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Greater than 350 fraudulent cryptocurrency tokens had been created per day this 12 months, defrauding tens of millions of traders, in line with blockchain threat monitoring agency Solidus Labs.
From the beginning of the 12 months to Dec. 1, 117,629 “rip-off tokens” had been deployed in line with Solidus’ 2022 “Rug Pull Report.” That’s a 41% improve from the almost 83,400 rip-off tokens Solidus detected in 2021.
It marks the most important 12 months on report for fraudulent tokens for the reason that agency started monitoring in Sep. 2020.
The report cited the BNB Chain as harboring the best quantity of scam tokens, claiming 12% of all BEP-20 tokens are scams.
The Ethereum community was second with a purported 8% of ERC-20 tokens alleged to be fraudulent.
A rug pull is a sort of crypto exit rip-off the place a person or crew creates a token and pumps up its value earlier than extracting all the worth from the mission, abandoning it because the token value plummets to zero.
Virtually 2 million traders have misplaced cash to those scams since Sep. 2020, a larger quantity than the estimated 1.8 million mixed collectors affected by the bankruptcies of crypto exchanges and lending platforms FTX, Celsius, and Voyager.
The most well-liked kind of rip-off token was a “honeypot”, which is a token sensible contract that doesn’t permit consumers to resell.
Solidus mentioned essentially the most prolific “honeypot” efficiently executed in 2022 was the $3.3 million Squid Sport (SQUID) token rip-off which grew 45,000% in a few days as traders purchased the hype however had been unable to promote, ending with the nameless founders apparently operating off with investor funds.
Centralized exchanges (CEXs) are additionally affected by rug pulls as many behind these malicious tokens use them to fund their fraudulent mission and money out the ill-gotten good points.
Solidus claims round $11 billion price of Ether (ETH) pilfered from rip-off tokens flowed via 153 CEXs since Sep. 2020 with the vast majority of the exchanges being overseen by United States regulators.
Associated: 5 key takeaways from Huobi 2022 crypto industry report
Almost $4 billion {dollars} flowed to U.S. CEXs within the analyzed timeframe which was almost double that of the second most uncovered CEX jurisdiction: The Bahamas.
