Over One Million Crypto Scams Were Created in the Past 11 Months: Report

Crypto scams have risen dramatically over the past months, hence investors should be careful

Reports claim that amid the growing conflicts in the crypto market, crypto scams have drastically risen. More than 350 fraudulent cryptocurrency tokens were created on a regular basis this year, which defrauded millions of investors, as reported by blockchain risk monitoring firm Solidus Labs. Apparently, since the beginning of Dec.1, around 117, 629 scam tokens have been deployed. Solidus' 2022 'Rug Pull Report' claimed that there has been a 415 increase from the nearly 83,400 scam tokens that Solidus detected in 2021.

Basically, a rug pull is a type of crypto exit scam where an individual or team creates a token and pumps its price before extracting all the value from the project, abandoning it as the token plummets to zero. Back in September 2020, almost 2 million investors lost money to these scams, a far greater number than the estimated 1.8 million combined creditors affected by the bankruptcies of crypto exchanges and lending platforms FTX, Celsius, and Voyager.

Besides rug pulls, 'honeypot' is another type of scam that is now becoming popular. Solidus claims that 2022 became the year in which honeypots were the most successful crypto scams. The Squid Game token scam, which grew 45,000% in a few days also ended with the anonymous founders fleeing with thousands of dollars of investor funds. Furthermore, centralized exchanges have also been vastly affected by these rug pulls as scammers behind these malicious tokens only used them to fund fraudulent projects and cash them out for ill-gotten gains.

Solidus also said that around US$11 billion worth of Ethereum tokens were stolen through 153 CEXs since September 2020, with the majority of the exchanges being overseen by US regulators. In a nutshell, Solidus' reports have clearly stated that the crypto market is now in a volatile state, hence, investors should be extremely careful before treading into the market in 2023.