Key takeaways

Promises of high returns, inactive development and a lack of community engagement can signal a project is at risk of being abandoned.

Cryptocurrencies like BitConnect and OneCoin highlight how scams and mismanagement lead to a project’s downfall.

Projects like VegasCoin and Storeum failed due to a lack of real-world use, highlighting the importance of practical application and widespread adoption.

Understanding why cryptocurrencies fail helps investors avoid similar traps, emphasizing the need for caution and thorough research.

With Halloween just around the corner, it’s an ideal time to talk about ghost coins, cryptocurrencies that have haunted the financial world.

In general, cryptocurrencies have taken the market by storm, but not all of them stand the test of time. Many start with a lot of excitement, only to vanish into thin air, leaving behind only hype and regret. These abandoned projects, fittingly called ghost coins, offer valuable lessons for anyone navigating the crypto space.

This article discusses what abandoned cryptocurrencies are, why they are abandoned, five notable examples, and red flags to spot a crypto project to avoid falling for a spooky crypto trap.

What are abandoned coins, and why are they abandoned?

Abandoned coins are the digital currencies of projects that, for various reasons, have been shelved, proven to be scams, have poor liquidity, or lack funding. There could be several reasons for them getting abandoned:

• Fraud: When fraudulent operations, such as rug pulls or pump-and-dump schemes, undermine trust in the enterprise, cryptocurrencies end up getting abandoned.
• Developer desertion: A project loses the momentum required to push updates and innovations when key developers leave, leaving it stagnant and struggling to move forward.
• Lack of adoption: The project becomes irrelevant and eventually disappears in the absence of practical use cases and broad adoption.
• Regulatory concerns: Investors may be put off by legal concerns around a coin, which would shorten the coin’s lifespan and liquidity.
• Security vulnerabilities: A cryptocurrency may lose trust if there are significant security breaches, such as hacking.

Did you know? A report by Solidus Labs found that over 117,000 scam tokens were launched in 2022, a 41% increase from the previous year. In fact, new scam tokens are being detected at a rate of 15 per hour, and nearly 2 million investors have fallen victim to rug pulls.

Five notable examples of abandoned coins

Here are five well-known examples of abandoned cryptocurrencies:

1. BitConnect (BCC)

BitConnect was a large Ponzi scheme that positioned itself as an online cryptocurrency investment platform. Investors could trade Bitcoin

BTC

for its native currency, BCC, and receive high yields, which were programmatically calculated via a bot. The promoters did aggressive marketing and promised returns of 0.5% to 1% per day, along with other incentives.

At its core, Bitconnect was a pyramid scheme that relied on fresh capital to reimburse previous investors. BitConnect ran into trouble toward the end of 2017 when United Kingdom financial regulators became doubtful about its legitimacy. Regulators in Texas intervened in 2018 and forced BitConnect to close. BCC’s value bottomed out after the closure, leaving many investors with substantial losses.

2. OneCoin (ONE)

OneCoin was promoted as the next big cryptocurrency but ultimately got exposed as a multibillion-dollar fraud. Founder Ruja Ignatova, the crypto queen, claimed that her project would eventually overtake Bitcoin

BTC

as the largest cryptocurrency globally. Investors spent billions of dollars on OneCoin, which turned out to be a hoax.

OneCoin, in contrast to real cryptocurrencies, was a pyramid scheme that tricked users into purchasing training courses and enlisting others. Unlike other cryptocurrency projects, OneCoin also lacked a blockchain.

When OneCoin’s exchange closed in 2017 and prevented investors from cashing out, suspicions increased. Ignatova disappeared, and although some people think she was murdered, she is still on the United States Federal Bureau of Investigation’s most wanted list for masterminding the fraud.

3. BoringCoin (ZZZ)

BoringCoin (ZZZ) was created to ride the excitement surrounding cryptocurrencies. More than just making fun of the cryptocurrency mania, it was never intended to have any true use or purpose. Naturally, BoringCoin never took off because it had no development or use case.

Eventually, both the developers and the users lost interest, and it was abandoned. It ended up becoming just another crypto token lost in the deluge of new altcoins with no value.

4. VegasCoin (VEGCOIN)

The goal of VegasCoin (VEGCOIN) was to become the cryptocurrency of choice for bettors, particularly those in Las Vegas. Although it promised simple transactions for those who enjoy gaming, the initiative failed from the beginning because of regulatory problems in the gambling sector and little acceptance. VegasCoin’s attractiveness swiftly faded as casinos and gambling sites showed little interest in using it.

The project was ultimately abandoned, leaving investors with little more than a recollection of its broken promise.

Did you know? The FBI’s Internet Crime Complaint Center (IC3) received over 69,000 reports of cryptocurrency-related financial fraud in 2023, with estimated losses exceeding $5.6 billion.

5. Bored Bunnies

Bored Bunnies was a flashy non-fungible token (NFT) project that promised big returns, but it turned out to be a scam. Enlisting celebrities such as Floyd Mayweather Jr., DJ Khaled and Jake Paul, Bored Bunnies hyped itself as the next big thing.

It promised investors a number of utilities, such as access to private events, token awards, staking, metaverse land and breeding for new NFTs. Before delivering any goods, the founders launched a derivative project, Bored Bad Bunny. Riding the hype, the founders raised more than $20 million.

Then, the Discord channel became inactive, and the project stalled. ZachXBT, a crypto detective, uncovered the project and its founders on X in March, which was followed by legal action against the founders. ZachXBT didn’t stop there and went on calling out Mayweather Jr. for several crypto scams.

How to spot a crypto project that might get abandoned

If you’re wondering how to find a crypto project that may be abandoned later, here are a few red flags to watch out for:

• Promises of high returns: If a project is offering substantially high returns but lacks a feasible idea or a track record, chances are pretty good it’s a scam.
• Inactive development: Verify whether the GitHub or other repositories for the project are still active. It’s not a good sign if there haven’t been any updates in a long time.
• No community involvement: It’s important for crypto projects to have a vibrant community. The project may be losing interest if there is minimal activity or involvement on forums, social media or conversations.
• Untrustworthy team or roadmap: The team may not be trustworthy if it’s anonymous or if it routinely fails to meet its goals.
• No real use case: A project that lacks adoption or clear utility runs the danger of becoming unpopular and eventually being abandoned.
• Less or no funding: A project may fail if it lacks funds to support development. The idea behind a project may be workable, and the promoters may have all the good intent, yet funds are needed to take the idea ahead.

Recognizing these red flags early on can help you avoid investing money in projects that are likely unsustainable.

Abandoned cryptocurrencies: Lessons learned

The stories of these dead or ghost coins show that cryptocurrencies can be predictable. Many failed projects start out with lofty ideas and big goals but fail in the end because of reasons such as lack of funds, bad planning, low adoption, etc., though some of these are outright scams.

As things happen quickly in the crypto world, it’s important to be careful, do your own research (DYOR), and never get caught up in the hype. Learning from past mistakes could help you avoid pitfalls in the future.

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