10 Biggest Crypto Scandals and Frauds

Blockchain promoted the notion that it would keep money safer, given the digital nature of cryptocurrencies. In recent years, the industry has made significant strides to ensure it fulfils its promise of true decentralization, but that comes with setbacks. The explosion of blockchain has brought along crypto scandals and fraud, causing malicious actors to flee with millions of dollars of investors’ money.

As we look back at the numerous scams and exploits in the crypto space, this blog brings to you the 10 biggest crypto scandals and frauds that shook the space. Let’s begin. 

Top 10 Crypto Scandals and Frauds 

– The $1.4 Billion Bybit Heist 

The Bybit Hack, which occurred on February 21, 2025, is known as the single largest theft in the history of cryptocurrency. The exchange lost a whopping 400,000 ETH valued at $1.4 billion. The malicious actors exploited a vulnerability in a hot wallet system to move the funds. Bybit acknowledged the attack and launched a bounty program to recover the funds. Fortunately, the money didn’t affect the exchange. Days later, the US FBI revealed North Korean hackers were responsible for the attack.

– The FTX Collapse

FTX was one of the world’s biggest exchanges as of the time of its existence, but it fell apart following the decline in the cryptocurrency market in 2022. It was the biggest blowup and embezzlement conspiracy at the time, with over $9 billion unaccounted for. 

The collapse was caused by massive withdrawals from customers simultaneously, but that wasn’t the full story. FTX was unable to pay all its customers once because it had embezzled the funds meant for payment. The exchange claimed to have held $11.3 billion in assets at Alameda Research, a hedge fund firm. However, it was discovered that only $2.3 billion of those funds were actually in the hedge fund, as FTX moved the rest out of customer accounts for unknown purposes. 

The United States Department of Justice (DOJ) said the founder and CEO, Sam Bankman-Fried, had embezzled the funds for his purposes. Sam was found guilty of misappropriation of funds and money laundering in March 2024 and was sentenced to 25 years in prison. 

– Terra USD Collapse 

Another scandal that made headlines in 2022 was the Terra USD collapse. The United States government increased interest rates rapidly to fight inflation in 2022, which drove many traders away from cryptocurrency. Terra USD suffered from this action. Traders began selling the stablecoin in massive numbers, causing it to depeg against the USD. Afterwards, the digital coin spun out of control and plummeted. The lack of confidence in cryptocurrency at the time brought Terra USD to its knees.

– The $534 Million Coincheck Hack 

Hackers broke into the Coincheck exchange to steal crypto valued at $534 million in January 2018. This was the biggest crypto theft in history. Following the attack, the exchange froze all deposits and withdrawals, but it was too late, as the damage had already been done.

Coincheck admitted it may not cover the losses suffered in the exchange. After a thorough investigation by the Japanese authorities, they discovered the hackers used a phishing attack to access hot wallets and spread malware to siphon the money. The attack was targeted at the high-income group.

– The $460 Million Mt. Gox Hack

Mt. Gox was the largest crypto exchange in 2010. The Japanese-owned exchange was first hacked in 2011, with Bitcoin valued at $8.75 million stolen. Although Mt. Gox promised to enhance its security, it suffered another hack three years later, losing an even bigger amount. Over $460 million worth of Bitcoin was siphoned, opening the floodgates for subsequent exploits in the crypto space. 

The hackers managed to flood the exchange with fake BTCs. The exploit caused customers and partners to file several lawsuits against the exchange, especially against the then CEO Mark Karpeles. They found out that the exchange didn’t use any version control software for the source code, leaving the site vulnerable. Till today, the exchange has yet to refund some of its users.

– The $308 Million DMM Bitcoin Hack

Another Japanese crypto exchange was also found in another scandal after a massive hack resulted in the loss of 4,502 Bitcoins worth $308 million. Investigations pointed to the North Korea Lazarus Group. 

Following the hack, the exchange got $320 million in funding to keep operations running and purchase more BTC to safeguard its client base. However, it discontinued operations due to the many restrictions on trading and withdrawals. DMM Bitcoin announced the transfer of its holdings and accounts to SBI VC Trade by March 2025.

– The $281 Million KuCoin Attack

KuCoin suffered a massive attack in September 2020, where $281 million worth of digital currencies was stolen. Additionally, the hackers obtained private keys to some hot wallets on the exchange. Although the team managed to freeze all transactions, the funds weren’t recovered immediately.

The management launched an investigation, and over $204 million of those funds were recovered within weeks. The Singapore-based exchange also made another breakthrough by identifying the suspects traced to North Korea. 

– The LIBRA Scandal 

The LIBRA scandal happened in February 2025 and was tied to Argentina’s President Javier Milei, who promoted the coin aggressively. Milei used his X account to advocate for the coin’s adoption, saying, “This private project will be dedicated to encouraging the growth of the Argentine economy by funding small businesses and startups.” 

Hours after people poured millions into the coin, insiders who bought the coin earlier took home $250 million. As a result, the crypto’s price declined by 90%. Milei was investigated for price manipulation, but was cleared by the Anti-Corruption Office. This was one of the biggest crypto scandals involving a prominent politician. 

– Wazir X $230 Million Hack

Wazir X is an Indian cryptocurrency exchange that gained prominence for its compliance and regulatory stance. On July 18, 2024, the exchange suffered a significant breach that led to the loss of over $230 million (INR 1900 crores). The hackers stole the funds from one of the exchange’s main trading wallets, despite the enhanced security mechanisms in place. It remains the biggest crypto hack in India’s history. 

– BitMart $196 Million Attack

BitMart was a victim of crypto hacks in December 2021, when malicious attackers stole $196 million worth of crypto from two hot wallets. The hackers stole a private key to gain access to the wallets, which consisted of $100 million worth of ETH and $96 million worth of BNB. The company is still refunding its customers to this day.

Conclusion

The crypto scandals and frauds highlight the dangers of investing in cryptocurrency and the need to deploy better security mechanisms to curb the attacks. These hackers are organized and well-funded, and even the most trusted exchange can be exploited. The response to these hacks is stronger, with many exchanges cooperating with law enforcement and intelligence firms. However, more collaborative efforts are needed to apprehend these bad actors fast and hard.