As exciting and innovative as the DeFi space is, bad actors creating worthless tokens have continued to wreak havoc and impede adoption.
In yet another concerning development, the prominent blockchain security firm, Peckshield, revealed looking into more than 50 potentially dubious projects on Binance Smart Chain(BSC).
Rug Potentials on Binance Smart Chain
Rug pulls were a frequent occurrence in the crypto space in 2021. In this kind of scam, developers of a DeFi project abandon it unexpectedly and siphon off with user funds. Binance Smart Chain was one of the badly hit DeFi platforms which lured numerous malicious actors since its inception.
In the latest development, Peckshield revealed detecting more than 50 tokens with “rug-potentials” on BSC. The blockchain security company alerted the community that the admins behind the mentioned tokens can potentially mint unlimited tokens, restrict users from selling the coins and even blacklist any accounts.
The tokens at risk, as mentioned on Peckshield’s list, are operated by anonymous teams, and the firm has deemed all the projects as “medium” in terms of severity.
#Scam PeckShield has detected 50+ tokens with rug-potentials. The community may want to be aware before interacting:
· Admin can mint unlimited tokens
· Admin can restrict token selling
· Admin can blacklist any account@bsc_daily #BSC Here is the list:https://t.co/6mBp2HX6Hm pic.twitter.com/fYJAMAPs7H
— PeckShieldAlert (@PeckShieldAlert) January 13, 2022
Rug Pulls in 2021, What’s Next?
The monumental year of 2021 witnessed rug pulls become one of the most utilized scams of choice. According to a report by the blockchain firm, Chainalysis, these rug pulls accounted for 37% of all scam revenue last year compared to only 1% in 2020.
There are two major reasons why rug pulls became so common. One was the initial hype surrounding the DeFi space and the subsequent FOMO. Next up – the technical skills required to develop tokens and get them listed on exchanges, many of which were done without a proper analysis of the smart contract’s code by a third party.
But this trend may not continue in 2022. Going forward, Chainalysis believes crypto-related crimes may decline as law enforcement’s ability to fight these scams evolves. It recently stated that increased legitimate crypto usage is “far outpacing the growth of criminal usage.”
In fact, the firm noted that illicit activity’s share of crypto transaction volume has never been lower. Its report on the same revealed that “crime is becoming a smaller and smaller part of the cryptocurrency ecosystem.”
The team also mentioned that one positive development against these crimes is the growing “ability of law enforcement to seize illicitly obtained cryptocurrency.” For instance, IRS Criminal Investigation seized more than $3.5 billion worth of cryptocurrency in 2021.