Nearly 10,000 tokens launched on BNB and Ethereum last year are suspected to have been created just to dump on investors, according to Chainalysis.
Cryptocurrency investors funneled as much as $4.6 billion into crypto tokens suspected to be part of “pump and dump” schemes in 2022.
A Feb. 16 report from blockchain analytics firm Chainalysis “analyzed all tokens launched” in 2022 on the BNB Smart Chain and Ethereum blockchains and found thatover 9,900 bore characteristics of a “pump and dump” scheme.
A pump-and-dump scheme typically involves the creators orchestrating a campaign of misleading statements, hype, and Fear Of Missing Out (FOMO) to persuade investors into purchasing tokens while secretly selling their stake in the scheme at inflated prices.
Chainalysis estimated investors spent $4.6 billion worth of crypto buying the nearly more than 9,900 different suspected fraudulent tokens it identified.
The most prolific purported pump and dump creator Chainalysis identified — who was not named — is suspected of single-handedly launching 264 such tokens last year, with the firm explaining:
“Teams launching new projects and tokens can remain anonymous, which makes it possible for serial offenders to carry out multiple pump and dump schemes.”
Source : [Crypto investors spent $4.6B buying ‘pump and dump’ tokens last year](cointelegraph.com/news/crypto-investors-spent-4-6b-buying-pump-and-dump-tokens-last-year) by Cointelegraph By Jesse Coghlan - 24% Tokens Last Year 2022•39Cointelegraph by Cointelegraph By Jesse Coghlan / February 17, 2023