A recent report from blockchain security firm Beosin has revealed that losses resulting from rug pulls and exit scams in the cryptocurrency market surpassed those from decentralized finance (DeFi) hacks in May. Six incidents of rug pull and scams amounted to over $45 million in total losses, while 10 attacks on DeFi protocols only netted $19.7 million. This decline in DeFi losses, nearly 80% lower than in April, had been observed for two consecutive months.
The most significant rug pull occurred when the crypto project Fintoch allegedly made off with $32 million on May 24. The largest attack on DeFi platform last month was a $7.5 million breach of Jimbo’s protocol, according to Beosin. The report suggests that hackers and scammers are increasingly targeting ordinary users instead of various project parties.
To combat these risks, Beosin recommends that crypto users enhance their anti-fraud awareness, conduct thorough due diligence before investing, and learn how to better secure their cryptocurrencies. The firm also warns against using shared or public charging devices for mobile phones, as they may be modified to inject malicious programs that compromise private keys.
This caution aligns with a warning issued by the FBI in April, advising against using free charging stations at places like airports due to the potential for malware and monitoring software installed. The FBI instead suggests carrying personal chargers and USB cords for use in electrical outlets.
The rise in rug pulls and exit scams, exceeding losses from DeFi hacks, underscores the urgency for cryptocurrency investors to stay informed and exercise caution when participating in the market.
Crypto scams on the rise
The increase in rug pulls and exit scams highlight the ongoing challenges faced by investors in the cryptocurrency space. Rug pulls refer to situations where the creators or founders of a cryptocurrency project abruptly abandon the project and abscond with investors’ funds. These incidents can be devastating for individuals who have placed their trust and money in these projects, often leading to significant financial losses.
The growing prevalence of rug pulls and exit scams raise concerns about the overall security and trustworthiness of the cryptocurrency market. While decentralized finance (DeFi) projects have faced their share of vulnerabilities and hacks, it is alarming to see that losses from rug pulls have surpassed those from DeFi exploits. This trend indicates a shift in tactics by hackers and scammers, who now seem to target unsuspecting individual users more frequently.
Beosin’s recommendation for crypto users to raise their anti-fraud awareness and conduct due diligence before investing is crucial. It emphasizes the need for individuals to thoroughly research and evaluate the legitimacy of cryptocurrency projects before committing their funds. This includes examining the project’s team, assessing its transparency and communication, and reviewing the project’s code and smart contracts for any potential vulnerabilities.
Overall, the findings from Beosin’s report and the warnings issued by both Beosin and the FBI serve as critical reminders for cryptocurrency users to remain vigilant in an evolving landscape. As the cryptocurrency market continues to mature, it is essential for individuals to prioritize their own security, stay informed about potential risks, and take proactive measures to protect their investments and personal information.
