What Are the 5 Biggest Crypto Scandals Since 2020? 

As the crypto landscape continues to evolve, its trajectory has been marked not only by innovation and success but also by a series of scandals that have captured the attention of the global financial community. Since 2020, the cryptocurrency world has witnessed a rollercoaster of events, from high-profile hacks to regulatory controversies, shaking the foundations of trust and security in the digital asset space.

At Bookmakers Review, we delve into the top five biggest scandals that have unfolded in the crypto sphere over the past few years, examining their repercussions and the lessons they offer for the future of decentralized finance.

FTX

For most cryptocurrency followers and many who are not, the current Sam Bankman-Fried trial would be the No. 1 crypto scandal since 2020. The former CEO of FTX was found guilty only a few days ago of all seven charges of money fraud brought by American law enforcement.

We reported on the trial a couple of weeks ago and things appeared to be going sideways for the once unstoppable tech-founder and cult-figure. The jury came back within five hours with a unanimous verdict of guilty. With sentencing set for March and the thirty-one-year-old facing up to 115 years of incarceration, Bankman Fried will be hoping for leniency.

That is doubtful given how the disgraced CEO courted Congress and all types of investors with the false promises that FTX was safer than all its competitors.

Ethereum

Upon writing this article, a scandal appears to be emerging about Ethereum (ETH) and two of its founders, Vitalik Buterin and Joseph Lubin are accused of committing fraud on the social media platform X (Twitter) by a former advisor. Those accusations are indicating that it could exceed the FTX fraud of $8billion.

It needs stating that these are only accusations presently and no charges have been brought against either party. The cryptocurrency world is taking the allegations seriously because of certain red flags and if they are proven true over time, they would seriously undermine the credibility that the brand has garnered up to the present.

Thodex Scandal

The Thodex scandal uncovered in 2021 when the Owner Faruk Fatih Ozer went on the run to Albania with millions of dollars of investor’s funds.

Eventually the twenty-nine-year-old was extradited back to Turkey in the summer and found guilty of money-laundering, fraud and organised crime.

The Turkish authorities have stiff penalties for such crimes and Ozer and his two siblings, Serap and Guven were sentenced to a remarkable 11,196 years in prison each. Yes, you read it right as the Turkish Authorities sentencing is set by the number of victims and in this case 2027 people were defrauded by Thodex.

Binance Investigation

A very different sort of crime and scandal was committed in one of the popular trading exchanges of crypto (Binance) as their portal became something of a haven for money-laundering ill-gotten gains. The exchange had no idea who was moving money through their system and the constant hacking of their site caused serious disruption. They do appear to have weathered the storm by updating security measures markedly in recent times and the popularity of the exchange seems unwavering from clients.

iEarn Bot Scandal

Earlier in the year, the BBC reported how a trading app called iEarn Bot had lost the savings of thousands of its customers. The app was a third-party Bot bought by the customers with a promise of large rewards over short periods. iBot presented itself as an American-based country but fact-checking raised red flags that the company was being managed in Cambodia and Vietnam.

Conclusion

Interestingly, they all were different types of scandals, warning us how big the cryptocurrency world has become

The recently concluded Sam Bankman-Fried Trial takes No.1 spot in our 5 Biggest Crypto Scandals since 2020.

The rest could be described as more debatable choices and especially our selection for No. 2 with the unsubstantiated Ethereum scandal that only broke last week. We have placed it at No. 2 because of the potential damage to the industry if the claims are true about the second best-known cryptocurrency.

The Thodex scandal was rated in No. 3 due to the number of years the three guilty family members lead by Faruk Fatih Ozer were given, a huge 11196 years in jail, passed down by Turkish Law.

We placed the Binance scandal at No. 4 as it serves as a warning to the industry that those getting too big too fast may find their security measures cannot keep up with the fastest-moving industry of our time. Binance have made many changes since but only time will tell if it is enough.

We rated the iEarn Bot scandal as No. 5 because it serves as a reminder for the research needed by customers when investing in cryptocurrency.

FBI director Patrick Wyman said,

“Knowledge – and doing some due diligence before the investment – it’s critical.” He went on to add, “It’s like everything else: if it sounds too good to be true, it often is.”