• According to a report by blockchain analysis firm Chainalysis, nearly 25 percent of digital tokens introduced in 2022 were scams.
• These scams are called pump-and-dump schemes, where developers or executives of a crypto asset talk it up and get investors interested, then the price rises and they make off with the money.
• Chainalysis believes that these schemes hurt the reputation of the crypto industry and may prevent mass adoption.
Chainalysis: Most New Tokens in 2022 Were Fake
Crypto fraud has always been a problem, but a new report issued by blockchain analysis firm Chainalysis shows just what a big issue it’s become. According to the document, nearly 25 percent of the digital tokens introduced in 2022 were scams designed to make off with investor funds.
Several of the tokens analyzed in the Chainalysis report showed signs of being pump-and-dump schemes. This involves the developers or executives of a crypto asset talking it up and getting investors interested. From there, they plunk their money into the token after being subjected to fear of missing out (FOMO). Eventually, so many investors get involved that the price of the token in question rises to a top-of-the-line level. This is where things get hairy. The developers behind the asset see how much money’s been made. They stop minting the token, shut down