Most crypto scams happen on this blockchain – here’s what you need to know
Cryptocurrency risk monitoring platform Solidus Labs said that over 10% of tokens exhibiting fraudulent properties lie on Binanceis native BNB chain. Less than 10% is seen on Ethereum (ETH).
The analytics firm announced its real-time, on-chain Threat Intelligence tool on Thursday, saying it was designed to help anti-money laundering (AML) teams deal with smart contract fraud, which the firm described as “one of [decentralized finance] DeFi and Web3’s biggest challenges”.
Solidus Labs’ AML covers 12 chains, including Ethereum, BNB and Polygon (MATIC). The company claims that the new risk monitoring technology enables real-time analysis of smart contract fraud, as well as an off-chain view of the current state of crypto fraud.
What it found is that:
- 12% of all BEP-20 tokens on BNB Chain show fraudulent properties;
- 8% of all ERC-20 tokens on Ethereum show fraudulent properties;
- 15 newly deployed scams are detected by Solidus Threat Intelligence every hour;
- 188,525 smart contract scams have been detected on 12 covered blockchains as of October 10.
According to its press release,
“Data released by Solidus reveals that a new token pre-programmed to defraud users is created every 4 minutes on average, and the illicit funds from these scams often flow through and are potentially laundered via centralized crypto exchanges.”
It found that the lower bound of the current value of fraud-related ETH that flowed through centralized and/or regulated exchanges is $910 million.
Scam token smart contracts, it explains, are cryptocurrencies that have been hard-coded to steal investors’ funds. These can be deployed automatically but also easily replicated, “allowing serial fraudsters to quickly execute thousands of small-value attacks without raising red flags among regulated exchanges, regulators and law enforcement,” the company said.
Smart contract fraud is part of “a growing list of crypto-native market abuse typologies.” Others include blanket pulling, phishing attacks, and token impersonations.
Solidus’ vice president of regulatory affairs Kathy Kraninger was quoted as saying that
“While some of the big scams and scams make the news, like the famous Squid Games Token which is estimated to have cost users around $3 million in lost funds, the full picture emerging from our data shows that the vast majority of these scams go unnoticed him”
Solidus said in its report published on Thursday that its data indicates that more than 188,000 blanket draws have been deployed on Ethereum, the BNB Chain and other blockchains, which it said is “far more than previous estimates.”
Meanwhile, as reported, blockchain security company CertiKfound that wiretapping, a type of theft that occurs when owners of a crypto project abscond with the funds collected from their investors, dominated Web3 worldwide fraud and exploits in August of this year, but that the total number was still lower than in July.
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Learn more:
– $160 million carpet cover? – Crypto Staking Platform Freeway Halts Withdrawals Citing “Unprecedented Volatility”
– GameFi Rug Pull and Accidentally Closed Exchange – Beware of Risks in Crypto
– Crypto Hacking, Theft Increases This Year While Fraud, Darknet Markets Retreat – Chain Analysis
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