How These Three Crypto Projects Scammed Investors Out Of At Least $4 Billion

Here’s why we keep falling prey to fake crypto projects.

Photo by Markus Spiske on Unsplash

By now, you’d think we’d know better than to invest in scammy crypto projects. But it seems we still have more learning to do.

In fact, cryptocurrency crime keeps rising every year. It grew by 79% in 2021 compared to 2020, and many expect the trend to continue in 2022.

So, it’s high time we understand why we keep falling prey to scammy crypto projects.

The answer, of course, lies in their marketing.

That’s why I analyzed the marketing behind the three arguably biggest crypto scams in history.

Here’s what I found, along with some super-interesting details about these crazy “rug pull” scams.

1. OneCoin & The Cryptoqueen

OneCoin was promoted as the Bitcoin alternative but ended up being one of the biggest Ponzi schemes in history.

Although it claimed to be crypto, OneCoin never had a blockchain behind it — which should have been an immediate red flag for investors.

Despite that, OneCoin Ltd managed to pull in at least $4 billion from investors between 2014 and 2016. Some estimate that the company stole even larger sums; around $19.4 billion, to be exact.

It seems that OneCoin made most of its money by selling educational materials like online courses and not by selling tokens. That should’ve been the second warning sign for investors. But, as we now know, most decided to ignore it.


  • Ruja Ignatova, the founder of OneCoin, disappeared in 2017 and has recently been added to the FBI’s top 10 most wanted list
  • Co-founder Sebastian Greenwood was arrested in 2018 and has been in a U.S. jail since
  • It seems that none of the investors got their money back

The Marketing

IMO, OneCoin’s success can almost entirely be attributed to cunning marketing tactics.

There are two that stand out:

  • Multi-level marketing — OneCoin heavily relied on multi-level marketing to sell “educational” materials. The company promised that both buyers and sellers of their courses would get tokens they could use to mine OneCoin. That incentivized many early investors to sell to their friends and family.
  • Personal branding — OneCoin’s charismatic founder Ruja Ignatova branded herself as the cryptoqueen, a pioneer of the imminent crypto revolution that will destroy “evil banks.” She often made extravagant claims at sold-out arenas around the world. For example, she frequently used the term “Bitcoin killer” to refer to OneCoin. She also organized flashy launches to attract new prospects and used her Ph.D. credentials to earn their trust.

OneCoin even organized “a global cryptocurrency event” called COIN RUSH.

In this video, you can watch Ignatova speak at the event just 6 years ago:

2. Squid & The Real-Life Squid Game

Squid was — or supposed to be — a play-to-earn cryptocurrency inspired by a popular Netflix show called Squid Game.

The idea was that the investors would use tokens to play online games like the ones played in the show: Red Light, Green Light, Dalgona Candy, Tug Of War, and others. The investors would also be able to earn additional tokens by playing.

The coin proved to be a hit. Its value skyrocketed to more than $2,680 per token as soon as it launched.

But unfortunately for the investors, the developers cashed out all the tokens within days of the launch. They ended up stealing over $3 million from investors.


  • The website,, is no longer available
  • We still don’t know who is behind the scheme
  • No reports from investors saying they got their money back

The Marketing

Overall, I’d say that Squid had lousy marketing.

For example, Squid’s website and whitepaper featured numerous grammar and spelling mistakes — which didn’t exactly help the company build trust.

Still, Squid did a few crucial things very right:

  • Social proof — Squid threw around big names. The company claimed to have partnered with Netflix and Microsoft and implied it was affiliated with Elon Musk. Squid’s website even featured a banner that read: “Elon Musk schilled for Squid Gam, $ SQUID to the moon.” Although unfounded, these claims helped Squid build credibility. The company also used fake YouTube accounts to “advise” other users to buy Squid, promoting it as a secret crypto coin on the rise that insiders are already profiting from. The overall impression was that everyone was talking about this coin, so it had to be good.
  • Popular concepts — Squid largely owes its success to its fake association with Squid Game. This wasn’t the first time a scammy crypto project exploited the popularity of a TV show. Take Mando as an example. The crypto coin pulled in thousands of dollars before being exposed as a scam, largely because it was named after Disney’s The Mandalorian.

3. QuadrigaCX & The CEO’s Mysterious Death

Unlike OneCoin and Squid, QuadrigaCX wasn’t just a crypto coin.

It was an entire crypto trading platform. In fact, at one point, Quadriga was Canada’s largest cryptocurrency exchange.

In reality, Quadriga was nothing more than an old-fashioned Ponzi scheme.

Quadriga’s founder and CEO, Gerald Cotten, would take the money from new investors to pay off old investors. He would also “borrow” the money for his personal use, including personal trading activities.

No one suspected anything until 2018 when customers started having issues with withdrawals. Just a few months later, Cotten — who was only 30 years old at the time — would allegedly die from complications related to Crohn’s disease while honeymooning with his wife in India.

On top of that, Quadriga waited about a month to announce the CEO’s death, making the circumstances seem even fishier.

Shortly after the announcement, it was revealed that the investors’ money was stored in cold wallets. And conveniently, no one but the now-late CEO could access them.

Some funds were retrieved, but not all — it’s estimated that investors collectively lost at least CA$169 million through Quadriga.


The Marketing

Interestingly, Quadriga’s marketing wasn’t particularly clever or intricate. It was simply on-target.

Quadriga marketed itself as the platform for beginner investors that want to make risk-free investments. So, its main selling point was the safety it was supposed to provide. (The irony is not lost on me.)

Still, if I had to choose one thing that made Quadriga’s marketing work, it would be this:

  • Social proof — Much like Squid, Quadriga owes much of its success to social proof. The platform had thousands of customers and was marketed as Canada’s main crypto exchange. This helped the platform earn trust. Simply put, no one thought to double-check a platform with SO many customers and so much “clout.”

The Bottom Line? Don’t Let Greed Take Over

Greed is blind.

The scams we analyzed weren’t flawless.

There were many warning signs before the actual “rug pulls” took place. It’s just that most have decided to ignore them:

  • OneCoin was extremely secretive about its technology, while at the same time promising investors absurd returns on their investments, like several thousands of dollars per one cent a year.
  • Squid’s whitepaper was strewn with grammar and spelling errors, and most investors realized $SQUID was a “sh*tcoin.” They bought it anyway.
  • Quadriga’s CEO operated “without any proper system of oversight or internal controls” because the firm wasn’t registered with any financial regulator. And yet, Quadriga had grown to become Canada’s largest cryptocurrency exchange.

We shouldn’t let greed blind us so much that we ignore — or entirely overlook — red flags.

A popular acronym in the crypto world instantly springs to mind: DYOR.

It stands for do your own research. And it’s probably the best piece of advice you can get.

You always need to do yo

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