More than $20 Billion Lost to Rug Pulls and Scams


More than $20 Billion Lost to Rug Pulls and Scams

The cryptocurrency and non-fungible token (NFT) heists have flourished, leaving investors grappling with losses that have surpassed a staggering USD $26 billion to date. While existing trackers focus on crypto and NFT heists, a new frontier has emerged: one that encompasses insider jobs, Ponzi schemes, and intricate scams.

According to the data recently released by Comparitech, the influx of stolen funds dwindled in 2023, signaling a potential reduction in cybercriminal activities. Despite this, the cumulative sum of stolen funds continues to rise. However, it is lower compared to 2022, which witnessed an unprecedented wave of crypto heists, with hackers pocketing over USD $3.5 billion in ill-gotten gains.

Rising Hybrid Scams

Besides that, the number of reported scams and rug pulls has skyrocketed over the years. From a mere ten incidents reported in 2017, the number jumped to 364 in 2022 and currently stands at 162 for 2023. Although the value dropped from USD $4.3 billion to USD $1.2 billion in this period, it peaked in 2021 at a staggering USD $8.4 billion.

However, the amount of losses has steadily declined in 2023. According to a report by Finance Magnates, the amount lost to crypto hacks and exploits in the second quarter declined to USD $313 million. This compares to USD $715 million lost during the same period of the previous year.

While the overall landscape is showing signs of improvement, one concerning trend is emerging: the surge in exit scams. According to a report by Certik, these scams, characterized by individuals or entities launching crypto projects, accumulating value, and then vanishing, doubled in impact during the second quarter of the year.

Additionally, by breaking down the data, it becomes evident that certain blockchain platforms are disproportionally affected by securities incidents. BNB Chain, for instance, recorded over 100 security violations, resulting in losses totaling USD $71 million. Ethereum saw 55 incidents culminating in USD $66 million in losses, while Polygon faced four cases, leading to approximately USD $2.4 million in losses.

Exit Scams and Exploits

Amid the concerns of hacks and exploits within blockchains, the pioneering network, Bitcoin, has remained resilient. According to a report by Finance Magnates, Bitcoin’s decentralization, proof-of-work consensus, and the immutability of the blockchain has enabled it to weather the storms of hacking attacks.

In July, crypto hacks and exploits surged to unprecedented heights, culminating in losses surpassing USD $300 million. The highest amount of losses were reported on Multichain, a blockchain bridging platform, which lost USD $125 million from exploits.

As of July, exploits, exit scams, and flash loan attacks had drained USD $580 million, USD $123 million, and USD $255 million, respectively, year-to-date. In sum, the cumulative losses from hacks and exploits from the beginning of the year up to July have surged to USD $961 million.


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