104: Crypto Rug Pulls

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Date: 10-January-2025

Source: Comparitech, CoinGecko & Forbes

The cryptocurrency market has suffered over $27 billion in losses from rug pulls and scams, accounting for 0.77% of the $3.53 trillion market value. Rug pulls, particularly in DeFi and NFT spaces, occur when developers withdraw funds, leaving investors with worthless tokens. Notable cases include SafeMoon's $9 million loss, a $22 million NFT fraud in 2024, and the $HAWK coin collapse.

Major schemes like Africrypt and OneCoin exploited investor trust, often during market booms, using Ponzi tactics and deception. These incidents underscore vulnerabilities in speculative digital assets and emphasize the need for stricter regulations, enhanced security measures, and greater investor education to reduce risks and build confidence in the volatile crypto ecosystem.