Cryptocurrency. Some say that crypto technology is revolutionizing the modern world. Others dismiss it as a flash in the pan fad doomed to collapse. The anonymous digital coins aren’t tied to any state or government or physical commodity, which is why die-hard crypto fans love them so much, and why many countries are trying to curtail their spread. But they’re also incredibly volatile and much more susceptible to exploitation than traditional fiat currency.
Here are ten unusual facts about the opinion-splitting digital phenomena.
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10 Mining Malware Destroys Smartphone
Security researchers in Russia have uncovered a new form of crypto cyberattack that is so powerful that it can deform smartphones. In 2017, staff at the Kaspersky Lab warned users about malware that takes control of their phone and forces it to perform various malicious tasks. The attack, known as Trojan.AndroidOS.Loapi, is said to cause flurries of adverts, launch DDoS attacks, and perhaps most damaging, mine for cryptocurrency.
Mining is the process by which blocks of cryptocurrency are verified. In return for their work, miners receive a reward, which is usually paid in crypto. But the act of mining requires an exorbitant amount of processing power, far more than a smartphone can handle. Experts at the Kaspersky Lab tested the malware on a trial device and found that it caused the battery to buckle in just 48 hours.
The malicious software is deliberately designed to be difficult to delete. When users try to curb its access to their devices, the bug has been known to terminate the device manager app and lock the screen. It then flashes up the intimidating message, “Phone data will wiped [sic]. Are you sure?” Experts reckon the most effective way to deal with the Trojan is to perform a complete factory reset.[1]
9 Squid Game Crypto Turns Out to Be a Scam
I’m sure you don’t need me to tell you what a global phenomenon Netflix’s Squid Game has become. The colossal surge in popularity inspired all kinds of unofficial spin-offs, including a new cryptocurrency: SQUID coin. SQUID encouraged users to pay to take part in an online game based on the hit program. The response was huge, with the coin rising in value to $2,856 in just a few days.
And then, almost as quickly as it had launched, SQUID coin crashed. It plummeted from thousands of dollars to being valued at less than a cent. The creators began retreating from the internet. They took their website offline, restricted their Twitter account, and announced that they were aborting the project altogether.
Experts explained that SQUID’s creators carried out something known as a “rug pull,” where they suddenly traded all their coins for another currency, causing it to crash. One news site estimated that the masterminds of the rug pull scam made around $3.38 million from their ruse.[2]
8 Government Mistake Sees Drug Dealers Paid Millions
In August 2021, three imprisoned drug dealers became millionaires thanks to a major bureaucratic error by the Swedish government. The convicted trio was given $1.5 million in Bitcoin after prosecutors failed to value their digital earnings correctly.
Swedish police initially seized 36 Bitcoin from the felons in 2018. They were charged and incarcerated the following year, at which point it was decided to confiscate the ill-gotten earnings. But prosecutor Tove Kullberg chose to convert the value from Bitcoin into Swedish krona. Unfortunately, this meant that the state could only take the money as it was valued at the time—around 1.3 million Swedish krona ($140,000).
It took the Swedish government two years to auction off the dealers’ online earnings, by which point Bitcoin had increased in value at least tenfold. The three men will therefore be returned around 33 Bitcoin by the state.[3]
7 The Rise of the Twitter Vigilantes
In the anonymous world of cryptocurrency, scams are a common sight. In recent years, online vigilantes have made it their jobs to track down crypto con artists and hold them accountable.
There is professional software that helps police to identify crypto criminals. But the amateur sleuths work off hunches and anonymous tips. Rather than going through the courts, they publish their findings on Twitter using accounts like Gabagool, Zach, and Sisyphus. Gabagool, for example, recently rooted out exploitative behavior by the investment company Divergence Ventures.
Divergence Ventures were accused of using confidential information from a portfolio company to manipulate the market—similar to insider trading. After much online furor, the company was forced to return millions of dollars of Ethereum that they had made by abusing airdrops.[4]
6 The Weird World of Altcoin Influencers
Like her or loathe her, Kim Kardashian has an enormous amount of sway on social media. But in summer 2021, some of her followers were left scratching their heads after she uploaded an advert to Instagram for Ethereum Max. Ethereum Max is a form of alternative cryptocurrency or altcoin, which is essentially like regular crypto’s even more unpredictable younger cousin. Many of these altcoins are straight-up scams, with some experts in fraud comparing them to Ponzi schemes.
And it isn’t just Kim Kardashian who is promoting these volatile altcoins. Across the internet, all kinds of stars, streamers, and influencers recommend that their followers look into these incredibly risky and often scam-like cryptocurrencies.
In 2021, the well-respected professional gamers FaZe Clan found themselves at the center of an online scandal after promoting the altcoin BankSocial. After the endorsement by the popular esports team, a surge of investors flocked to buy into the shady currency. In next to no time, BankSocial’s value had reached an all-time high. A few hours later, it crashed. As you can imagine, FaZe Clan’s fans were not impressed, with some accusing the gamers of deliberately manipulating its value for personal gain and taking advantage of their fans.[5]
5 Mr. Goxx the Trading Hamster
Although the shady world of crypto is steeped in fraudulent get-rich-quick schemes and endless controversy, it also has a much lighter side. For example, in September 2021, a successful investor by the name of Mr. Goxx made headlines for his astonishing insight into the digital currency market. After only a few months of trading, he was already up 20% on his initial investment and was said to be performing better than many of the professionals. That’s remarkable, especially when you consider that Mr. Goxx was a hamster.
Yes, somehow, a small furry rodent on Twitch became a cryptocurrency expert and was playing the market better than many actual investors. Mr. Goxx would select a cryptocurrency to trade via his “intention wheel” then disappear down one of two tunnels, either buy or sell. Each time the esteemed investor scurried through a tunnel, a trade was made.
The masterminds behind Mr. Goxx were two German 30-something men with an interest in digital coins. They gave their pet hamster €326 (a little shy of $400) to play with, and within a few months, he was already up 19.41%. Somehow, the plucky Mr. Goxx managed to outperform the FTSE 100 and Dow Jones stock markets, as well as major investment companies like Berkshire Hathaway.
Sadly he died soon after finding fame, his furry crypto wisdom lost forever.[6]
4 China’s Crypto Crackdown
In May 2021, China announced that they were clamping down on cryptocurrency. A statement from the People’s Bank of China and various industry bodies urged banks and online payment channels to revoke payment in crypto. Although digital currencies are still legal, this crackdown made it more difficult for people inside China to procure cryptocurrency.
“The price of cryptocurrency has soared and plummeted,” the statement noted, “and cryptocurrency trading speculation has rebounded, which has seriously violated the safety of the people’s property and disrupted the normal economic and financial order.” The statement accused cryptocurrencies of having “no real value support, and prices are extremely easy to manipulate.”
The controversial decision sent shockwaves across the market. Bitcoin fell below $40,000 for the first time in months, and other cryptocurrencies like Ethereum, Cardano, and Dogecoin all went into decline. But others seemed less concerned. The Hong Kong Bitcoin Association seemed to imply that China’s decision was hardly a paradigm shift. They tweeted, “For those new to #Bitcoin, it is customary for the People’s Bank of China to ban Bitcoin at least once in a bull cycle.”[7]
3 The Elaborate CryptoEats Scam
In 2021, scammers hoodwinked investors out of hundreds of thousands of dollars using a fake takeaway delivery service. For all intents and purposes, CryptoEats looked like a real company. It was touted as the crypto-based rival of Deliveroo and Uber Eats, a huge company in the making with an elaborate social media campaign and the support of various online influencers.
They claimed that they had partnered with hundreds of restaurants and fast-food chains, including big names like McDonald’s and Nando’s, and that they had fleets of well-paid delivery drivers with pensions to boot. They even told investors that they could get a coffee to every user within five minutes of ordering. And it would all be paid using the EATS crypto token.
But it was all empty nonsense. The company threw a launch party and promptly vanished from the internet, taking around half a million dollars of investors’ money with it. Many of the influencers who endorsed the non-existent enterprise had no choice but to apologize for their role in the grand deception.[8]
2 The Bizarre Tale of the Poly Network Heist
Typically heists are relatively quick events. Get in, take the money, and try to get away fast before anyone cottons on. But the Poly Network heist was no typical affair. It was an entire saga, mostly due to the strange moral compass of the person who carried it out.
It all began with Mr. White Hat, the mysterious hacker who stole cryptocurrency to the value of $610 million from the Poly Network platform. He exploited flaws in the system to orchestrate the largest theft in crypto history. Soon after the attack, Poly Network put out a message on Twitter asking the hacker to contact them “to work out a solution.” But just hours later, Mr. White Hat began giving his ill-gotten millions back to the network. Within a matter of days, over half of the loot had been safely returned to Poly Network.
It turns out he wasn’t in it for the money. Mr. White Hat claims he only took the exorbitant amount of money to bring attention to the security hole and because he didn’t believe the company could be trusted with it. Most criminals flee the country after masterminding a record-breaking heist, but this one chose to publish a three-page interview explaining the key issue with Poly Network’s software.
But then another twist struck this odd tale. Out of the blue, the hacker decided to lock $200 million in a separate account. This one, he claimed, could only be opened using a password from him and from Poly Network. By this point, the company was desperate to get its money back. So they gave Mr. White Hat half a million dollars as a reward for identifying the flaw in their system. And like that, in less than two weeks, all $610 million was returned to the firm.[9]
After the ordeal was over, it was reported that Poly Network had offered Mr. White Hat the role of Chief Security Advisor. Who knows if he accepted?
1 The Mysterious Death of QuadrigaCX’s CEO
During his lifetime, Gerald Cotten was the CEO of QuadrigaCX—one of Canada’s largest cryptocurrency exchange sites. Security was a major priority for Cotten. He gave himself the responsibility of protecting 115,000 accounts, worth around $137 million, by setting up a passphrase that he and only he knew.
Then, in December 2018, he died due to complications from Crohn’s disease. And suddenly, none of those 115,000 customers could access their crypto.
Cotten’s sudden passing led to much speculation. There were rumors that he faked his own death. Investigators found that large amounts of Bitcoin held in his name had mysteriously vanished, and there were other unexplainable accounts on his laptop. It later came to light that he had filed a will twelve days before his passing. But nobody in QuadrigaCX has any record of its assets.
People have taken it on themselves to try and find out the truth behind this perplexing turn of events. People on Reddit have been quizzing Fortis Escorts, the funeral home where Cotten ultimately died of a heart attack. Journalists started digging around in the quagmire of his past; the more they discovered, the stranger the story grew. There was even a podcast—Unraveling Crypto’s Biggest Mystery—dedicated to uncovering the truth. And yet still nobody knows for sure what happened, or if those 115,000 people will ever see any of their crypto savings again.[10]