Solidus Labs has prepared a study of various cases of fraud in the cryptocurrency industry. It turned out that their number exceeded 180,000, and most often they happen on the BNB Chain network.
The main fraud scheme was the liquidity withdrawal scheme (rug pull). At the same time, if in 2020 there were 1,541 such cases, in 2021 their number exceeded 82,000, and this year it almost reached 100,000.
Liquidity withdrawal schemes are special fraudulent projects created solely to deceive investors. They pretend to be legitimate cryptocurrency projects, attract investors and list their tokens on various exchanges (mostly decentralized). As soon as a certain number of investors buy their tokens, the developers sell their own stock of tokens, which drops the rate to almost zero. Accordingly, investors are left with nothing.
At the same time, scammers invent various schemes. For example, there are projects that prohibit investors from selling their own tokens. This gives the impression of “explosive growth” and attracts investors. One such project was the SQUID token. There are also schemes with functions hidden in smart contracts for issuing new tokens, or functions for hiding the balance of developer tokens.
Analysts reported that BNB Chain has become the most popular network for scammers. About 12% of all tokens are associated with fraud. For comparison, in the Ethereum network, the share of such tokens is 8%, and in Polygon – 1.2%. Every hour, about 15 fraudulent projects unfold on various networks.
Recently, the British regulator reported that cryptocurrency scams came out on top in terms of the number of complaints by affected investors.
Source: Bits
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