As crypto assets gain popularity, crypto scams are also on the rise – over $7.7bn (£5.7bn) worth of cryptocurrency was stolen from victims worldwide in 2021, new data revealed.
Chainalysis, a blockchain data firm, said scams were the largest form of cryptocurrency-based crime by transaction volume and there has been an 81% rise in these when compared with 2020.
2020 saw scamming activity dropped significantly compared to 2019, in large part due to the absence of any large-scale Ponzi schemes.
But chat changed in 2021 with Finiko, a Ponzi scheme targeting Russian speakers throughout Eastern Europe, netting more than $1.1bn from victims. It invited users to invest with either bitcoin (BTC-USD) or tether, promising monthly returns of up to 30%.
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Another change that contributed to 2021’s increase in scam revenue was the emergence of ‘rug pulls’.
These are particularly common in the DeFi ecosystem and includes developers of a cryptocurrency project — typically a new token — abandon it unexpectedly, taking users’ funds with them.
The biggest rug pull of the year centered on Thodex, a large Turkish centralised exchange whose CEO disappeared soon after the exchange halted users’ ability to withdraw funds. Users lost over $2bn worth of cryptocurrency
Another recent example of this was when a crypto currency inspired by the hugely popular South Korean Netflix…