Solidus Labs, a company that assesses and monitors blockchain risks for the cryptocurrency sector, reported this month that fraudsters created over 350 fake crypto tokens per day to scam investors.
According to the firm’s Rug Pull Report, scammers deployed 117,629 fraudulent tokens, up 41 percent from 83,400 tokens found in 2021.
The report also found that BNB Chain contained 12 percent of the world’s fake BEP-20 tokens, topping the list of scam token holders to date. The Ethereum network arrived second place at 8 percent of scammy ERC-20 tokens.
Shamcoins and Sticky Situations
The news comes amid a rise in cryptocurrency schemes, including rug pulls and honeypots.
Rug pulls take place when groups create tokens, rapidly increase their value, and then abandon the coin after extracting the project’s value. Honeypots, the most popular form of fraud, is a smart contract for tokens prohibiting coin buying and reselling.
Most centralised exchanges (CEXs) and custodial wallets, namely under US regulators, have faced massive rug pulls in recent history, scamming over 153 exchanges for $11 billion in Ether (ETH) cryptocurrencies.
Recently, Avraham Eisenberg launched a major rug pull on Mango Markets, defrauding investors of $117 million with his exploit altcoin Mango Inu.
He later stated he “did nothing wrong” and had conducted “legal” actions in the rug pull.
According to figures, US CEXs top the list of countries with fraudulent transactions, followed by the Bahamas, where FTX ex-chief executive Sam Bankman-Fried was arrested by authorities.
The Squid Game (SQUID) token ballooned 45,000 percent before its founders disappeared with its funds, costing investors $3.3 million.
Such concerning instances have been on the rise since September 2020, following the collapses of Voyager, Celsius, and most recently, the massive bankruptcy of crypto exchange FTX.
