The TOP 5 Crypto Scams of 2023

The most notable crypto crime-related event in December is undoubtedly the revelation of a crypto Ponzi scheme called Hyperverse, involving at least $1.3 billion.

Running through 2018 to mid-2023, operated by Sam Lee and Zijing “Ryan” Xu in Australia, HyperVerse/HyperFund offered daily returns of 0.5% and up to 300% within 600 days through a membership plan.

So high returns made (allegedly) possible through crypto mining operations, which never existed.

Over the years, ten of thousands of victims have collectively “invested” and lost $1.3 billion to this ponzi, according to Chainanalysis.

Compelled to involve friends and family to fuel the Ponzi, this fraudulent scheme transformed into both an interpersonal relationship tragedy and a financial disaster for the victims.

Multiple countries had issued notice that the Hyperverse project was a suspected pyramid scheme, an information that unfortunately never reached the victims.

Sam Lee, self-dubbed “the crown prince of bitcoin” in Australia and Ryan Xu, who claimed to be “one of China’s four bitcoin kings”, were already behind a 2019 collapsed company that owed creditors $58 million.

The scariest part?

Sam Lee is involved in running other crypto schemes namely StableDao and We Are All Satoshi, which were described by the Californian Department of Financial Protection and Innovation as “fraudulent pyramid and Ponzi schemes.”

Pig-butchering is a sophisticated scam that relies on intricate psychological manipulation tactics and operates through cyber slavery.

In 2023, justice caught up with those scammers in two instances (1,2) revealing a $305 million heist. Although this figure may seem significant, it likely falls far short of the actual amount stolen from the victims, as pig-butchering is considered a multi-billion-dollar scam industry annually.

Last year, we provided a very thorough breakdown of its genesis and the tactics used to coerce victims into siphoning away their own funds:

Reportedly, 100,000 investors were defrauded in the Indian crypto Ponzi scheme, Korvio Coin.

Among the nine main perpetrators, four were police officers who successfully convinced over 1,000 Himachal cops to invest in their token with the unbacked promise that it would skyrocket, offering rapid and high returns.

The thousand cops involved in the Ponzi scheme were instrumental in building the credibility of the fraud, contributing to its resounding success by convincing thousands of government employees to also participate.

Apparently, the police officers were lured in through a “voluntary retirement scheme,” becoming the scheme’s most vocal advocates.

This classic fraudulent get-rich scheme operated as a multi-level marketing structure, rewarding investors who recruited family, friends, and colleagues into the scheme.

It featured bogus websites on which victims were led to believe that Korvio Coin was trading like any other cryptocurrency.

As of now, the man at the center of the scam, Subhash Sharma, is still on the run.

The takedown of SafeMoon was a long time coming, many would say.

At its peak in April 20, 2021, SafeMoon boasted a $5.7 billion market cap cryptocurrency.

However, its heyday was short-lived as it was subsequently discovered that large portions of SafeMoon’s liquidity pool were never locked, and its executives were accused of accessing and using their users’ funds to fuel their luxurious lifestyle.

SafeMoon’s fraudulent activities were widely known since 2021.

Coffeezilla, a high-profile crypto sleuth, conducted numerous investigation videos covering it, starting exactly five days after SafeMoon’s all-time high on April 25th, 2021.

In those videos, he disclosed the full scale of the fraud and the techniques used to make it possible.

For two and a half years, the crypto community at large (minus SafeMoon investors) was impatiently waiting for the axe to fall on SafeMoon executives, bringing an end to a fraudulent project that has run for too long.

On November 1st, 2023, their prayers were finally answered when the Securities and Exchange Commission (SEC) charged both SafeMoon executives creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith, and the SafeMoon LLC, for running “a massive fraudulent scheme.”

A scheme that allowed them to secretly take from their users more than $200 million in crypto assets to pay for personal luxuries, among which are trip bonanzas, McLaren cars, and multi-million dollar homes.

The U.S. Attorney’s Office for the Eastern District of New York followed suit and brought similar criminal charges against the three executives: securities fraud, conspiracy to commit wire fraud, and money laundering conspiracy.

The community (for once) celebrated the SEC’s actions for bringing to a final stop SafeMoon’s long-running fraud!

Once prestigious — because no one had put their noses on their book — Hong Kong crypto actor JPEX went through a shocking meltdown in September 2023.

On September 13, the Hong Kong equivalent of the SEC, the SFC, issued a consumer warning that JPEX operated without proper licensure and using dubious practices.

Days later, while loudly claiming that “the platform will not collapse,” JPEX raised its withdrawal fees to as high as $999, while simultaneously limiting withdrawals to $1,000. Users were effectively unable to withdraw.

JPEX stopped communicating.

On September 25th, the police had received more than 2,200 complaints from JPEX users and outright denounced JPEX as, at the very least, a $191 million financial fraud.

JPEX was accused of falsely advertising untenable high yields, up to 20% APY on various staking products, to non-crypto literate individuals in a bid to bring in a massive number of victims to feed the fraud.

JPEX then proceeded to implement restrictions on withdrawal limits and raised the withdrawal handling fee so high that their users were unable to access their funds without risking losing most of it.

As of December 2023, 2,623 people have come forward as JPEX’s victims. A staggering HK$1.6 billion (~$305 million) has been lost among them.

66 arrests have been made, among them social media influencers Joseph Lam and Chan Ye, who were considered key in building JPEX’s reputation and reach.

Anecdotally, one of JPEX’s suspects was literally caught red-handed while shredding and bleaching files!