almost 10,000 tokens were used in Pump & Dump schemes


In 2022, crypto investors poured $4.6 billion into the purchase of tokens allegedly part of Pump & Dump schemes. This is stated in the report Chainalysis.

The organizers of the “pump and dump” schemes create hype around the asset in order to attract investors, while they themselves secretly sell their stake at inflated prices.

Analysts have determined that more than 9,900 tokens launched on networks BNB Smart Chain and Ethereum last year were created only to carry out such fraudulent activities.

The most “prolific” in the application of the scheme was an unnamed company that issued 264 such tokens.

Chainalysis considered an asset as a potential Pump & Dump if it had a minimum of 10 swaps and four consecutive days of trading on DEX. Of the 1.1 million new tokens issued in 2022, more than 40,500 meet these criteria.

If the price of a token from this group fell by 90% or more in the first week, Chainalysis considered this an additional factor confirming its use in Pump & Dump. The firm found that 24% of the 40,500 coins analyzed met the secondary criterion.

Chainalysis: Nearly 10,000 Tokens Used in Pump & Dump Schemes
Analytical breakdown and number of suspected fraudulent tokens. Data: Chainalysis.

Chainalysis estimates that 445 people or groups are behind the analyzed fraudulent tokens, indicating that they are launching several projects at once. Their combined profit from the sale of their assets was $30 million.

“It is possible that in some cases, token issuers did their best to form a healthy supply, and the subsequent price drop was due to other market conditions,” the firm added.

At the same time, in separate report The analytics firm noted that cryptocurrency fraud revenues have shrunk by almost half in 2022, largely due to falling digital asset prices.

Recall that in September 2022, crypto investor and blogger Lark Davis was accused of repeatedly participating in Pump & Dump schemes.

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