Bulletins

Crypto scammers stole almost $8 billion in 2021, up 81% from 2020

More than a third of losses came from rug pulls, where developers rolled out crypto projects before vanishing with investor money.

A crypto coin covered in black crystals

The value of crypto scams jumped in 2021, propelled by new tokens that turned out to be hoaxes.

Photo: Executium/Unsplash

The value of crypto scams jumped this year, propelled by a growing trend of users who buy into new tokens that are then abruptly abandoned by their creators, a new report said.

The amount of money lost in crypto scams topped $7.7 billion, up 81% from 2020, according to Chainalysis, a blockchain data research and services company.

More than $2.8 billion of the loss, or 37% of the total, came from so-called rug pulls, in which developers roll out “what appear to be legitimate” crypto projects “before taking investors’ money and disappearing,” the report said.

“In rug pulls, the developers eventually drain the funds from the liquidity pool, sending the token’s value to zero, and disappear,” the report said.

The biggest rug-pull scam this year featured Thodex, a Turkish exchange where users lost over $2 billion after its CEO suddenly disappeared. The Thodex rug pull represented 90% of the value lost through rug pulls.

One scam that drew a lot of media attention featured the

Squid token based on the popular Netflix series “Squid Game,” in which users lost an estimated $12 million in value, the report said.
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

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