102  Blockchain

been multiple scams that have ruined people’s life by taking all their retirement

savings. It is highly unlikely that credit card companies or banks will refund any

of the losses as banks have been issuing warnings about fraudulent cryptocur-

rency trading that is not even regulated by regulators, for instance, in the UK.

There have been multiple incidents around cryptocurrency exchanges

in the past. One of them is related to an exchange called Bitconnect. The

platform would enable investors to convert their Bitcoin investment into

Bitconnect coins that would then be lent out with proposed returns of as

much as 120%. There were many accusations surrounding Bitconnect and

its involvement in the Ponzi scheme. United States authorities forced the

exchange to shut down abruptly making investors lose as much as 96%

value of their investment in Bitconnect coin.

There have been other cryptocurrency exchanges that have been hacked

costing traders and investors tens of millions of dollars. Some of the inci-

dents are listed below:

• FTX was founded by Sam Bankman-Fried when he was only 28 years

old. FTX cryptocurrency exchange was one of the top five Crypto

exchanges in the market. It collapsed by early November, 2022 and

filed for Chapter 11 bankruptcy protection in the United States on 11

November, 2022 due to liquidity crisis and with unsuccessful attempt

to search for bailout funds from rival exchange Binance. FTX valua-

tion of $32 billion wiped out to nothing after the crisis. FTX collapse

shook the whole crypto market loosing its trust and confidence.

Figure 4.2  Picture of Dr Ignatova. Courtesy of the FBI (https://www.fbi.gov/wanted/

topten/ruja-ignatova).