According to Chainalysis, cryptocurrency scammers worldwide made nearly $8 billion in revenue in 2021 led by a relatively new tactic called the “rug pull.”
The blockchain data platform reported in a blog post Thursday that revenue from scams rose 81% from a year ago to $7.7 billion. According to Chainalysis, these scams “constitute one of the biggest threats to continued cryptocurrency adoption.”
This year’s bull run has in part led to an increase in “rug pull” scams that have left investors empty-handed in crypto projects. The fraud method where crypto money developers stop trading after attracting buyers and increasing the value of the money, fleeing with the money they have obtained, leaving the crypto money illiquid is called “rug pull”.
Chainalysis said the decentralized finance (DeFi) ecosystem has become the address for “successful” scams. Rug pull transactions accounted for 37% of all cryptocurrency scam revenue this year compared to 1% in 2020, depriving victims of $2.8 billion worth of crypto.
“Rug pulls are common in DeFi because with the right technical know-how it is cheap and easy to create new tokens on the Ethereum blockchain or others and list them on decentralized exchanges (DEXs) without a code audit,” Chainalysis said.
“While code checks to catch these vulnerabilities are common in the field, most DEXs don’t require a code check to be listed, which is why we see so many rug pulls.”
However, this year’s biggest rug pull does not appear as a DeFi project. Unfortunately, the biggest fraud took place in Turkey. As it is known, in the Thodex incident, the CEO of the exchange disappeared shortly after the exchange stopped the withdrawal process. Users lost more than $2 billion in cryptocurrencies in this event, according to the report.
The second biggest rug pull of 2021 was AnubisDAO with more than $58 million stolen in cryptocurrencies.