BNB Chain Dominates Q1 2023 Rug Pull Scams

In the first quarter of 2023, BNB Chain has been identified as the network with the highest percentage of rug pull scams, according to a report by blockchain security firm Immunefi. The report, titled “Crypto Losses in Q1 2023,” investigated a variety of crypto hacks and scams in the first quarter of the year. It found that BNB Chain saw 73.3% of all rug pulls in the crypto ecosystem, with Ethereum coming in second at 26.7%.

The report also revealed that BNB Chain and Ethereum were the two largest targets for hackers and scammers, accounting for 68.8% of total losses from these networks combined. Of these two networks, BNB Chain was hit the hardest, with 41.3% of total losses from hacks and scams.

One particular type of scam stood out on BNB Chain: rug pulls. This type of scam involves developers raising funds and then shutting down their project without delivering the promised product or service. According to Immunefi, BNB Chain saw 73.3% of all rug pull scams in the crypto ecosystem during Q1 2023.

The Immunefi report highlights the need for increased security measures in the crypto industry, particularly on BNB Chain. As the network continues to grow in popularity, it is likely that more hackers and scammers will try to exploit vulnerabilities in the system. This makes it essential for investors to remain vigilant and do their due diligence before investing in any crypto project.

While BNB Chain has faced its fair share of challenges in Q1 2023, it remains one of the most widely used networks in the crypto ecosystem. Its popularity can be attributed to its low transaction fees, fast confirmation times, and support for smart contracts. As the network continues to evolve and improve, it is likely that it will remain a dominant force in the crypto industry for years to come.

In conclusion, BNB Chain dominated Q1 2023 rug pull scams, accounting for 73.3% of all such scams in the crypto ecosystem. While this is certainly concerning, it is important to remember that the crypto industry as a whole is still in its early stages of development. As the industry matures, it is likely that new security measures will be implemented to prevent these types of scams from occurring in the future. In the meantime, investors should remain cautious and do their own research before investing in any crypto project, particularly on networks like BNB Chain that are more susceptible to scams and hacks.

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Scammers adapt to survive during crypto winter

In a recent crypto crime webinar, Eric Jardine from Chainalysis revealed how scammers adapt their strategies to changes in market situations. While overall crypto scam revenue dropped in 2022, Jardine noted that not all scams behaved similarly. By sub-classing scams into types, he found that scammers were adapting to market conditions and turning to other strategies, such as giveaway and romantic scams, to prey on people’s emotions.

Jardine’s data revealed that as investment scams become less effective, romance and giveaway scams become more prevalent, indicating that scammers are not simply using the same script over and over again. They can adapt and change depending on market conditions. Additionally, Jardine highlighted that a multilevel marketing scam called hyperverse took a massive chunk out of the $5.9 billion lost to scams in 2022, racking up around $1.3 billion, which accounts for roughly 22% of scam revenue in that year.

The rise of romance and giveaway scams during the crypto winter is not surprising as scammers often prey on people’s emotions during difficult times. These scams are designed to target people who are feeling vulnerable and in need of support. Giveaway scams often promise free tokens or coins in exchange for personal information, while romance scams involve scammers posing as potential partners to gain access to victims’ personal information or money.

It’s important to note that these scams are not exclusive to the crypto world and have been used by scammers for years. However, the crypto world provides scammers with a new platform to reach a wider audience and target people who are investing in digital currencies. As the market conditions change, scammers will continue to adapt and find new ways to deceive people.

Investors and consumers must remain vigilant and educate themselves on the latest scams and tactics used by scammers. Platforms and exchanges can also play a significant role in detecting and preventing scams by implementing robust security measures and educating their users. By working together, we can help to mitigate the risks posed by scammers and protect the integrity of the crypto industry.

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Hong Kong Suffers Surge in Crypto Scams in 2022

A large increase in the number of financial losses brought on by bitcoin scams has been seen in Hong Kong in the year 2022. According to reports from the local police, victims of cryptocurrency scams lost a total of HK$1.7 billion in 2018, marking a 106% increase from the previous year. In addition, the number of incidents of fraud using cryptocurrencies increased by 67 percent from 2021, reaching 2,336 cases. According to the Hong Kong police CyberDefender website, these scams were responsible for more than half of the HK$3.2 billion that was taken from citizens of the city as a result of technological crimes.

The growing usage of cryptocurrencies has made it increasingly difficult for authorities to trace the origin of monies obtained via illegal activity. Fraudsters are able to conceal their names, transactions, and ultimate destination thanks to the anonymity given by cryptographic currency transactions. Because of this, following the money trail left by criminals has become increasingly difficult for law enforcement.

The Cybersecurity and Technology Crime Bureau of the Hong Kong Police Force has provided some insights into the profile of a typical fraudster operating in the cryptocurrency industry. These con artists will claim to have extensive knowledge in the financial markets, particularly when it comes to crypto assets, precious metals, or foreign exchange goods. They often use bait to entice unsuspecting victims into downloading phony investing programs that display fictitious transactions and profits.

In order to differentiate its approach to cryptocurrency regulation from China’s total ban on cryptocurrencies, which will be implemented in 2021, the government of Hong Kong has gotten actively involved in the development of bitcoin infrastructure. The Securities and Futures Commission of Hong Kong issued a request for public comment in February on the updated proposed licensing framework for cryptocurrency exchanges, which is scheduled to go into force beginning in June 2023. Despite this, it is still very important to exercise extreme caution while investing in cryptocurrencies, as con artists continue to develop new methods to abuse the weaknesses of the market.

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Aussie Billionaire Files Criminal Case Against Facebook (Meta) for Running Illegal Crypto Ads

Fortescue Metals Group Chairman Andrew Forrest has filed a criminal case against Facebook in Australia for its failure to stop scam ads featuring his image. According to the Australian mining billionaire, this is the first time that Facebook is facing a criminal charge anywhere in the world.

“I’m doing this on behalf of innocent Australians who don’t have the resources to take on companies like Facebook,” Forrest said in his lawsuit.

Following Forrest’s criminal suit, the Australian Competition & Consumer Commission (ACCC) has reportedly started an investigation.

“While Dr. Forrest’s proceedings concern similar advertisements to those that the ACCC is investigating, the ACCC’s investigation is separate and concerns different questions of law. Dr. Forrest’s proceedings have been brought under the Commonwealth Criminal Code,” ACCC Chair Rod Sims told The Australian.

Forrest’s Lawsuit

Forrest alleged that fake crypto investment ads on Facebook used his image to claim that the mining billionaire endorsed certain investment schemes, and it resulted in many conned people. According to Forrest’s lawyers, Facebook “knowingly profits from this cycle of illegal ads,” and it amounts to a violation of anti-money laundering laws.

They also noted that Forrest had spent thousands of dollars since 2019 when these ads started appearing to dissociate himself from the false claims.

In an open letter in November 2019, Forrest asked Mark Zuckerberg to stop fake ads on Facebook featuring his face as an endorsement of the crypto investment schemes. But there was no appreciable change in the social media’s ad policy, and ads featuring celebrity testimonials continued to appear as sponsored posts. However, the Australian financial watchdog cautioned investors about fake crypto ads and sites with celebrity testimonials.

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Meta, the parent company of social media giant Facebook, offered a clarification without acknowledging Forrest’s lawsuit. It said, “We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community.”

Where is the Problem?

Social media companies often blame “cloaking” for dubious ads to bypass the checks. Cloaking is a process that lets scammers show different content when it’s being reviewed by social media filters, while the actual ad to run on the platforms could be different.

“I want social media companies to use more of their vast resources and billions of dollars in annual revenue to protect vulnerable people who are targeted and fall victim to these scams,” Forrest said in his lawsuit.

“Like Dr. Forrest, we consider that Meta should be doing more to detect, prevent, and remove false or misleading advertisements from the Facebook platform so that consumers are not misled and scammers are prevented from reaching potential victims,” Sims from ACCC said.

Earlier this week, Facebook’s parent company Meta revealed disappointing Q4 2021 results, leading to a substantial double-digit price decline of its shares in after-hours trading.

Featured Image Courtesy of The West Australia

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CZ Warns of a Massive Phishing Scam Targeting Binance Users

The CEO of the world’s leading cryptocurrency exchange has warned of a ‘massive’ SMS phishing scam that targets Binance users.

  • Tweeting on Friday, Changpeng Zhao, the CEO of the world’s leading cryptocurrency exchange – Binance – warned of a phishing scam campaign that’s targeting users of the exchange.

There is a massive phishing scam via SMS with a link to cancel withdrawals. It leads to a phishing website to harvest your credential as in the screenshot below. Never click on links from SMS… –  warns the executive.

  • This is the screenshot cited in the above:

img1_twitter
Source: Twitter


  • The CEO also reaffirmed that users should always visit the website through a bookmark or to type it in and never to use any shady links.

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Love Hurts: British Man Loses $200K in a Bitcoin Romance Scam (Report)

An anonymous UK resident reportedly parted with nearly $200,000 of his savings after a woman he messaged in a dating app conned him. The man admitted he felt so desperate after the scam that he considered taking his life.

‘In The Blink of an Eye, Everything Was Gone’

According to a recent coverage by BBC, the British citizen, called Tom (which is not his real name), was struggling with a break-up in 2020 and joined a dating application to look for companionship. Shortly after, a woman who introduced herself as Jia from Hong Kong approached him, and the duo started messaging.

Tom revealed that he and his online date were discussing their mutual future. Jia also portrayed herself as a successful cryptocurrency investor with “inside knowledge” and lured the man into dreaming of building a wealthy lifestyle with her.

“Issues were flagging up to me, but everything she was doing to build up trust with me was enough to keep me there,” the man admitted.

At one point, the woman asked Tom if he knew anything about bitcoin. The latter said he had invested in it a few years back. Then, Jia directed Tom to an online trading platform and instructed him to download the application on his mobile phone.

Once again, the British felt suspicious but at the same time lucky as he seemed to have met someone with “insider information” who could possibly make him rich. The woman encouraged Tom to keep making investments on the dubious app, telling him he would miss out on profits if he were not quick enough. The man ended up investing around $200,000 when he found out that his balance “had been cleared.”

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“In the blink of an eye, everything was gone. I was sick to my stomach,” he confessed.

He asked Jia to explain the missing funds, but the woman refused to help, saying she had to fly to Australia and spend time with her sick aunt. At that point, Tom realized he had become a victim of a cryptocurrency scam. Feeling devastated, he searched for help and admitted that if it was not for his mother, he might have taken his life:

“I recognized I needed help straight away and went straight round to see my mum. If I didn’t have that support, I wouldn’t be here. I was going to do something that wouldn’t leave me here anymore.”

The Australian Nurse Who Lost Her Life Savings

Tom is not the first individual to have his funds drained via a fraudulent cryptocurrency scheme.

Last year, CryptoPotato reported that the Australian citizen Rhonda, who was just months away from retirement, became a victim of a similar scam. She was approached by a person claiming to be a local celebrity who asked her to start investing in bitcoin in a dubious application.

In the next several months, Rhonda made several investments which totaled all her lifestyle savings. Unfortunately, upon checking her account at one point, she noticed that all the funds had gone missing.

The local authorities tried to help her, but the operation failed. Despite realizing that her retirement plans were gone, Rhonda stayed positive and said she would continue working as a nurse.

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String Of Crypto Youtubers Hacked With “One World Cryptocurrency” Video

Earlier this morning, a mysterious video called “One World Cryptocurrency” was posted across numerous popular crypto/ finance YouTube channels – without the owners’ permission. The video has all the appearances of a giveaway scam.

“One World Cryptocurrency”

The minute-long video features promotion of a supposedly new BSC token called “One World Cryptocurrency” (Ticker: OWCY). It features a “contact address”, and a listed pre-sale price of “0.0001’ (no unit of account was given).

It then lists a number of cryptos through which “investors” can allegedly buy the token, including USDT, USDC, BNB, and ETH. It claims that OWYC will be listed on both CoinMarketCap and CoinGecko – neither of which have done so yet.

BSC and Ethereum addresses were provided for purchasers to buy the new coin. According to BscScan and EtherScan, neither address has pulled in more than a few hundred dollars thus far.

Giveaway scams are rampant in the crypto space, thanks to the potential for anonymity and irreversibility that blockchain transactions provide. These same properties have also made them popular tools for ransomware attacks. Others have been far more lucrative as well, with a fake Michael Saylor giveaway scam netting $1.1 million last week.

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YouTubers Get Hacked

Numerous Twitter users reported the video having randomly appeared in their YouTube feeds from unexpected posters. One of these was Coin Bureau, a crypto-focused YouTuber with nearly 2 million subscribers.

“So our YouTube channel was just hacked,” he told his followers in a tweet. “Unless someone physically had a security key, I have no idea how they got access…”

The creator claimed that all of his accounts were secured with strong passwords and security keys, and called upon YouTube to address the issue.

Arun Maini (aka Mrwhosetheboss) – a tech YouTuber with over 9 million subscribers – was also impacted. “I think someone got into my YouTube account and posted something,” he said this morning. A screen recording shows that it was the OWCY video. He also requested that YouTube fix the problem, noting that he hadn’t even received a notification that a video was posted to his channel.

Dozens of other YouTubers were affected, including Real Vision, Ivan on Tech, and Bitboy Crypto. Most have since removed the video from their channels.

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Chinese Authorities Crack Rug Pull Scam, Arrest 8 Individuals

The public security bureau of Chizhou city in the eastern province of Anhui has frozen six million yuan or nearly $1 million worth of crypto assets and arrested eight people for defrauding its investors since last year.

Rug Pull Crypto Scam

Chinese authorities have arrested eight in a rug pull scam involving 50 million yuan or $7.8 million in digital assets as the Beijing crackdown continues. The report suggested that several investors were duped in a scheme that let the alleged perpetrators transfer the liquidity to an “anonymous pool,” thereafter laundering the funds without investors’ consent.

It all started after an investor reported a loss of 590,000 yuan or $92,882 worth of cryptocurrency in June 2021. After conducting a thorough investigation, the Chizhou police arrested eight people from different provinces, including Guangdong, Sichuan, and Hunan, in December. The police also seized luxury cars and villas from the accused, who allegedly swindled money from investors.

Talking about the case, the Chizhou authorities wrote,

“After the investigation and analysis by the police task force, it was found that this case was a typical case of illegally obtaining virtual currency by using blockchain technology.”

The police have not yet mentioned the name of the malicious DeFi project, but Chinese crypto-journalist Colin Wu reported the platform to be GainSwap.

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Rug pulls have become a common occurrence in the crypto industry. As reported earlier, they accounted for 37% of all scam revenue in 2021 as opposed to just 1% the previous year.

The latest news comes less than a week after the Chinese law enforcement agency disclosed solving 259 cases related to cryptocurrency money laundering. The Ministry of Public Security also reportedly seized cryptocurrencies worth 11 billion yuan, or nearly $1.7 billion.

High-profile CBDC

China’s opposition to cryptocurrencies isn’t new. Hence, the policymakers have taken the CBDC route, in sharp contrast to assets such as Bitcoin and Ethereum.

Despite being developed since 2014, the People’s Bank of China (PBoC) is yet to fully implement the digital renminbi nationwide. In a bid to increase adoption, the central bank has dispersed tens of millions of the tokens. CBDC pilot projects have also been unveiled in 10 regions, including Shanghai and Beijing. These steps have led to transactions crossing the $1 billion mark.

Earlier this month, Chinese technology behemoth Tencent announced adding support for the country’s CBDC to its WeChat Pay wallet, one of mainland China’s prominent payment platforms.

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BTC Worth $1.1 Million Sent to a Confirmed Michael Saylor Giveaway Scam

A confirmed scam address impersonating MicroStrategy’s Michael Saylor has received over $1.1 million in bitcoin in January alone. The CEO of the NASDAQ-listed company later revealed that his team reports such addresses almost constantly but to little-to-no avail.

  • Impersonating scams in the crypto industry are a growing threat in which the perpetrators pretend to be a famous person from the community and offer to double all BTC that users send to their wallets.
  • Needless to say, all BTC that is actually transferred to the scammers’ addresses are lost, and the victim does not receive anything in return.
  • Although these scams sound too good to be true, people continue to fall victim quite frequently in the hope of free money.
  • Michael Saylor, the CEO of the company that owns the most BTC and a personal HODLer himself, is frequently impersonated.
  • The latest example came during the weekend as Whale Alert reported one address confirmed to be a Saylor-impersonating scam.
  • Although it has been active for less than a month (January only), the wallet has attracted more than $1.1 million worth of bitcoin, which goes on to show the danger of such scams.
  • MicroStrategy’s CEO commented on Whale Alert’s post later on, indicating that nearly 500 such scams went live on YouTube in just one week.
  • He said his team continues to report them “every 15 minutes, and they are taken down after a few hours,” but they continue to pop up frequently.


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Peckshield Reveals Over 50 Potentially Dubious Projects on Binance Smart Chain

In yet another concerning development, the prominent blockchain security firm, Peckshield, revealed looking into more than 50 potentially dubious projects on Binance Smart Chain(BSC).

Rug Potentials on Binance Smart Chain

Rug pulls were a frequent occurrence in the crypto space in 2021. In this kind of scam, developers of a DeFi project abandon it unexpectedly and siphon off with user funds. Binance Smart Chain was one of the badly hit DeFi platforms which lured numerous malicious actors since its inception.

In the latest development, Peckshield revealed detecting more than 50 tokens with “rug-potentials” on BSC. The blockchain security company alerted the community that the admins behind the mentioned tokens can potentially mint unlimited tokens, restrict users from selling the coins and even blacklist any accounts.

The tokens at risk, as mentioned on Peckshield’s list, are operated by anonymous teams, and the firm has deemed all the projects as “medium” in terms of severity.


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Rug Pulls in 2021, What’s Next?

The monumental year of 2021 witnessed rug pulls become one of the most utilized scams of choice. According to a report by the blockchain firm, Chainalysis, these rug pulls accounted for 37% of all scam revenue last year compared to only 1% in 2020.

There are two major reasons why rug pulls became so common. One was the initial hype surrounding the DeFi space and the subsequent FOMO. Next up – the technical skills required to develop tokens and get them listed on exchanges, many of which were done without a proper analysis of the smart contract’s code by a third party.

But this trend may not continue in 2022. Going forward, Chainalysis believes crypto-related crimes may decline as law enforcement’s ability to fight these scams evolves. It recently stated that increased legitimate crypto usage is “far outpacing the growth of criminal usage.”

In fact, the firm noted that illicit activity’s share of crypto transaction volume has never been lower. Its report on the same revealed that “crime is becoming a smaller and smaller part of the cryptocurrency ecosystem.”

The team also mentioned that one positive development against these crimes is the growing “ability of law enforcement to seize illicitly obtained cryptocurrency.” For instance, IRS Criminal Investigation seized more than $3.5 billion worth of cryptocurrency in 2021.

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Bitcoin (BTC) $ 27,092.26 1.05%
Ethereum (ETH) $ 1,886.60 1.70%
Litecoin (LTC) $ 95.33 4.35%
Bitcoin Cash (BCH) $ 114.70 1.64%