PeckShield, a data analytics and blockchain security company, revealed the names of 52 projects on Binance Smart Chain susceptible to a “rug pull” scam.
Suspected Projects Named by PeckShield
Some of the projects named by the crypto firm include Amazon, BabySquid, Astrocoin, CryptoGuards, CryptoHero, DEEPtoken, FIFA, YourTokenName, FLOKIPLAY, etc. The list also includes the contact addresses of these crypto projects and indicates the risk severity of each project. The report noted a centralization issue across all these projects. It increases the risk of rug pull scams. Administrators of these projects have the power to mint any number of tokens. They can restrict others from selling their tokens. The admin can blacklist an account and bar its owner from trading. These risks undermine the decentralization concept of blockchain projects.
Crypto Rug Pull
This fraud involves getting investors to invest but making it difficult for them to trade, move or withdraw their assets freely. The fraud operator creates crypto projects where investors do not have much control over their funds. They are lured into investing in these projects with the promise of high returns. Once enough fund is collected or it becomes clear the scam will be exposed, the fraudster abandons the project and runs away with all funds. This scam has caused massive losses to crypto investors in 2021 and accounted for more than 37% of all crypto scams.
DeFi projects have lost more than $1 billion in 2021 through 44 hacks, according to a report by CertiK, a blockchain security company. The company noted that DeFi saw strong growth in the last year. The importance of blockchain security has increased due to increased risks to blockchain gaming and NFTs that have gained wide popularity in recent times.