According to an analysis from Solidus Labs, 8% of Ethereum (ETH) projects have been Rug Pulled, while 12% of BNB Chain projects have been accused of fraud.
A research report from Solidus Labs, a crypto tracking company, revealed that in the first eleven months of this year, fraudsters deployed more than 117,629 scam tokens on-chain, up 41% from all of 2021.
Rug pulls are one of the most prevalent frauds in the cryptocurrency space. It occurs when a con artist creates a crypto token, launches it on a blockchain, convinces consumers to purchase it, and then abruptly sells out all of their holdings, leaving investors in the dark.
The report founds that from September 2020 to December 1st, 2022, scammers used approximately 200,000 fraudulent tokens. These fraudsters deposited and withdrew a total of $11 billion in Ethereum to/from 153 different CeFi exchanges.
They take advantage of the fact that more than 99% of their malicious tokens have escaped detection under conventional scam identification methods.
Additionally, a shocking number of rug pull victims were noted in the research. Due to rug pull tokens, about two million investors have lost money.
It is equivalent to the number of investors who have suffered unsecured losses in some of the most significant crypto crashes (FTX and BlockFi have not yet disclosed the precise number of creditors).
The research identified 98,442 as the largest number of scams that were found in honeypots. The report stated that:
A honeypot prevents the buyers of a token from reselling it. This inability to sell causes the token’s price to only increase for as long as the scammer would like, creating the appearance of a “mooning” token and thereby tricking even more users into buying it.
Whereas hidden mints record 60,985 scams, fake ownership renunciation records 48,974, hidden balance modifiers of 8,340, hidden transfers of 2,026, and some others.
Ethereum (ETH) “The Merge Scams”
According to a research report by Chainalysis, the Ethereum Merge was used by scammers to make millions. On the day of the Merge in September, there were huge increases in scam revenue.
On the day of the Merge, the scams dominated almost all other Ethereum scamming activity, bringing in more than $905,000 in ether compared to just under $74,000 for all other ether frauds.
However, it’s difficult to overstate how prevalent Merge scams were on and around the event day. For instance, all of the top five and eight of the top 10 Ether scams on September 15 were merge scams.
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