New reports show that the altcoin market welcomes 250 new scam projects every day. These projects have caused more victimization than bankruptcies like FTX and Terra. Solidus Labs features a few blockchains that investors should stay away from.
Beware of these altcoin projects
Blockchain risk monitoring firm Solidus shared that from the beginning of January to the end of November, there were approximately 118,000 scam projects. According to the data, more than 350 fraudulent cryptocurrencies were released daily this year. These projects defrauded millions of investors because of their successful advertising campaigns.
According to Solidus’ 2022 “Rug Pull Report”, 117,629 “fraud projects” emerged from the beginning of the year to December 1. This number is 41% higher than the approximately 83,400 scams Solidus detected in 2021. The Ethereum network came in second, with 8% of its ERC-20-based tokens turned out to be scams.
A rug pull is a type of crypto exit scam where an individual or team creates a token and raises its price before stealing all the money from the project and abandons it when the token price drops to zero. Nearly 2 million investors have lost money to these scams since September 2020. That’s more than the estimated 1.8 million combined creditors affected by the bankruptcies of crypto exchanges and lending platforms FTX, Celsius and Voyager.
The most popular type of scam is the “honeypot,” a token smart contract that does not allow buyers to resell it. Solidus says the most prolific “honeypot” successfully executed in 2022 was the $3.3 million Squid Game (SQUID) token scam, which grew 45,000% in a matter of days as investors bought but failed to sell the news, apparently ending with the unnamed founders fleeing.
The biggest crypto cheats and scams of all time
In part two, let’s take a look at the biggest fraud cases compiled by Comparitech.com. These scam projects are specifically listed by dollar amount:
OneCoin – $4 billion
The later OneCoin ponzi scheme started in 2014. It has trapped thousands of investors with the promise of high returns. At its peak, OneCoin had over 3 million members from around the world. In addition, estimates are that the fund he has collected has increased from $ 4 billion to $ 19 billion.
Africrypt – $3.6 billion
In April 2021, Africrypt’s $3.6 billion BTC pool disappeared. The two founders (brothers Raees and Ameer Cajee) said the platform was hacked and all funds drained. However, a week before the attack, Africrypt employees were unable to access the backend of the platform. While the two brothers denied any involvement in the attack, they disappeared a month later. Reports show that the amount you traded was $200 million. However, the amount of added funding was $5 million, not $3.6 billion.
GainBitcoin – $3 billion
India’s biggest crypto scam has collected between 385,000 and 600,000 Bitcoins. $3 billion in lost funds is based on estimation only. Some reports claim the stolen funds amounted to $4.7 billion. Ponzi was promising investors a 10% monthly return on their Bitcoin-on-Bitcoin investments. Its founders, Amit Bhardwaj and Ajay Bhardwaj, were convicted in March 2018.
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