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Jafrin Ahmed
Dec 18, 2021
by Jafrin Ahmed

Crypto Scammers Rug Pulled Over $7.7B Losses This Year

crypto scam rug pulls
More than $7.7 billion in cryptocurrencies has been taken from victims this year, an 81 percent increase compared with the year before with rug pulls accounting for 37 percent of all crypto scam revenue. While crypto scam this year represented a substantial increase from 2020, they are still down on the highs of 2019, when they approached $10 billion.

Crypto Scams are Up 81% from Previous Year

According to Chainalysis' 2022 Crypto Crime Report, revenues from crypto scams this year were up 81 percent on the previous year, with rug pulls accounting for 37 percent of all crypto scams, up from 1 percent in 2020.

"Rug pulls are prevalent in DeFi because wi th the right technical know-how, it's cheap and easy to create new tokens on the Ethereum blockchain or others and get them listed on decentralized exchanges (DEXes) without a code audit," said Chainalysis.
"While code audits that would catch these vulnerabilities are common in the space, they're not required in order to list on most DEXes, hence why we see so many rug pulls," the blockchain analysis company added.

The report noted that the largest rug pull happened on the Thodex Exchange, a centralized exchange in Turkey, scamming in more than $2.6 billion. The second-largest scam occurred on AnubisDAO for $58 million.

Earlier in November, millions of dollars vanished in a matter of minutes after investors bought in a new cryptocurrency inspired by Netflix’s “Squid Game,” only to watch its value plunge to nearly zero in a few short hours. In a 10-minute span, the token’s value grew from $628.33 to $2,856.65. Five minutes later, it traded at $0.0007.

What are Rug Pulls?

Rug pulls happen when developers list a seemingly legitimate crypto project/token and then suddenly disappear with investor funds. Lured by the prospect of the scam project, investors purchase the said token in hope that its price will rise and supply liquidity.

While the project is live, the liquidity pool for the project runs into hundreds and thousands of dollars, providing the perfect opportunity for scammers to "pull" all liquidity and siphon the funds from the decentralized exchanges.

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chainalysis Crypto Scam Rug Pull Chainalysis' 2022 Crypto Crime Report
Crypto Scammers Rug Pulled Over $7.7B Losses This Year
Jafrin Ahmed
Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

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