350 new 'scam tokens' were created every day this year: Solidus Labs

More than 350 fraudulent cryptocurrency tokens were created per time this year, defrauding millions of investors, according to blockchain hazard monitoring steadfast Solidus Labs.

From the commencement of the twelvemonth to Dec. 1, 117,629 “scam tokens” were deployed according to Solidus’ 2022 “Rug Pull Report.” That’s a 41% summation from the astir 83,400 scam tokens Solidus detected successful 2021.

It marks the largest twelvemonth connected grounds for fraudulent tokens since the steadfast began monitoring successful Sep. 2020.

The study cited the BNB Chain arsenic harboring the top number of scam tokens, claiming 12% of each BEP-20 tokens are scams.

The Ethereum web was 2nd with a purported 8% of ERC-20 tokens alleged to beryllium fraudulent.

Solidus claims 2022 is the biggest twelvemonth connected grounds for fraudulent crypto-tokens. Image: Solidus Labs

A rug pull is simply a benignant of crypto exit scam wherever an idiosyncratic oregon squad creates a token and pumps up its terms earlier extracting each the worth from the project, abandoning it arsenic the token terms plummets to zero.

Almost 2 cardinal investors person mislaid wealth to these scams since Sep. 2020, a greater magnitude than the estimated 1.8 cardinal combined creditors affected by the bankruptcies of crypto exchanges and lending platforms FTX, Celsius, and Voyager.

FTX, Celsius, BlockFi and Voyager bankruptcies are estimated to impact implicit 2.3 cardinal users combined. Image: Solidus Labs

The astir fashionable benignant of scam token was a “honeypot”, which is simply a token astute declaration that doesn’t let buyers to resell.

Solidus said the astir prolific “honeypot” successfully executed successful 2022 was the $3.3 cardinal Squid Game (SQUID) token scam which grew 45,000% successful a fewer days arsenic investors bought the hype but were incapable to sell, ending with the anonymous founders seemingly moving disconnected with capitalist funds.

Centralized exchanges (CEXs) are besides affected by rug pulls arsenic galore down these malicious tokens usage them to money their fraudulent task and currency retired the ill-gotten gains.

Solidus claims astir $11 cardinal worthy of Ether (ETH) pilfered from scam tokens flowed done 153 CEXs since Sep. 2020 with the bulk of the exchanges being overseen by United States regulators.

Related: 5 cardinal takeaways from Huobi 2022 crypto manufacture report

Nearly $4 cardinal dollars flowed to U.S. CEXs successful the analyzed clip framework which was astir treble that of the 2nd astir exposed CEX jurisdiction: The Bahamas.