The crypto market experienced a tremendous setback this year because of multiple occurrences.
A recent report suggests that Rug Pulls has significantly affected the market as compared to crypto collapses.
The report shows an increase of 41% from last year in creating scam tokens.
the cryptocurrency market to new highs in 2020 and 2021 have been shattered this year. Throughout 2022, there seemed to be no shortage of high-profile bankruptcies and scandals roiling the cryptosphere.
This year, the crypto community witnessed the bankruptcy filings of FTX, Celsius, Voyager Digital, 3AC, and many others, as well as massive crypto scandals aka Rug Pulls like the Thodex crypto exchange scandal, Swipathefox project scam, and so on.
Over the last five years, cryptocurrency-related frauds have cost users more than $20 billion, with Rug Pulls significantly affecting the crypto community. Rug Pull is a type of crypto fraud in which a company pumps their project's token before vanishing with the funds, leaving their investors with a worthless asset.
According to Solidus' latest Rug Pull Report for 2022, there were 117,629 scam tokens between the start of the year and December 1st. The report indicated a 41% increase from the last year's data.
As per the report, nearly 2 million people have lost funds as a result of rug pulls. This corresponds to the number of investors who experienced unsecured losses in a few of the greatest crypto market crashes.
Rug pulls are becoming increasingly common and sophisticated, leaving investors feeling angry and confused. The truth is, these scams are often executed by experienced criminals.
These criminals understand the crypto world and know how to exploit it to their advantage. They often use tactics such as pump and dumps, exit scams, Ponzi schemes, honeypots, and ICO scams to swindle unsuspecting investors out of their money.
This creates a lot of mistrust among investors, making them warier about investing in new projects. This has made it more difficult for legitimate projects to attract investors and has ultimately slowed down the growth of the crypto world.
If we look at this year particularly, crypto collapses have had a major impact on the broader crypto market, while rug pulls have had a greater impact overall. Rug pulls are an unfortunate reality in the crypto world, leaving investors feeling betrayed and confused.
This clearly indicates that rug pulls are the clear winner in affecting the sentiment of users. This also implies that worldwide crypto regulation is urgently needed to prevent both crypto crashes and rug pulls to safeguard the future of the crypto industry.
In your opinion, which of the aforementioned two had a major impact on the cryptocurrency market, and which crypto rug pull is the most devastated one? Share your thoughts in the comment section below.
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