It unfortunately remains to this day one of the most painful points the crypto market as a whole has to get over; the existence of countless scam coins not only damages the reputation of the entire industry, but many crypto investors sometimes see their hard-earned money go up in smoke in this way. Despite the market starting to mature, more than 100,000 new scam coins were created in 2022.
Scam crypto coins especially on BNB Chain and Ethereum
Blockchain risk monitoring company Solidus Labs has investigated how many scam coins actually came into circulation this year. According to them Back Pull Report from 2022, it appears that no fewer than 117,629 scam tokens appeared. That is an increase of at least 41% compared to the previous year.
According to Solidus Labs, most scam coins are hiding on the BNB Chain. In fact, the report states that as many as 20% of all projects on the BNB Chain are fraudulent in nature. It is in second place Ethereum (ETH) network, with 8% of ERC-20 tokens being nothing more than scams according to Solidus.
Back pulls and honeypots
In many cases these are so-called back pulls. These are scams where the founders of the token aim to attract as many investors as possible through the promise of huge price increases and then the founders dump all the tokens, often driving the price all the way down to $0.
The most popular scam, according to Solidus Labs, remains the honey pot. Here too, investors are lured with nice promises, but once they have entered it is no longer possible to sell the tokens. In the end, the founders leave the project and make off with all the money. The most famous example of such a scam was Squid Game (SQUID).
According to Solidus Labs, as many as 2 million crypto users will have lost money to scams by 2022. That number is greater than all the people affected by the recent declines of companies such as ftx, Celsius and Voyager Digital. In total, according to Solidus Labs, only 1.8 million people lost money here.