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:

1. Squid Game Token Scam

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 $1.5 billion stake in Bitcoin. She sent $12,720 in Bitcoin to the account and later found out she was giving the money to a scammer.

3. South African Bitcoin company “Africrypt” makes off with $3.8 Billion

This scam targeted wealthy individuals and celebrities, claiming it had been hacked and asking investors not to report the incident to authorities.

“We urge all clients to please be patient as we attempt to resolve the situation at hand. It is understandable that clients may proceed the legal route, but we ask clients to please acknowledge that this will only delay the recovery process,” the exchange said in a statement.

The company was founded by Raees and Ameer Cajee, who claimed they could offer a 10% daily return and took off to the UK just days after the supposed hack. The pair also took down the website and disconnected all contact, including their phone numbers.

Hanekom Attorney’s, the law firm representing the victims, said most of the Bitcoin was transferred to BTC tumblers and mixers, making it impossible to trace. The scammers also drained investor funds into some of the wallets they were using to run the scam.

Altogether scammers made off with $10 billion in “DeFi” scams in 2021, which has forced many people such as Sen. Elizabeth Warren and SEC chairman Gary Gensler to ask Congress to regulate the growing and sometimes dangerous market.

One of Bitcoin’s biggest appeals for scammers is that transactions are irreversible, meaning once a transaction is approved it cannot be deleted from the blockchain. This opens the door to scams in many different forms, such as NFT scams, Pump & Dump scams, rug pulls, ICO Scams, and market manipulation.

NFT or Non-Fungible Tokens exist on the blockchain and can be transferred back and forth between users or marketplaces. If your crypto account is hacked and the NFT is transferred to an outside user, getting it is a very difficult process.

Pump & Dump scams are used to artificially inflate the price of an asset so the scammers can turn a huge profit. The scammers first try to trick investors by spreading misleading information to drive the price up. Once the market realizes the hype was fake, the value plummets and the investors lose a lot of money.

Rug Pulls occur when bad actors get investors to buy up crypto tokens. Once enough money is transferred into their accounts, they run out the back door and leave their victims with nothing. It is important to pay attention to websites and third parties involved and to not trust anyone on social media no matter how many positive reviews there may be. Shaun Heng, the VP of Growth & Operations at CoinMarketCap says if verifiable reviews cannot be found the odds of being scammed are high.

ICO's or Initial Coin Offerings are the crypto equivalent of an Initial Public Offering for stock and can be similar to rug-pulling scams. ICO's collect funds from investors and abandon the project once an adequate profit has been made. One way to avoid this scam is to review the company's whitepaper. If a whitepaper is not provided, don't make an investment.

Market manipulation occurs when scammers try to tip the scales in their favor by engaging in several illicit activities such as spoofing and front running. Spoofing is where scammers use fake accounts to give investors the impression the demand for a certain token is rising or falling. Front running happens when trades are made on the knowledge of future transactions and make large profits before major price swings.

The crypto market has previously been compared to the "Wild West" due to its unregulated nature and its ability to enable bad actors, so it's important to exercise caution when buying or trading crypto.

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