Many people believe "crypto is a scam" because of what a number of bad actors have done over the years. Many have lost their life savings, and some lives have been ruined along the way. No, crypto is NOT a "scam", but there are bad actors. I mean, real bad actors who have caused untold pain to fellow humans.

You might have suffered a rugpull, or had your wallet drained by some people with malicious motives. If you have faced a situation like that, how did you feel? Now, imagine millions across the globe feeling the same way, thanks to the bad choices of some people.

Today, I will be covering the biggest scams that crypto has seen over the years. Five of them, starting from the biggest to the least, in that order. At the end, we will see the lessons we can learn from these scams. Are you ready? Let's go!

1: OneCoin - The Ponzi Scheme Disguised A The "Bitcoin Killer"

OneCoin was launched by Dr. Ruja Ignatova in 2014. She claimed the platform had the ability to increase the investments of depositors through what she advertised as OneCoin "mining," similar to how Bitcoin is mined. She made millions of people across the globe believe in her story. People invested money, but got nothing in return.

The truth later came to light: OneCoin was a scam. There was nothing like crypto or the blockchain involved. It was just a computer program she ran on her laptop where people signed up and were able to deposit funds into her company account. The exact figure of what was lost remains unknown to date. However, it is believed that people lost over $4 billion to the OneCoin scam.

Dr. Ruja is now on the list of the FBI's 10 most wanted individuals. A $100,000 bounty has been placed on her head. Check out our profile for a full crypto forensics of OneCoin.

2: BitConnect - A Ponzi Scheme That Cost Many Their Life Savings

Founded by Satish Kumbhani. BitConnect was going to make every investor rich, or so it seemed. The platform promised 1% daily returns to all Bitcoin holders who deposit their coins on the platform. Here is how they advertised their system:

• Investors would deposit their bitcoins on the BitConnect platform.

• BitConnect would then lend those bitcoins to other investors, who would use them to trade on cryptocurrency exchanges.

• BitConnect would pay investors a daily return on their investment, which was typically around 1%.

• The daily returns were paid out in BitConnect Coin (BCC), which was the platform's own cryptocurrency.

It sounded like a good idea, but it wasn't. Apparently, there were no borrowers of the Bitcoins users deposited. Instead, Satish and his team would pay early depositors with money from new customers. This continued for a while, until the inevitable happened.

It was a classic Ponzi scheme that was unsustainable in the long run. The platform collapsed in 2018, causing investors to lose billions of dollars. Satish is now on the list of the FBI's wanted individuals for his crimes.

3: TerraUSD and Luna - A Failed Attempt At Decentralized Stable Coin

Still fresh in the memory of many, the collapse of TerraUSD and Luna saw billions of dollars go up in smoke in a matter of hours. Founded by Do Kwon, Terra started out as a blockchain aiming to offer better all round performance than Ethereum. Along the way, they launched UST, A decentralized stable coin. Users could stake their UST for 20% APR, leading to high demand for the stable coin.

While a decentralized stable coin is needed in the crypto space, UST was not the answer. $LUNA tokens needed to be burned to mint UST. This interdependence was too risky, and many voiced their concern. Algod Trading famously had a $1 million bet with Do Kwon about the fate of LUNA. Long story short, UST lost its peg to the dollar, and a death spiral ensued. Over $40 billion was wiped off the market in less than 24 hours.

Do Kwon was charged by the US and Korean authorities for fraud in relation to the TerraUSD and Luna collapses. He was arrested in Montenegro, where he is currently serving a 4-month jail term for being in possession of fake passport IDs. There is a possibility that he will serve jail time in both the United States and South Korea.

4: Mt. Gox - How 850,000 Bitcoins Went Missing

This is a story of carelessness, negligence, and sheer unprofessionalism. The launch of Mt. Gox brought hope to Bitcoin maxis and crypto enthusiasts. For the first time, users were able to trade Bitcoin with leverage on a liquid exchange. The platform grew fast and eventually gained 70% market share. One security risk after another, and many people were no longer comfortable using the platform.

The exchange was hacked, and 850,000 Bitcoins were stolen, worth $460 million at the time. A rehabilitation plan was approved for Mt. Gox in 2021, and creditors are expecting to receive up to 80% of their claims.

Check out our profile for an in-depth analysis of what happened to Mt. Gox and the lessons you can learn from their failure.

5: Bitcoinnect - Another Ponzi Scheme That Led To A Loss Of Over $3 billion

This one was similar to Bitcoinnect. Users deposited their crypto on the platform in hope of a return on their investment. Unlike BitConnect, where users could only deposit Bitcoins, PlusToken allows users to deposit other crypto assets. However, they promised only 10% interest.

Rather than invest customer funds as they advertised, they would give new depositor money to old depositors. When customers decreased, there was no way to sustain the platform. The platform collapsed in 2019, and users lost over $3 billion

Lessons We Can Learn From These Scams

There are several lessons to be learned from all these scams. I will share only three below. You can share your own lessons in the comment section as well.

• 1 - Do your own research: DYOR cannot be overemphasized. Never buy any token solely because someone said so. Do proper analysis and make your own informed financial decisions

• 2 - Be wary of promises of high returns: If something sounds too good to be true, it probably is. Be wary of any platform that promises high returns with little or no risk. If you are not sure where the yield is coming from, you are the yield

• 3 - Stay up-to-date on the latest news: The cryptocurrency world is constantly changing, so it's important to stay up-to-date on the latest news. In the days before the Luna and UST collapses, there were multiple warnings on Twitter. Many were able to get their funds out before the deed was done.

As with any other industry, there are bad actors in the crypto space. Their actions have brought untold pain and agony to millions. These actions are not acceptable, and you can be confident that criminals will face justice for their crimes.

The crypto industry will grow past this phase inevitably. The need for proper regulation is clear.

What scam has hurt you the most? How do you protect yourself from scammers? What lessons have you learned from these failures? Do share your thoughts below. While you are at it, kindly give me a follow as well. Until next time, stay safe!