According to Solidus Labs, the crypto market integrity platform, fraudsters deployed more than 117,629 scam tokens on-chain in the first 11 months of this year. The figure represents a 41% increase from what was obtainable last year.
Solidus Labs noted in the inaugural report that there were 83,368 scam tokens in 2021, an over 5,000% increase from 2020, which was measly 1,548 projects. Interestingly, according to the research firm, 8% of the projects on the Ethereum network have Rug Pulled, and 12% of projects on the BNB Chain turned out fraudulent.
The report read in part: “Over the past five years, rug pulls have ballooned from a minor problem into a major epidemic, with scam token developers stealing billions of dollars from millions of retail investors. In our inaugural Rug Pull Report, we share original data, research, and case studies to help understand this emerging money laundering problem.”
Notably, the crypto community considers the rise and fall of Terraform Labs projects as the most significant rug pull in the Web3 industry. According to data from the market tracking website, CoinMarketCap, the utility token of the Terra Luna blockchain, LUNA, fell from its all-time high price of $119.18 to $0.00001675 within six weeks.
Concurrently, Terra Luna’s algorithmic stablecoin, TerraUSD (UST), which should exchange with the US dollar at a one-to-one ratio, lost its value from $1.05 to $0.006218.
Following the unprecedented collapse of the two Terra Luna projects, its founder Kwon disappeared from public view. And in September, a South Korean court declared him wanted for violating the country’s capital markets legislation.