Cryptocurrencies have risen in popularity over the past several years, and have become a popular target for scammers, hackers, and fraudsters. In the first quarter of 2023, blockchain security firm Immunefi found that 73.3% of rug pulls happened on BNB Chain. Rug pulls are a type of scam whereby developers collect funds and then shut down without delivering a product or service. This finding is interesting because BNB Chain has established itself as a forking open-source code platform.

According to Immunefi's report titled “Crypto Losses in Q1 2023,” the Ethereum network and the BNB Chain network were the two largest targets for those committing fraudulent behavior. They collected 68.8% of total losses. Additionally, BNB Chain was responsible for 41.3% of total losses from hacks and scams, with rug pulls making up the majority of that figure.

Immunefi's tech Lead Adrian Hetman attributes the large number of rug pulls to the culture surrounding BNB Chain, which actively encourages people to fork open-source code and makes it harder to spot fraud when funds are moved around. As Hetman stated, there was “a culture of forking.”

Despite this, Immunefi reported that rug pulls and other frauds collectively made up only 4.3% of total losses in Q1 2023. Hacks were the most common cause of damages and issues with the crypto ecosystem, far surpassing fraud. For example, the decentralized finance (DeFi) app BonqDAO was the victim of an oracle hack on February 1st that resulted in the loss of120 million in crypto. Similarly, Dexible, a decentralized exchange aggregator, was hacked for $2 million and Euler lost $195 million in the largest DeFi attack of the quarter.

Overall, while it is important to be aware of the potential risks associated with rug pulls, it is even more critical to keep an eye on the security of a network and services to prevent potential hacks and exploits.



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