Leading Research Firm Says Most Crypto Scams Are on Binance Chain

Leading Research Firm Says Most Crypto Scams Are on Binance Chain.

The company disclosed that the vast majority of these scams are not reported.

Solidus Labs, a cryptocurrency risk monitoring platform, released shocking details about the hike in crypto scams. According to a research report published by Solidus Labs, at least 12% of all BEP-20 tokens (tokens on Binance Chain), exhibit scam features. Solidus Labs noted that 8% of ERC-20 tokens, built on the Ethereum network, are also tied to scams.

The research company did not disclose why crypto scammers prefer the Binance chain as their favorite network. It is worth mentioning that it is easier for scammers to launch fraudulent tokens on BNB Chain because it is a public permissionless blockchain. The other thing is that scammers mostly use the Binance name in their partner list when the tokens are based on the Binance chain.

More Shocking Details

Interestingly, the research firm said an average of 15 new crypto scams are deployed hourly on different blockchains. The recent research aligns with comments made by Dogecoin co-founder Billy Marcus, who said 95% of all cryptocurrencies are scams.

Solidus said as of October 10, 2022; it spotted a total of 188,525 smart contract-related scams across 12 blockchains, including Polygon, BNB Chain, Ethereum, etc.

Unfortunately, most of these scams are not reported, as only the significant ones make the news, Solidus added. Furthermore, the cryptocurrency monitoring platform said since August 2020; it has flagged nearly 200,000 rug pulls and decentralized finance (DeFi) scams.

Kathy Kraninger, Solidus’ Vice President of Regulatory Affairs, said:

“While some of the big rug pulls and scams make the news, like the famous Squid Games Token that’s estimated to have cost users around $3 million in lost funds, the full picture stemming from our data shows the vast majority of these scams go unnoticed.” 

Malefactors Move Over $910M Stolen Funds to Centralized Exchange 

Since many of these scams are perpetrated without making the news, these malefactors find it easy to move the ill-gotten funds to centralized exchanges without being caught. The research firm estimates that at least $910 million of cryptocurrencies stolen from the Ethereum network are transferred to centralized exchanges. 

Although not all crypto scams are reported, the few that make it to the news reveal how scammers cart away hundreds of millions of dollars via digital currency heists. Earlier this month, hackers exploited the BNB Chain and stole a whopping $100 million.