Cryptocurrency According to research recently published by risk monitoring company Solidus Labs, all BEP-20, the standard token on the BNB chain, altcoins about 12% are linked to fraud.
“Most Scams on Altcoin Networks Go Unnoticed”
Kathy Kraninger, Solidus’ Executive Vice President of Regulatory Affairs, said in a statement:
“While some major rugpull and scams are in the news, such as the famous Squid Games Token, which is estimated to cost users around $3 million in lost funds, the full picture from our data shows that the vast majority of these scams go undetected.”
Prior to joining Solidus, Kraninger headed the US Consumer Financial Protection Bureau.
The research firm said it detects 15 implemented scams every hour. In the past two weeks, more than 188,525 smart contract scams have been found on twelve major blockchains.
Alongside the well-known rug pulls in decentralized finance (DeFi), Solidus says it has also seen an increase in token counterfeit scams, where a fake token contract that copies a well-known token symbol is used to trick victims into investing.
Investors lost $2.8 billion to rugpulls over the course of 2021, according to data released by Chainalysis, another crypto analytics firm, in December.
8 percent of fraudulent tokens in the Ethereum network
Solidus Labs explains why BNB Chain from Ethereum did not elaborate on the fact that it has a higher percentage of contract fraud. His research shows that 8% of all ERC-20 tokens on Ethereum exhibit fraudulent properties.
In early October, BNB Chain suffered a $100 million hack. Since Binance has close relationships with most of the chain’s validators, it was able to freeze some of the stolen funds by issuing a software update.
In 2021, a company representative said that Binance was not responsible for “rug pulls” or on-chain scams.
Samy Karim, business and ecosystem development coordinator at Binance, said in a statement in 2021:
“BSC is a public permissionless infrastructure, so anyone can project there. There are malicious people and hacks out there too, and exploits in DeFi are not new and certainly not unique to BSC.”
*Not investment advice.
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