Crypto Space Needs To Alleviate These Challenges In 2022! What Traders Need To Be Cautious Of?

Crypto town has seen manifold twists and turns throughout 2021. The volatility in space had created many millionaires overnight. However, the same has also been imparted to the rising number of cryptocurrency scams. Along with Ponzi schemes, rug pulls are the new emergence which alone has generated billions of scams of revenue. 

Metrics Reveal Emergence in New Crypto Scams!

Chainalysis, a popular crypto metric platform has reported a meteoric rise in crypto scams up to 81% costing a whopping $7.7 billion scam revenue. In contrast to 2020, there has been a dramatic ramp-up in Ponzi schemes and other money laundering scams along with the emergence in rug pulls. 

A Billion-Dollar Ponzi Scam in 2021  by Finiko!

The year 2020 was brilliant with no significant large-scale Ponzi schemes and rug pulls. In contrast, the ongoing year has witnessed scams in billions. Finiko has emerged as the billion-dollar Ponzi scheme in 2021 which has snatched about $1.1 billion from victims.

The financial company had initially invited traders to invest with their Bitcoin or Tether assuring returns of up to 30% every month post-investment. Further, the platform has remained active for 19 months receiving over $1.5 billion worth of Bitcoin from 800k individual deposits. Later, the company was collapsed after traders realized they could no longer drawback amount from their holdings with the platform. 

Rug-Pulls Are New Innovation of Crypto Scam!

Rug-pulls are gradually evolving as the go-to scam of the crypto space with an abrupt jump from 1% in 2020 to 37% of all crypto scam revenue in 2021. However, in 2021 alone, rug pulls over the year have snatched a whopping $2.8 trillion worth of crypto from victims. 

Chainalysis has reported top 15 rug pulls by cryptocurrency value stolen from victims. Notably, Thodex, AnubisDAO, Uranium finance, DeFi100 experienced rug pulls worth in millions. Thodex, the biggest rug pull of 2021 at over $2600 million worth of cryptocurrency stolen. Meanwhile, AnubisDAO, Uranium finance recorded a loss of $58.3 and $50 million USD respectively. 

Collectively, despite the record-breaking scams in 2021, they were clearly short-lived. However, traders need to be cautious before they come across any such Ponzi schemes or suspicious projects. The crypto space is anticipated to expand its pointers to large-scale mainstream industries in 2022, hence thorough research prior to investment is mandatory. Many crypto exchanges are already putting efforts to prohibit users from such suspicious trades. 

Photo of Mustafa Mulla
Photo of Mustafa Mulla
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