Top 10 Crypto Exchange Scams You Must Know Before Investing (Real User Experience)

Author: Mustkim Alam

If you are a crypto trader, you must read this. I’m sharing my personal experience with crypto exchange scams and how I learned the hard way.

Cryptocurrency offers high-profit potential, but it also comes with high risks—especially when using unknown or unregulated exchanges. Over the years, many exchanges have shut down, disappeared with user funds, or turned out to be complete frauds.

I’ve been following Bitcoin since 2016, and in 2017, I started collecting free tokens through faucets, ICOs, and airdrops using wallets like Trust Wallet. I entered the crypto space this way, and soon after, I created an account on Bit-Z exchange to sell some free tokens I had received like Rebelios (RBL).

At that time, most tokens were only tradable in BTC or ETH pairs. I sold 2,000 RBL and received 0.001 BTC. That small amount became my starting capital. From there, I continued trading with the free tokens and managed to build up to 0.1 BTC — a big deal for me back then.

To trade more tokens, I also signed up for other exchanges like Hotbit.io and CoinBene. But the biggest mistake I made was assuming all exchanges were safe.

Biggest Mistake: I Didn’t Understand the Difference Between Tokens and Coins

Because I was new to crypto, I didn’t know the difference between a project token and a main coin. I blindly participated in ICOs and ended up investing in tokens that eventually got delisted by exchanges.

Worse, I transferred all my funds into Bit-Z, thinking it was a secure platform. One day, Bit-Z stopped working. A notice appeared:

“Due to legal issues, our services are suspended. Your funds are safe. You may request a refund by submitting your UID and email.”

Luckily, I had noted my UID and emailed support, but I never received a reply. Bit-Z had scammed its users, and I was one of the victims.

What I Learned from These Crypto Exchange Scams

That’s when I realized: no exchange is 100% secure. I also learned the importance of diversifying assets. You should always store most of your funds in your own wallet — like Trust Wallet or hardware wallets — not leave everything on an exchange.

Top 10 Crypto Exchange Scams (Before 2025)

1. FTX (USA) – Collapse in 2022, over $8 billion in losses. CEO Sam Bankman-Fried jailed. Major global collapse.
2. Hotbit.io (China) – Shut down in 2023. Withdrawal issues, users called it a “slow scam.”
3. Bit-Z Exchange – Vanished without notice. Funds frozen. No support, no recovery.
4. CoinBene (China) – Active scam between 2019–2023. Silent exit after $100M hack.
5. Mt. Gox (Japan) – Legendary failure from 2014. Lost 850,000 BTC. Still under legal recovery.
6. QuadrigaCX (Canada) – CEO died with wallet access. $190M lost forever. Happened in 2019.
7. Thodex (Turkey) – In 2021, CEO ran off with $2B. Major arrests followed.
8. Bitconnect – Classic Ponzi scam. $2.4B lost. Declared fraud by the SEC in 2018.
9. PlusToken (Asia) – Wallet-based Ponzi scheme (2018–2019). $2–3B lost.
10. OneCoin – Fake blockchain and MLM model. $4B scam. The founder was arrested.

How to Protect Yourself from Crypto Exchange Scams

• Check the exchange’s regulatory license and country of registration.
• Never store all your crypto in one place.
• Always use personal wallets for long-term holding.
• Use trusted platforms. Learn more in our 2025 Coin Analysis Guide.
• Be careful of high-return promises. Learn from the Top Crypto Trading Mistakes.

Final Thoughts

Being scammed by crypto exchanges like Bit-Z, Hotbit.io, and CoinBene taught me more than any profit could. Your security in the crypto world is your own responsibility. The only way to stay safe is to stay informed and stay skeptical.

Don’t trust blindly — always verify before investing.