Several DeFi firms have recently been targeted by threat actors. On a regular basis, cryptocurrency users and platforms are targeted. Scams accounted for the largest type of crypto-based crime this year, according to Chainalysis’ 2022 Crypto Crime Report.
Revenue of $7.7 billion was earned due to crypto scams from victims all around the world. This is an increase of 81 percent from 2020.
Rug pulls, a new sort of scam in the DeFi ecosystem, were a key contributor for the surge in scam revenue.
Rug pulls accounted for 37 percent of all cryptocurrency scam revenue, totaling $2.8 billion in stolen crypto.
The number of deposits to scam addresses dropped from $10.7 million to $4.1 million, signifying fewer individual scam victims. This, on the other hand, means that the average amount extorted from each victim has risen.
About Rug Pulls
Rug pulls are instances in which cryptocurrency developers create ostensibly seemingly legit projects but then disappear after stealing money from investors. Rug pull, in the DeFi environment involves when developers create new tokens and promotes them to investors who then trade for them. The developers, on the other hand, drain the funds from the liquidity pool, effectively reducing the token’s value to zero. This is a typical occurrence in DeFi because it is easy and inexpensive to create new tokens on blockchains with the proper technological understanding.
A Brief Conclusion
In the cryptocurrency landscape, DeFi is an up-and-coming innovative domain that offers a slew of opportunities to early adopters. However, the novelty of the space and the relative inexperience of many investors present enough possibilities for advisories to launch scams.