• A new report from blockchain risk monitoring firm Solidus Labs shows that fraudsters deployed over 117,000 scam tokens from Jan. 1 to Dec. 1, 2022, a 41% increase over the full 2021.
• 8% of all Ethereum tokens and 12% of all BNB Chain tokens are programmed to execute rug pulls.
• Almost 2 million investors have lost funds to rug pull tokens.
The blockchain industry is one of the most volatile in the world, and 2022 has proven to be one of its worst years yet. A new report from blockchain risk monitoring firm Solidus Labs has revealed that fraudsters deployed over 117,000 scam tokens in the first eleven months of the year, a 41% increase from the entire 2021.
One of the most popular methods of scamming digital-asset markets is known as the “rug pull.” This involves creating a token, funding its liquidity pool, and then removing all the liquidity after an initial rush of people buy the token. Unfortunately, such scams have gone undetected in the past, and Solidus Labs’ report reveals that 8% of all Ethereum tokens and 12% of all BNB Chain tokens are programmed to execute rug pulls.
The report also showed that fraudsters have used crypto-to-fiat exchanges to both seed their scams and launder their proceeds, depositing and withdrawing a total of $11 billion worth of ETH from 153 different centralized finance (CeFi) exchanges. As a result, almost 2 million investors have already lost their funds due to rug pull tokens.
The numbers are staggering, and it’s clear that the blockchain industry needs to take steps to combat fraudulent activities. Solidus Labs believes that traditional approaches to scam identification are inadequate, and that new technologies and methods are necessary to identify and stop such scams. With the right measures in place, the blockchain industry can protect investors and ensure the integrity of the market.