Crypto Scammers Rip Off Billions as Pump-and-Dump Schemes Go Digital
Bloomberg.com
Billions are getting pilfered annually through a variety of cryptocurrency scams. The way things are going, this will only get worse.
So far this year, over $2.6 billion has been grabbed, according to Chainanalysis, a New York-based blockchain researcher. That figure doesn’t include a giant Ponzi scheme that just came to light in South Africa. Local authorities put the haul at $3.6 billion worth of Bitcoin. Gob-smacking as all of this might sound, these numbers in fact represent a marked decline from 2019, when fraudsters walked away with an estimated $9 billion.
The old pump and dump today is known as the rug pull.
“Everybody I know has gotten rug-pulled,” says Titus, a 38-year-old butcher in Salem, Oregon. “You know, you win some, you lose some. Hopefully, win more than lose.”
The rug pull is only one play. There’s also the gentler soft rug, the crypto version of getting ghosted on Hinge. And the honey pot, which functions like a trap. Old-fashioned Ponzi schemes, newly cryptodenominated, have swindled people out of billions too.
“People have a fear of missing out on the next big thing, so they’re just dumping money here and there."
Tokensniffer functions a bit like a virus scanner looking for malicious code patterns. A “smell test” program searches for vulnerabilities. Clones of existing meme tokens are often a red flag. Most recent scams — the site flagged 450 in in one recent 30-day period — were honeypots. Those tend to be easier to spot because of their code, Tokensniffer’s creator says. Rug pulls are more complicated.
Read more at Bloomberg
