Cryptocurrency had a big year in 2021 with digital assets such as Bitcoin topping over $60,000. But as the growing market continues to attract new investors from all over the globe, it also draws scam artists.
Much like stocks, crypto can be bought and sold and the value of crypto can rise and fall over time. However, the crypto market is unregulated, making it incredibly volatile and devoid of consumer protections, which can lead to bad actors using the platform for nefarious purposes.
With that in mind, here are some of the biggest crypto scams of 2021, and what to watch out for in 2022:
The crypto token that was inspired by the popular Netflix series saw its value surge and was later criticized for not letting investors sell their tokens, which proved to be the biggest tell-tale sign it was a scam. These pump-and-dump schemes occur when scammers draw in buyers, stop trading activity, and run off with all of the money.
The BBC reported in November that Squid Game token saw its value go from 1 cent to $2,856 in just one week with the developers making off with $3.38 million. The digital asset’s value would later plummet by 99.99%.
“In fact, open pump-and-dump schemes are rampant in the crypto world, with investors often jumping in with eyes wide open, perhaps hoping that they can ride the wave and dump their holdings for a quick profit before prices collapse,” said Cornell University economist Eswar Prasad.
2. Elon Musk Impersonators Steal $2 Million in Crypto Scam
Many crypto investors have fallen victims to “give away” scams where hackers pose as celebrities such as Elon Musk and promise to multiply whatever cryptocurrency investors send and pocket it instead.
Nearly 7,000 people reported bogus crypto investments from October 2020 to March 2021, losing more than $80 million, according to the Federal Trade Commission.
One victim said she navigated to a website that appeared on a BBC News article claiming Tesla was selling half of its…
