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Revealed: History’s 10 most enormous crypto rug pulls

Revealed: History’s 10 most enormous crypto rug pulls

Revealed: History’s 10 most enormous crypto rug pulls

For years, the cryptocurrency sector has come under fire for harboring scams that have resulted in massive losses for users, with the FTX exchange crash emerging as the latest high-profile incident. In this case, the new data highlights the scale of cryptocurrency fraud. ‘Impact on users as bad players employ new means to cheat unsuspecting investors. Notably, cryptocurrency-related scams have cost users more than $20 billion over the past five years, with new tricks emerging among notable tricks used by scammers, new data from crypto analytics platform Chainalysis shows. For example, in 2021, cryptocurrency fraud resulted in approximately $7.7 billion in losses, and rug pulls accounted for $2.8 billion in losses. Specifically, a rug pull can be defined as a cryptocurrency developer who abandons a project or token, uses up all funds, and disappears.

Leading rug pull incidents

Notable incidents include the OneCoin case, where users lost between $4 billion and more than $15 billion. It is worth noting that the incident does not fully qualify for a rug pull, as the coin in question was never publicly traded or decentralized. Additionally, Turkish crypto exchange Thodex’s scam made headlines in 2021 when the platform’s founder walked away with $2.6 billion in investor funds. Interestingly, the owner of Thodex, Faruk Özer, had claimed that the exchange suffered a cyber-attack.

As reported by Finbold, Özer was arrested in Albania after disappearing with funds from around 400,000 users. Other projects that represent significant losses are AnubisDAO ($58 million), Uranium Finance ($50 million), DeFi100 ($32 million), Meerkat Finance ($31 million), Snowdog DAO ($30 million) and StableMagenet ($22 million).

Elsewhere in 2021, the market has also been impacted by the appeal of the Squid Game (SQUID) cryptocurrency mat. The token, related to the famous Korean series Netflix (NASDAQ: NFLX), plunged to near zero in minutes, days after posting significant gains. At the same time, the Ethereum Max token (EMAX) also followed the same course, falling in value to near zero as regulators cracked down on some of the asset’s promoters, including socialite Kim Kardashian. They were lost between $22 and $58 million, devastating small users.

DeFi protocols exploitation

In addition, due to the unregulated nature of cryptocurrency sectors, cryptocurrency companies using decentralized finance (DeFi) platforms have also been targeted by scammers. As a result, in 2021, more than $14 billion in cryptocurrency transactions were linked to unlawful activities. Cryptocurrency thefts accounted for $3.2 billion of illegitimate transactions, and 72% of the stolen funds were recovered from DeFi protocols. It is worth noting that fraud is the main reason why crypto skeptics are pushing for a total ban on the sector.

In this vein, Charlie Munger, Vice President of Berkshire Hathaway (NYSE: BRK.A), recently denounced cryptocurrency as a “bad mix” of “part fraud and part deception” and “a currency good for hijackers.”

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