In 11 months of 2022, 117,629 rug pull fraud tokens entered the market. Solidus Labs experts calculated that this is about 15 scam projects every hour.
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“Over the past five years, rug pull scams have grown from a minor problem to a major epidemic in which developers of fraudulent tokens have stolen billions of dollars from millions of retail investors,” the experts write.
Fraudsters most often use BNB Chain for fraud: approximately 12% of the total emission of BEP-20 tokens falls on scam projects. Ethereum has 8%.
Thanks to this scheme, fraudsters managed to deceive more than 2 million investors. This is comparable to the total number of victims of four major bankruptcies in the industry – FTX, BlockFi, Celsius and Voyager (~2.3 million people).
The leader of fraudulent tokens is honeypot. In the smart contract of such a coin, the possibility of its resale by the buyer is closed. The most famous example was Squid Gamein which investors lost $3.3 million.
In addition, scammers resort to covert issuance of additional tokens or ownership transfer scams.
Solidus Labs experts write that scam token developers used 153 different centralized crypto platforms to fund projects and withdraw money. The combined volume of their transactions on these exchanges since September 2020 amounted to $11 billion in Ethereum. Almost $4 billion of this amount came from sites registered in the United States.
