Cryptocurrencies: These are the biggest crypto bankruptcies

The list of projects and companies dealing with the technology behind Bitcoin is long. But not infrequently they became the grave of millions. A list of the most spectacular failures.

A nightmare for investors: After the Savedroid company had raised 40 million euros from the sale of its cryptocurrency, the head of the company disappeared without a trace. The company’s website said “It’s gone”. Everything looked as if the entire workforce of the start-up had run off with the money.

The money came via a so-called Initial Coin Offering (ICO). This is a way to raise capital through a sale of corporate tokens. The procedure is similar to that of a classic initial public offering (IPO), but is less complicated because it is not subject to the regulations of stock exchanges and banks. Above all, start-ups whose business model is blockchain technology raise money through an ICO.

What turned out to be a PR stunt at Savedroid shows what the blockchain scene is struggling with. The model of taking money unregulated through a token sale attracts scammers. This deters investors, which in turn makes it difficult for legitimate blockchain startups to raise funds. A vicious circle.

In addition, even years after the big hype surrounding blockchain technology in 2017 and 2018, there are still no convincing use cases. Even large companies researching projects using crypto technology have hardly developed anything presentable or have given up their ventures. Here are the biggest failed blockchain projects.

Facebook cryptocurrency Diem, previously called Libra

In 2019, the meta group, previously called Facebook, introduced its digital currency Libra, which was later renamed Diem. The company presented around two dozen well-known companies as founding partners of Libra. A few weeks later, large financial services such as Mastercard and Visa got out. The Internet trading platform Ebay, Vodafone and the payment service providers Stripe and Paypal no longer wanted to participate in the project. In February 2022, it was announced that the technology behind the cryptocurrency had been sold to California bank Silvergate for $182 million.

The OneCoin scam

Ruja Ignatova became known under the name Crypto Queen. Between 2014 and 2017, she raised millions of dollars from investors with the company OneCoin. Thousands cheered for Ignatova at her performances, including at Wembley Stadium in London. Then she disappeared. It was only in 2019, two years later, that OneCoin platform boss Konstantin Ignatov was arrested and imprisoned at Los Angeles Airport. It is still unknown where Ruja Ignatova ended up. But investigators have since been able to locate some of the missing money. It had been laundered in financial institutions in 21 different countries.

The crash of the Squid coin

In the successful Netflix series “Squid Game” the protagonists play with their lives. Investors in the “Squid” cryptocurrency, named after the series, did not lose their lives, but their invested money when the digital currency lost massively in value in November last year. Shortly before that, the value of a Squid coin rose from just over a cent to $2,861.80. Then the price plummeted after the developers of Squid exchanged their $3.3 million worth of coins for real money.

The fake press release on Walmart and Litecoin

Crypto fans were delighted by sensational news last September: The retailer Walmart and the developers of the digital currency Litecoin want to work together. The price of the cryptocurrency increased by 30 percent almost immediately. Unfortunately, the news turned out to be untrue. Fraudsters had falsified and distributed the press release of both companies. Walmart and Litecoin denied the information and wanted to investigate.

The more than bumpy start of Bitcoin in El Salvador

More than half a year after Bitcoin was first introduced worldwide as legal tender in September 2021, the balance sheet in El Salvador is mixed. Among other things, there is a problem with the acceptance of the new currency among the population. In a survey, 70.1 percent of the almost 1,300 participants stated that they had little or no trust in Bitcoin. According to their own statements, more than a fifth did not know what Bitcoin is. The issue of a ten-year Bitcoin bond worth one billion US dollars, which was planned for March 2022, has also not materialized so far.

When crypto exchange Coinbase accidentally made its users rich

Users of the cryptocurrency exchange Coinbase may have had the surprise of their life in December last year. Some may have become millionaires overnight. At least according to the displayed values. Coinbase later said that a bug on the platform caused some users to see incorrect rates. The false information was also visible on the popular crypto platform CoinMarketCap.