24% of cryptocurrencies were used for price manipulation in 2022 – Chainalysis

Chainalysis, an analytics firm that tracks cryptocurrency transactions, has shared data another study. The company’s specialists concluded that signs of a pump-and-dump scheme (pumping and dumping) were observed in 24% of tokens launched in 2022.

The pump-and-dump scheme involves a manipulative increase in the rate of the cryptocurrency, followed by a sharp collapse. It is designed to cause a short-term explosion of interest in the asset among potential investors. After the asset rises enough in price, the project creators sell their assets and accumulate profits, while the price of the token falls sharply. As a result, investors are left with wallets full of useless cryptocurrencies, and token creators with a lot of money.

A Chainalysis report says that more than 1.1 million new tokens have been launched on the Ethereum and BNB Chain networks. Of these, 40,521 tokens gained enough popularity for analysis. Moreover, the price of 9,902 tokens (24% of those that were more or less successful in the first days after launch) decreased significantly in the first week after launch, showing clear signs of a pump-and-dump scheme. A price drop of 90% or more is a clear sign that token creators have gotten rid of their own supply of tokens very quickly.

In addition, the study showed that the victims of pump-and-dump schemes spent $4.6 billion on worthless tokens. And the creators allegedly made a profit of $30 million after the sale of their assets.

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