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‘Rug pull’ cryptocurrency scam costed investors over $7.7 billion in 2021: Chainalysis

It should be noted that in 2020, rug pulls accounted for just 1 per cent of the under $5 billion in total illicit revenue.

By: Tech Desk | Pune |
December 17, 2021 3:53:05 pm
Cyptocurrencies do give a high rate of returns, but are equally susceptible to cyber attacks. (Photo Credit: Pixabay)

Cybercriminals are now taking advantage of the ongoing craze around cryptocurrencies to trick potential victims and steal their digital money. In a recent report, research firm Chainalysis revealed that scammers mooched off over $7.7 billion ( Rs 58,698 crore approx.) worth of cryptocurrency from victims in 2021.

At least 36 per cent of the victims lost over $2.8 billion (Rs 280 crores approx.) to ‘rug pull’ cases. A rug pull is a malicious maneuver in the cryptocurrency industry where crypto developers abandon a project and run away with investors’ funds. In total, crypto scams rose by 81 percent this year from 2020 led by rug pulls, the company said in a blog post.

It should be noted that in 2020, rug pulls accounted for just 1 per cent of the under $5 billion in total illicit revenue.

However, the number of deposits to scam addresses fell from just under 10.7 million to 4.1 million, meaning that there were fewer individual scam victims. But this also tells us that the average amount taken from each victim increased.

The company noted that scammers’ money laundering strategies, haven’t changed all that much. As was the case in previous years, most cryptocurrency sent from scam addresses ended up at mainstream exchanges.

Cryptocurrency exchange Thodex accounted for a majority of the lost funds on the list after its founders went missing with over $2 billion in client funds in April 2021. This was followed by Dogecoin-inspired AnubisDAO at $58 million, and Binance Smart Chain-based exchange Uranium Finance at $50 million.

Earlier, in November, millions of dollars vanished in a matter of minutes after investors piled into a new cryptocurrency inspired by “Squid Game,” the popular Netflix survival series, only to watch its value plunge to nearly zero in a few short hours. Then Squid went on a roller-coaster ride. In a 10-minute span later on Monday, the token’s value grew from $628.33 to $2,856.65, according to CoinMarketCap, a crypto data tracking website. Then, five minutes later, it traded at $0.0007.

Meanwhile, US Federal Bureau of Investigation (FBI) had issued a warning in November, against cybercriminals that are using Bitcoin ATMs and QR codes to defraud unsuspecting individuals. The FBI in a recently released Public Service Announcement (PSA), said that it has witnessed an increase in scammers directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions.

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