Longhash Report: Crypto Ponzi Schemes Generated Higher Returns Than Most Altcoins
If you ever wondered about how profitable it was to run a Ponzi scam using cryptocurrencies either as a buzzword or as a means of payment, we got the answer for you.
A new study made by Longhash showed that some crypto scams were more profitable than some altcoins recently.
longhash news: the biggest crypto ponzi schemes generated more financial activity than most altcoins https://t.co/iROECweTAD
— the crypto feed (@the_crypto_feed) May 30, 2019
It is no secret that Ponzi schemes are so notorious when you look at the data and perceive that they were able to swindle incredibly amounts of money.
The recent report made by Longhash highlighted that three scams were, in fact, so powerful that they have outdone many altcoins in results. Onecoin, Bitconnect and GainBitcoin were the three scams chosen by the research.
The Top Ponzi Schemes
Onecoin was able to make $3.8 million USD and it is the golden standard for any Ponzi schemes based on Bitcoin. The project basically had a useless fake currency which was traded on the site and offered high gains for the investors, becoming incredibly popular with its army or promoters.
Bitconnect was another of these fake offerings. It offered monthly returns of 40%, which anyone knows that are pretty crazy and unreal. According to information from the FBI, the owners of the business were able to get from 2.5 to 3.5 billion USD from the scam, which is comparable to tokens in the top 10 of CoinMarketCap.
The third scam, GainBitcoin, is not even close to the first two. It only scammed people out of $300 million USD promising them cloud mining and incredible returns but offering only a fake token instead. The creators of this token were arrested.
Scams Are Profitable For Scammers But Some Altcoins Are Not For Their Investors
Comparing the results with the top tokens in the market, we actually were surprised. Longhash chartered the scams together with other top tokens in the market.
Onecoin would be the 9th token by market cap while Bitconnect would be ranked on 10th. GainBitcoin, however, obviously ranked way lower, away from the top tokens, on the 32nd spot (which is not that bad).
This means that only eight major cryptos are bigger than them, which sounds absolutely unbelievable.
It was even affirmed that the researchers underestimated the market because the money generated “out of thin air” would actually give a lot more money to the scammers when compared to legitimate tokens, which have costs and real structures.
In fact, it is pretty sad that these scammer projects were able to get more money than legitimate projects like Stellar Lumens (XLM) and it shows just how much the crypto market is plagued by this kind of Ponzi schemes.
People who are scammed often lose their faith in the market, so it is important to recognize how powerful these bad actors are and give more attention and importance to the legitimate projects instead of the fake ones.