“Rug pull” caused a loss of US $ 2.8 billion and became the biggest scam in the DeFi ecosystem.

Counted in volume, the scam is once again the biggest cryptocurrency crime, which has lost more than $ 7.7 billion in cryptocurrency to victims across the world.

Compared to 2020, scam revenue increased by 81%, but decreased compared to 2019. In 2021, Finiko reversed this trend, earning more than $ 1.1 billion from victims of the Ponzi scheme which focuses often over Eastern Europe. for

Another change that could lead to more fraud revenue in 2021 is the emergence of the stack draw, a new type of fraud particularly prevalent in the DeFi ecosystem (with the removal of cryptocurrency developer support , the deletion of the DEX liquidity pool, or the immediate termination of a project without notice to the investor). money taken away). Carpet rubs and Finiko Ponzi scams will be investigated in more detail later in the report. for

Scams are the biggest form of crypto crime, especially since they target new users, which makes them one of the biggest problems for the prosecution of cryptocurrencies. Some crypto companies have used blockchain data to protect users and take further steps to eliminate fraud before users cheat.

2021: Morale, the lifespan is shortening

In 2021, income from fraudulent assets increased, but at the same time fraudulent real estate deposits increased from 10.7 million to 4.1 million. The average of all casualties has increased.

But the crooks' money laundering strategies haven't changed much. As in recent years, most cryptocurrencies sent through scam sites will eventually end up in major exchanges. for

The number of deceit (information of information of fraud) has increased a range of 20,300 for 3,300 to 3,300 in 20.

It has to do with another difference that we have seen in recent years. In other words, the life expectancy of the fraud is getting shorter and shorter.

The average number of cryptocurrency fraud business days in 2021 is 70 days, less than 192 days in 2020. If you look closely, the average cryptocurrency fraud business days are 2,369 days and have declined since then. One reason is that administrative / police personnel have made progress in detecting and prosecuting fraud.

For example, in September 2021, the US Commodity Futures Industry (CFTC) filed a complaint against 14 industry scammers claiming to provide services based on crypto derivatives trading but not registered with the CFTC as a futures trader. . It is also a form of fraud in the crypto industry. Until then, these disappointments will last longer. When crooks discover the existence of a “threat” checker, they may be forced to “close the door” before they can attract the attention of authorities and police. for

At the same time, we can look at the end of the long term relationship between cryptocurrency prices and fraud.

Fraud often occurs as the value of popular cryptocurrencies (Bitcoin, Ethereum, etc.) continues, which remains the level at which new users enter the market. You can see it in the image below. After the cattle market in 2017 and 2020, the number of scams has increased. It's not surprising. New users interested in growing the cryptocurrency industry are more likely to get scammed than users realize.

However, the relationship between real estate and fraud seems to be fading now. If you look at the image below, you can see that the scam has increased with the value of Bitcoin and Ethereum, and by 2021 whether the price goes up or down, the scam remains stable and begins. even to drop.

Carpet rubs become the ultimate con artist

Pulling the rug is a foolest of defi ecosystem of the highest quality, and only 1% only 1% in 2020.

Additionally, in 2021, various carpet draw scams defrauded victims of cryptocurrency valued at over US $ 2.8 billion. for

As with many new concepts in the crypto industry, the concept of 'carpet draw' is not the same, but often means that the developer adds the even withdrawn crypto project to the DEX pool without notice or terminates. work immediately. finance. for

Pod downloads are mainly in DeFi. Most rugs want manufacturers to create new tokens and promote them to customers. The traders exchanged these new tokens for the "expectation of interest" which provided the proceeds of the project. However, the developer eventually withdraws money from the pool, the token value is zero, and then runs out.

The reason the carpet is so prevalent in DeFi is that crooks have some knowledge of blockchain technology. Creating new tokens on the Ethereum blockchain or other blockchain is inexpensive, easy, and can be used without any verification code. Exchanges are listed below on Decentralized (DEX).

The design of decentralized tokens allows investors to vote on issues such as how to use the assets of the pool while owning the tokens, thus preventing manufacturers from direct bribery. It's common in the crypto industry to have research companies that can help you find malicious code, but most DEXs can directly list new tokens, resulting in a lot of stack draws.

The image below shows 15 rugs scamming a stolen price in 2021. The popular Chinese squid game "SQUID" is only available in nine locations.

However, not all pools are in the DeFi arena. In fact, the biggest mat pool scam this year was Thodex, a major exchange in the middle that pretended to be Turkey, which its CEO sold out shortly after the exchange abandoned users. Together, the crooks spend over $ 2 billion on cryptocurrency, which is almost 90% of the value of all assets stolen during the draw.

AnubisDAO is the second largest withdrawal in 2021. Cryptocurrencies worth over US $ 58 million have been stolen. This scam is in the DeFi arena, so let's talk more about how it works.

Anubisdao was announced on October 28, 2021 and ready to give free waste. This activity does not have a website or a free sheet of paper that only has a logical logo like a dog call. And the developer support is still a fictitious name. Investors give almost 60 million pools games in the approximately 3,30 million, but only 20 times (usually disappeared at fluorescent. I'm gone to be a new address .

You can see these offers in the image above. AnubisDAO acquires wETH suppliers using agreements developed by the Balancer Liquidity Bootstrapping protocol. However, the location where the business contract is submitted is the controlling owner of the LP token provider in the pool. Twenty hours after the sale began, the site that created the pool sold a large portion of the LP tokens it held, allowing crooks to remove all wETH and project tokens from the pool. for

The scammer then "confused" the stolen assets by removing them from the wallet. Soon after, AnubisDAO's Twitter account was closed and the token's value dropped to zero.

AnubisDAO's data sounds like a warning to investors. Above all, do not exchange new tokens that have not been tested. Code verification is the process by which a third company reviews smart contracts after a new character or DeFi project. After inspection, he announces the contract according to the project and checks that the project does not have approved procedures for him. Manufacturers are stealing money from investors. . Buyers should be wary of unknowingly tokens (such as websites or giveaways) and tokens created by anonymous users. for

DeFi is one of the most exciting and innovative sites in the crypto ecosystem and offers great opportunities for early adopters. However, the ignorance of many traders presents an opportunity for the scammers. The point is, DeFi's development will be difficult to sustain unless new users can trust the new position. So what's important is the trust of important data in the crypto industry. Influencers, news agencies, or project developers, everyone should help. New users understand how to avoid scams. for

Pinico: Thousand Dollar Ponzi Scam

Finiko is a Russia-based Ponzi scheme that operates from December 2019 to July 2021. The project was halted after users learned they couldn't withdraw money from their accounts. Finiko has finally announced its own token which allows users to invest in Bitcoin or USDT and promises a monthly return of up to 30%, and can trade on multiple exchanges. for

During his 19-month tenure, Finiko earned over $ 1.5 billion in bitcoin on over 800,000 deposit accounts. Finiko sends most of these cryptocurrencies to major exchanges, high-risk exchanges, and portfolio management. It is currently unknown what he will do after leaving the post using cryptocurrency in Eastern Europe (Russia and Ukraine).

Like most scams, Finiko often deceives the victims, but at the same time, finds out that Finiko can help the launderers profit more. for

Money launderers receive millions of dollars in cryptocurrency from sites linked to ransomware, hackers and other criminals. Although the cost of sending to Finico is very low, less than 1 bitcoin, it shows that scams can also be used to launder money from other scams.

Finiko also sent $ 34 million to the DeFi protocol designed for interconnection through multiple intermediary wallets. This process can be converted to ERC-20 tokens and sent to another location.

More interestingly, Finiko has a history of cross-trading with Suex. Suex, a retail specialist, has been indicted by the United States Office of Foreign Assets Control (OFAC) for money laundering. In March and July 2020, Finiko sent over $ 9 million in bitcoin to Suex's office at OFAC. These links highlight the size of the Suex money laundering program and the important role these programs play in cybercrime law enforcement.

After the Pinico market collapse in July 2021, Russian police arrested two main fraudsters and sent an additional notice to members.

Fraud is a problem for many uses of cryptocurrencies by the general public, and police and authorities are compelled to oppose it. Crypto companies, financials and, of course, blockchain data analytics companies like Chainalysis should play a role. We expect the crypto industry to continue to grow.