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Crypto Scams Increased by 41% in 2022

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VOC, Voice of Crypto, McAfee

Key Insights

  • Solidus Lab shows 2022 recorded the highest number of crypto scams.
  • Scammers deployed about 117,649 scam tokens between January and December 2022.
  • Rug pull and honeypot scams top the crypto frauds.

 

Solidus Labs, a blockchain risk monitoring firm, has revealed that over 350 crypto tokens were created daily in 2022. They were developed and launched on trading/ exchange platforms to defraud millions of investors. 

The Solidus labs report revealed that from 1 January to 1 December, scammers deployed about 117,649 scam tokens. You would recall that in 2021, the number of scam tokens stood at 83,400— showing a 41% increase compared to 2021. 

Furthermore, it is important to know that there have been several reports on the increasing rate of scam tokens. The Solidus labs give it a spotlight and analyze the details of these scammers and their exploits in the crypto ecosystem. 

Crypto Scams Surged in 2022

The report of Solidus Lab reveals that the year 2022 recorded the highest number of scam crypto tokens. The blockchain risk monitoring firm, in its ‘rug pull report,’ says the year recorded 117,629 fraudulent tokens. 

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Similarly, the report shows that the highest number of these scam tokens were deployed on the BNB chain. Significantly, 12% of all BEP-20 tokens were fraudulent. The Ethereum network came second, with 8% of the ERC-20 tokens becoming fraudulent. 

Rug Pull: Most Crypto Scam Technique

The rug pull scam has been an issue in the blockchain and crypto ecosystem. The report shows that 12% of all BEP-20 tokens and 8% of all ERC-20 tokens are rug pull scams. 

A rug pull scam is a crypto exit, a fraudulent technique where a developer or team creates a token and pumps up the price. Once the price is hyped, they extract the values from the project and abandon it, leaving the token to zero. 

Significantly, crypto rand tweeted that over 2 million cryptocurrency investors have lost their funds to these scams since September 2022. The rug pull scam has wreaked havoc in the crypto ecosystem and affected over 1.8 million creditors. These creditors became victims due to the rug pull that led to some exchanges filing for bankruptcy. They include FTX, Celsius, and Voyager. 

Furthermore, ‘honeypot’ remains the most popular of all crypto scams. It is a token smart contract that does not allow buyers to resell a token once they own it. The Solidus Lab report revealed that the most prominent “honeypot” scam was successfully carried out in 2022. 

The crypto scam followed this pattern; the developers launched the SQUID token, hyped the project, and pumped it to about 45,000% in a few days. Investors bought the hype and could not sell it after it wavered. The founders ran off with investors’ funds. 

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