350 Fraudulent Tokens Are Created Every Day: Rug Pull Scams Are Becoming Commonplace. All the More Reason to Focus on Bitcoin.
The guarantees that Bitcoin offers you do not change. Use them to protect your future.
Every year-end, it's the same thing. Cryptocurrency predictions for the coming year multiply. It is also the occasion for various crypto companies to publish reports and studies. This is notably the case, with Solidus Labs. This risk-monitoring company has published an annual report on the cryptocurrency market.
The result: a high number of fraudulent cryptos. This is something that won't surprise you if you follow this universe a bit.
Since its inception, Solidus Labs has never recorded as many fraudulent tokens as it did in this year 2022. From January to November 2022, over 118,000 fraudulent tokens were deployed. This adds up to 350 fraudulent tokens created every day, according to the Solidus Labs report, which you can read here:
Rug pull scams are becoming commonplace in the cryptocurrency world
A “rug pull scam” is a scam frequently used in the cryptocurrency world. A rug pull scam is when the team or individual behind a crypto project suddenly abandons it. This effectively forces him to sell all his assets or choke off all the cash in his project.
Because of such a practice, customers and investors are left with worthless crypto tokens. This inevitably leads to financial losses.
So before you invest your money in the latest “ultra-promising trendy project” that everyone recommends, take the time to study the history behind the project to check that the developers are not preparing such a scam...
The Solidus Labs report names BNB Chain as the crypto ecosystem harboring the most fraudulent tokens. As a reminder, BNB Chain is the Binance Blockchain. BNB is the native token of Binance's trading platform, which remains the global leader in terms of crypto transactions.
The Solidus Labs study suggests that 10% of all BEP-20 tokens are fraudulent! This may not please Changpeng Zhao ...
Behind, we find Ethereum in second place with nearly 8% of ERC-20 tokens considered fraudulent. Still, according to the report published by Solidus Labs, fraudulent tokens can also be found on centralized crypto exchange platforms. Malicious developers usually use them to cash in and fund fraudulent projects.
As for the type of scam token, Honeypot is undoubtedly the most famous. It comes in the form of a smart contract that does not allow buyers to resell.
Every year, more than 2 million investors fall victim to rug pull scams. This is a serious problem that inhibits user confidence in cryptocurrency and reflects on Bitcoin, even though Bitcoin has nothing to do with the cryptocurrency world.
The commonplace nature of rug pull scams should alert you on two levels.
The first is that Bitcoin is a separate species. If you want to take care of your money in a sustainable way, Bitcoin is where you should go. And if you do, remember to strictly enforce the motto “Not your Keys, Not your Bitcoin.” This will encourage you to take care of your Bitcoin yourself by storing it in a hardware wallet.
If you don't do this, you will be letting a third party have control over your money. Probably not what you want...
The second warning is that the cryptocurrency world does indeed need stricter regulation to help users who still want to invest in this universe to protect themselves ... Many initiatives are moving in this direction whether in America or Europe. This is a topic that will have to be followed carefully in 2023, hoping that regulators understand that there is a complete distinction to be made between Bitcoin and cryptocurrencies.
Some reading
Trezor vs. Ledger — Which Is the Best Hardware Wallet To Use With Bitcoin? It’s time to make the security of your BTC a top priority.
Four Essential Questions on Bitcoin Privacy and Anonymity Answered. An attempt to end the confusion of some newcomers to this world.
Bitcoin and KYC Policies — Everything You Need To Know (Risks, How To Protect Yourself, …). Whatever your choice, the important thing is to understand where the risks lie.
You’ve Bought Bitcoin, Congratulations! But What Does It Mean To Own Some Bitcoin? Where is your Bitcoin stored?
Inflation Was the Theme of 2022 in the Investing World — For 2023, Two Themes Will Dominate. Here They Are. Inflation at 7.1% in America for November 2022 announced by the US Bureau of Labor Statistics confirms this.