The SCAMS that SHOOK crypto in 2022
Tags: web3, blockchain
Published: 2022-12-28 00:41:02

Cryptocurrencies have gained a lot of popularity in recent years, with people investing in them as a way to earn high returns. However, this year, 2022 has proved to be the WORST year in the crypto space for investors. In this blog, we'll take a look at some of the top scams and frauds that SHOOK Crypto investors.

## Ukraine: NOT the most surprising


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/oelg02xgwlhfr95ehxa8.png)

In February 2022, the Ukrainian government made headlines when it accepted cryptocurrency donations in response to the recent invasion by Russia. To incentivize more donations, they announced an **airdrop**, or the distribution of free cryptocurrency tokens or **non-fungible tokens** (NFTs), to those who donated via the **Ethereum network**.

However, the plan backfired when individuals started to send small amounts of money just to qualify for the airdrop, hoping to profit off the free tokens. The Ukrainian government ultimately canceled the airdrop and faced accusations of conducting a "**rug pull**" - a term used when a cryptocurrency developer abandons a project and walks away with all the funds.

While this situation could be seen as a rug pull, it's important to note that the donations still went towards a **charitable cause and the government's intentions were not to defraud donors**. This situation serves as a reminder to be cautious of donating to unfamiliar causes, especially during times of crisis.

## Ronin Hack


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/1jiw619o708qv7ygtvah.jpg)

In March, the Ronin blockchain, which powers the popular play-to-earn cryptocurrency game **Axie Infinity**, was **hacked**. The exploit was reportedly a result of a temporary change made by **Sky Mavis in December** that lowered security protocols. The hack resulted in the loss of hundreds of millions of dollars, which was only discovered when a user tried to withdraw their funds and found that the liquidity was no longer there.

Axie Infinity is a game that requires users to purchase expensive non-fungible tokens (**NFTs**) in order to play and earn real money in the form of cryptocurrency. The high cost of entry has led to the emergence of "**scholarships**" that allow users to split profits with those who lend out the necessary NFTs. In response to the hack, Axie Infinity raised $125 million to reimburse users for stolen funds, but the remaining $625 million is likely lost forever.

**The U.S. government believes that the hack was perpetrated by a group based in North Korea.**

## Apes: HACKED


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/8bfmnlvgxe0gln55hzbo.png)

Actor **Seth Green** fell victim to a phishing scam in May, which resulted in the theft of his entire collection of non-fungible tokens (NFTs). Green's losses included Bored Ape Yacht Club #8398, two Mutant Apes, and a Doodle NFT, all of which were valued at hundreds of thousands of dollars.

In addition to the monetary value of the NFTs, Green lost the rights to use the Bored Ape #8398 NFT, which he had named **Fred Simian**, in his upcoming comedic series **White Horse Tavern**. Bored Ape holders own a license to the **intellectual property** for their particular apes and can use them for various purposes such as selling merchandise, creating video games, or developing a sitcom.

# <mark>FTX: For which you are here!</mark>


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**Even though the whole FTX DRAMA deserves a separate blog. I will cover some most important events here.**

In December 2022, Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX, was **arrested** and **jailed** in the **Bahamas** in connection with alleged fraudulent activities while running FTX.

The arrest was part of an indictment from the **U.S. Attorney for the Southern District of New York**, and other investigations and lawsuits against Bankman-Fried and FTX are ongoing.

In November 2022, **FTX faced a liquidity crisis** and sought bailout funds after a report by **CoinDesk** raised concerns about the company's leverage and solvency. Rival exchange **Binance** considered purchasing parts of **FTX** but ultimately backed out. As a result, FTX filed for bankruptcy and its CEO stepped down.

In the hours following the bankruptcy filing, FTX **reported** that the **were hacked**, resulting in the theft of hundreds of millions of dollars' worth of tokens.

## CZ and SBF : the clash of titans!


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/1bqka1gso8wwgrjvaj5x.png)

In the wake of FTX's collapse, **Binance**, one of the largest and most successful exchanges in the industry, was reportedly considering purchasing parts of the company. However, **Binance ultimately backed out of the deal, leaving FTX to file for bankruptcy and search for other sources of funding.**

It's worth noting that Binance's decision to back out of the deal was likely not the sole factor that led to FTX's collapse. However, **it's possible that Binance's decision not to bail out FTX, along with the apparent FUD created by CZ on twitter may have contributed to the exchange's ultimate demise.**

## People: Shocked, Vitalik: Right?


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/b7s4kp6xz3ew0sw2zkp6.jpg)

The news of Bankman-Fried's arrest came as a shock to many in the **cryptocurrency community**, who had previously seen him as a **respected and influential figure** in the industry. FTX had been a popular exchange, known for its advanced trading tools and liquidity, and **SBF** was seen as a thought leader and innovator.

**SBF had a public image of being a genius like Vitalik and being cool like CZ at the same time! The scam did not only broke hearts of million of SBF followers who admired him but also shocked millions of investors.**

Not to forget, this particular fall proved Vitalik right once again that :- "**<mark>The Value of Decentralization goes beyond Money</mark>**". Vitalik Buterin was constantly bashed by **Solana fanbois** and SBF supporters for being a "**FRAUD**" and was **trolled** for **ETH SCALABILITY (or lack of it)** whenever Vitalik talked about the importance of DECENTRALIZATION and SECURITY. SBF supporters and **Solana fanbois** saw these comments by Vitalik as an attack on Solana and FTX and always used to trolled him and ETH in response on **Twitter**.

**But this incident has shut the mouth of all these fanbois and even Binance fanbois (for good)**

## Binance : Backfired?




Many believe that **CZ was a genius** for ripping his biggest rival out of business. But many might not realize that **CZ shot himself in the foot** by doing so.

In recent months, there have been a number of rumors and allegations circulating online about Binance. Among these allegations is the claim that Binance has been involved in **money laundering**.

According to some reports, the U.S. government has been investigating Binance for potential **money laundering activities**. It's worth noting that these allegations have yet to be proven, and Binance has denied any wrongdoing. However, the rumors have certainly generated a great deal of attention and have raised questions about the company's practices and Centralized Finance **in web3**.