in hack

This hack happened because there was a major vulnerability in the smart contract reported by Certik. After the hackers did not return the funds, Jump crypto returned the funds to ensure that wETH remains pegged 1:1.

What do you think about the biggest crypto scams of 2022? And do you think 2023 will be a better year for the industry? Let us know in the comments below. And if you find our content informative, please share it with your family and friends.

Also read: Bankman-Fried himself probably won’t get a good plea deal, attorney says.

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