Solidus Labs’ 2022 Rug Pull report reveals that 8% of all Ethereum (ETH) tokens and 12% of all BNB chain tokens are rug pull scams.
This report considers data from January 1st to December 1st, 2022 and shows that over $11 billion in ETH transactions were either directly linked to fraudulent tokens or involved in a lag-pull money laundering process. We also detected that
This data leads to the estimate that 8% of all Ethereum tokens are programmed to perform lag pull.
A report evaluating exposure to these fraudulent tokens also revealed that BNB Chain hosts the most fraudulent tokens, with 12% of all BNB Chain tokens being fraudulent.
117,629 fraud tokens in 2022
The report acknowledges that industry research has identified 24 lag pulls in 2021 and 262 in 2022. However, Solidus Labs’ smart contract scanning tool, Threat Intelligence, has identified over 200,000 of his fraudulent tokens deployed between September 2020 and December 2022.
Threat Intelligence detected 83,268 fraudulent tokens between January 2021 and December 2021. This number rose to 117,629, marking a 41% jump in the first 11 months of 2022.
Bigger impact than FTX
Solidus Labs also compared the impact of these fraudulent tokens to major events in 2022, such as the collapse of Terra (LUNA), which kicked off the bear market, and the impact of FTX.
As a result, we found that 1.93 million investors lost their funds due to token fraud. This is more than the number of investors affected by the Terra and FTX collapses combined.
Aside from the impact of fraud tokens, the FTX collapse had the biggest impact on the industry, affecting over 1 million investors. The bankruptcies of Celsius and Blockfi followed the second and his third, affecting 600,000 and his 572,000 investors respectively.
Given the importance of these numbers, Terra’s collapse almost looks like a minor crisis, as it affected nearly 40,000 investors.
According to reports, 99% of these fraudulent tokens were not detected using traditional approaches. These scams preferred to deploy on centralized exchanges (CeFi), depositing and withdrawing funds from 153 different CeFi platforms.
The report also provides a breakdown of the exchanges in question. Data shows that US-based CeFi exchanges have the highest exposure to fraudulent tokens at around $375 billion.
East African country Seychelles is second with just over $2 billion, and the Bahamas is third with $500 million.