It is believed that the Web3.0 and cryptocurrency space has been seeing an increased level of smart contract scams, with blockchain risk monitoring firm stating its detection of an average of 15 newly deployed scams on an hourly basis, as reported by Cointelegraph.
According to Cointelegraph, on October 27, 2022, Solidus Labs stated about monitoring 12 blockchains including Ethereum, Polygon, BNB Chain, among others, since October 10, 2022, and in that time found 188,525 smart contract scams. Kathy Kraninger, former director, United States Consumer Financial Protection Bureau (CFPB), and VP of regulatory affairs, Solidus, mentioned in a statement about how majority of big rug pulls and scams go unnoticed. The firm also stated that the number of tokens which are scams, that is around 12% of BEP-20 tokens, show fraudulent characteristics to mark it as the blockchain with the maximum number of cryptocurrency scams.
On the basis of information by Cointelegraph, Ethereum’s native ERC-20 token standard became second with eight percent of the blockchains’ tokens showing scam-based traits. Reportedly, close to $910 million worth Ether related to scams has passed through centralised and regulated exchanges. Solidus highlighted that the scam token smart contracts have been hard-wired to steal investors’ funds, along with conduct other fraudulent activities such as rug pulls and token impersonations. The platform mentioned that such contracts can be automatically deployed and repeated by scammers for completion of low-value attacks with exchanges, regulators, authorities, among others. It is believed that hacks have also been on the rise, with October reportedly being the biggest month for cryptocurrency hacking activity, insights from analytics firm Chainalysis showed.
Moreover, Cointelegraph noted that Kim Grauer, director, Chainalysis, emphasised that the amount of value stole through cryptocurrency-based hacks is expected to reach an all-time high in 2022, with majority expected to be targeting decentralised finance (DeFi).
(With insights from Cointelegraph)
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