In the world of globalization, corporate social responsibility has turned out to be one of the most difficult tasks to be accomplished. Growing number of frauds and scams have evaporated billions of dollars that have adversely affected investor’s funds. Financial scandals to Ponzi schemes, every major financial scam has crippled economics and led to unemployment around the world.

Bitcoins are a result of the aftermath of the global financial crisis of 2008. The failure of numerous banks and other financial institutions underscored the fragility of the contemporary banking institution. Financial markets all around the world are highly regulated leaving no space for frauds and scams. Still, we find a number of fraud cases coming up.

It is believed that scammers have now turned to unregulated markets like Cryptocurrency. Scammers operate in these markets as these fintech innovations are relatively new, unregulated and involve complicated technology. Crypto scammers persuade investors to buy fake coins or cryptocurrencies.

All they need is a swanky website and an official-looking white paper to cheat investors. The startups lay down there terms and conditions in a white paper which is the only document available to the investor to decipher whether to invest or not. Most of the startups don’t even prepare these white papers on their own rather outsource this task. Many ICOs are offered to raise millions of funds without even having a prototype of their software. Many genuine ICOs are also subject to scams like market manipulations, many startups over inflate cryptocurrency value.

ICOs so far have safeguarded themselves from serious scrutiny and have been placed out of authorities purview. Facebook recently banned many cryptocurrency advertisements like ICO from the platform as they currently are “not operating in good faith”. Investment in cryptocurrency are highly speculative, risky and requires information.

Let’s have a brief overview of some of the Major Fiat Currency Scams

Scams exists in every industry. In the effort to make money, savvy schemers are willing to lie, cheat and steal using the modern technology.

Alves dos Reis, a Portuguese forged a government contract and officially printed 100 million escudos by himself leading to “Portuguese Banknotes Crisis”.

Enron, an American company started reporting the rise in sales each year post-1996. It was declared as “ America’s Most Innovative Company”. It was at the end of 2001, the actual condition of Enron and company filed bankruptcy in 2001.

Emmanuel Nwude, a Nigerian scammer sold a fake airport for $242 million to a major international bank. This scam was discovered three years later.

Victor Lustin faked some government papers when he realized that Eiffel Tower needed repairs. He faked some papers and sold the tower to a scrap dealer for a multi-million dollar contract.

In the Indian context:

Punjab National Bank recorded unauthorized and fraudulent activities’ by diamantaire and jewelry designer Nirav Modi amounting to INR 11,400 crores. Nirav Modi was ranked 57th in Forbes list of Indian Billionaires in 2017. According to the complaint filed there was a fraudulent issue of Letter of Undertaking at the Mumbai branch of PNB.

Vijay Mallya, a leading business tycoon was charged for fraud and money laundering activities amounting to INR 9000 crore. Kingfisher Airline borrowed this huge amount from 13 Indian banks.

Now looking at the Cryptocurrency scams

Phishing, theft, fraud is a common sight in cryptocurrency. There were around 22 scams during the first to months of 2018 accounting for a loss of $400,000 (approx.).

Prodeum issued a 12-page white paper to build fruits and vegetable database on Ethereum blockchain. After raising $6.5 billion, their website, twitter account, telegram channels vanished.

In April 2017, Mumbai based Onecoin was discovered and turned out to be a Ponzi scheme.

Confido, a blockchain startup abandoned after raising around $370,000.

US Securities and Exchange halted PlexCoin ICO in December 2017 whose founder Dominic Lacroix was accused of defrauding Canadian and American investors. SEC seized all of $155 million raised by the ICO and penalised the parent company.

Opair and Ebitz was another crypto scam that promoted decentralised debit card using its own token, XPO. When the users found that the company was fake, it vanished.

Real Estate Coin (REC) and Diamond Reserve coin(DRC) claimed that their coins were backed up by real estate assets and diamonds. Their founder said that their startups are fully staffed, lawyered up but none of it was true.


Scams have been a part of all the financial sectors irrespective of whether they are regulated or not. Crypto market can not be held responsible solely for entertaining scammers and fraudulent activities. The need of the hour is to tighten regulation in all the financial markets to ensure that investors are not crashed and economies are not destroyed.

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