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Common Crypto Scams: Ponzi Schemes & Impersonation

Understand the largest and most damaging crypto scams in history — BitConnect, OneCoin, PlusToken — plus impersonation tactics like the July 2020 Twitter hack.

13 min · beginner · part of Crypto Scams & How to Stay Safe

The Scope of the Problem in 2024

Crypto fraud is no longer a niche concern. It is now one of the largest categories of financial crime in the United States, and the numbers from 2024 make this undeniable. The FBI Internet Crime Complaint Center (IC3) released its 2024 Annual Report on April 23, 2025. Total reported losses across all internet crime hit a record 16.6 billion dollars, up 33 percent year over year. Crypto-related complaints accounted for 149,686 of those filings and 9.32 billion dollars in losses, a 66 percent jump over 2023. Investment scams alone were responsible for 5.8 billion dollars of that crypto total. Victims aged 60 and older were hit hardest — they filed roughly 33,000 complaints and lost 2.8 billion dollars to crypto-related fraud in a single year. The Federal Trade Commission Consumer Sentinel report for 2024, released in March 2025, told a similar story. Total fraud losses across all categories reached 12.5 billion dollars, a 25 percent increase. Crypto was the second-highest payment method by reported losses, with consumers reporting 1.42 billion dollars in losses where crypto was the rail. Bitcoin ATM fraud — where a victim is instructed to dump cash into a Bitcoin ATM and send it to a scammer — generated 65 million dollars in reported losses in just the first half of 2024, roughly ten times the level seen in 2020. These numbers are large, but they understate reality. Most fraud goes unreported. Victims feel ashamed, do not know which agency to contact, or assume nothing can be done. Chainalysis estimates true crypto-fraud volumes are several multiples of what shows up in official reports. The lessons in this module are organized around the actual playbooks scammers run today. The structure is deliberate: you will learn first how the largest historical Ponzi schemes worked, then how DeFi-specific frauds operate, then how social engineering — especially "pig butchering" — has become the dominant model for individual victims, and finally how to build a personal security checklist that closes the doors most attackers walk through.

Also in this lesson

  • BitConnect: A 2.4 Billion Dollar Ponzi Scheme
  • OneCoin: 4 Billion Dollars and No Blockchain
  • PlusToken: When Law Enforcement Caught Up
  • Impersonation: The July 2020 Twitter Hack
  • A Mental Model for Spotting Ponzi and Impersonation Scams

Key terms

Ponzi scheme
A fraudulent investment operation that pays returns to existing investors using new investor deposits rather than legitimate profits. BitConnect raised approximately 2.4 billion dollars before collapsing in January 2018.
Pyramid scheme
A fraud where participants earn primarily by recruiting new participants, with each level paying commissions to those above. OneCoin used this structure to raise over 4 billion dollars.
BitConnect (BCC)
A 2016-2018 lending Ponzi promising up to 1 percent daily returns. Closed January 16, 2018 with a 92 percent crash. Founder Satish Kumbhani indicted February 2022; remains a fugitive.
OneCoin
A 4-billion-dollar fake cryptocurrency that never had a real blockchain. Founder Ruja Ignatova was added to the FBI Top Ten Most Wanted on June 30, 2022; reward raised to 5 million dollars in June 2024.
PlusToken
A 2.25-2.9 billion dollar wallet-app Ponzi (2018-2019) primarily targeting China and South Korea. Authorities seized approximately 194,775 BTC and sentenced operators to 2-11 years in November 2020.
IC3 (Internet Crime Complaint Center)
The FBI portal for reporting online financial fraud at ic3.gov. The 2024 IC3 report logged 9.32 billion dollars in crypto-related losses across 149,686 complaints.
Bitcoin ATM fraud
A scam where victims are coached to deposit cash at a Bitcoin ATM and send the resulting BTC to a scammer-controlled wallet. The FTC reported 65 million dollars in losses in just the first half of 2024.
ICO touting
Paid celebrity promotion of token sales without disclosure of compensation, illegal under U.S. securities law. The SEC reached its first such settlements with Floyd Mayweather and DJ Khaled on November 29, 2018.
EthereumMax (EMAX)
A token promoted by Kim Kardashian on Instagram in 2021. The SEC settled with her on October 3, 2022 for 1.26 million dollars and a three-year promotion ban.

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Educational only — not financial advice.