Over the previous five years, investors have lost more than $20 billion to cryptocurrency frauds. Rug pulls, a brand-new scam, accounted for about a third of the $7.7 billion lost in 2021. Losses of $2.8 billion were caused by examples of cryptocurrency founders emptying their enterprises of investment money and disappearing without a trace, according blockchain data company Chainalysis. Our data reveals that two recent rug grabs stood out in particular.
The OneCoin case, which made news when its creator, Ruja Ignatova, vanished in 2017 and a joint task force of Europol, German, and Bulgarian police raided the company’s headquarters in 2018, tops the list. OneCoin was a ponzi scheme that began in 2014, and its founder vanished in 2017. The range of estimated financial losses is between $4 billion to $15 billion. In accordance with a stricter definition of a rug pull, OneCoin wouldn’t necessarily make the cut as it was never traded publicly and was actually decentralized.
On the other side, the Turkish cryptocurrency exchange Thodex fits the definition of a rug pull perfectly. When his business was supposedly forced to shut down in April 2021 owing to cyberattacks, creator Fatih Faruk zer really made off with $2.6 billion in investor monies. When compared to the total market capitalizations and trading volumes of cryptocurrencies like Bitcoin and Ethereum, the remaining confirmed greatest rug pulls only total between $22 and $58 million. Despite their tiny size, these losses were devastating for many smaller-scale investors.
Businesses in the decentralized finance or DeFi area are desirable targets for hackers, scammers, and fraudsters due to its unregulated structure, even excluding coin inventors with evil intent. In total, Chainalysis estimated that over $14 billion in bitcoin transfers in 2021 were the result of illegal activities, with $3.2 billion of that total coming from thefts of digital currency. DeFi methods were used to acquire 72% of this stolen money.
Do also check out our chart section.
Follow us on twitter for update.