According to blockchain risk monitoring company Solidus Labs, more than 350 fraudulent cryptocurrency tokens were created every day this year, defrauding millions of investors, as reported by Cointelegraph.
According to Solidus’ 2022 “Rug Pull Report,” 117,629 “scam tokens” were deployed from January 1 to December 1. In comparison to 2021, when Solidus found just under 83,400 scam tokens, this represents a 41% increase.
According to the report, BNB Chain is home to the most fraudulent tokens, with 12% of all BEP-20 tokens being fake.
The ERC-20 tokens on the Ethereum network, which came in second, are allegedly scams in 8% of cases, Cointelegraph further noted.
An example of a rug pull is when a person or group develops a token and artificially inflates its value before taking all the value from the project and abandoning it as the token price falls to zero.
Since September 2020, nearly 2 million investors have lost money to these scams, which is more than the estimated 1.8 million creditors who were adversely affected by the bankruptcies of the lending platforms and cryptocurrency exchanges FTX, Celsius, and Voyager, Cointelegraph further noted.
(With insights from Cointelegraph)