Crypto Crime Unveiled: More than $20 Billion Lost to Rug Pulls and Scams

<p>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.</p><p>According to the data
recently released by <em>Comparitech</em>, 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. </p><h1>Rising Hybrid Scams</h1><p>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, reaching a staggering USD $8.4 billion.</p><figure data-media-><a href="https://www.financemagnates.com/" target="_blank" rel="follow"><img src="https://images.financemagnates.com/images/Scams%20and%20rug%20pulls_id_28e53f7f-7a3e-403e-a453-056843828dd7_original.jpg" width="1200" height="911" wrapper-="wrapper-" data-src="https://images.financemagnates.com/images/Scams%20and%20rug%20pulls_id_28e53f7f-7a3e-403e-a453-056843828dd7_original.jpg" /></a></figure>However, the amount of
losses has steadily declined in 2023. According to a report by , the amount lost to crypto hacks and exploits in the second quarter . This
compares to USD $715 million lost during the same period of the previous year.<p>While the overall
landscape is showing signs of improvement, one concerning trend is emerging:
the surge in exit scams. According to a report by <em>Certik</em>, 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.</p><p>Additionally, by
breaking down the data, it becomes evident that certain <a href="https://www.financemagnates.com//">blockchain</a> 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.</p><h2>Exit
Scams and Exploits </h2><p>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 <a href="https://www.financemagnates.com/cryptocurrency/hacking-incidents-shake-the-crypto-world-how-bitcoin-stands-strong/" target="_blank" rel="follow">decentralization,
proof-of-work consensus</a>, and
the <a href="https://www.financemagnates.com//">immutability</a> of the blockchain have enabled it to weather the storms of
hacking attacks.</p><figure data-media-><img src="https://images.financemagnates.com/images/Amount%20Stolen%20at%20Time%20of%20Theft%20by%20Year%20%28USD%29_id_7434d6db-8cf9-4446-b143-5f7e34a498d2_original.jpg" width="1200" height="911" wrapper-="wrapper-" data-src="https://images.financemagnates.com/images/Amount%20Stolen%20at%20Time%20of%20Theft%20by%20Year%20%28USD%29_id_7434d6db-8cf9-4446-b143-5f7e34a498d2_original.jpg" /></figure>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.<p>As of July, exploits,
exit scams, and flash loan attacks had <a href="https://www.financemagnates.com/cryptocurrency/crypto-hacks-and-exploits-peak-year-to-date-in-july-report/" target="_blank" rel="follow">drained
USD $580 million</a>, 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 to
July have surged to USD $961 million.</p>

This article was written by Jared Kirui at www.financemagnates.com.