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According to Chainalysis, it is possible that the nearly 10,000 tokens that were launched on BNB and Ethereum last year were created solely for the purpose of duping investors. In 2022, investors in cryptocurrency invested as much as $4.6 billion in "pump and dump" tokens.
All "Pump and Dump" Tokens Launched on the BNB & Ethereum Blockchains
Chainalysis, a blockchain analytics company, published a report on February 16 that found that "all tokens launched" in 2022 on the BNB and Ethereum blockchains bore characteristics of a "pump and dump" scheme. Typically, the creators of such schemes plan a campaign of false claims, hype, and Fear of Missing Out (FOMO) to convince investors to buy tokens while secretly selling their stake in the scheme at inflated prices.
Nearly 9,900 Suspected Fraudulent Tokens Worth $4.6 Billion
Chainalysis estimated that investors purchased nearly 9,900 distinct suspected fraudulent tokens worth $4.6 billion in cryptocurrencies. A token was considered "worth analyzing" by Chainalysis if it had at least 10 swaps and four consecutive days of trading on decentralized exchanges (DEXs) within a week of its launch. Only over 40,500 of the 1.1 million new tokens released last year met the requirements. Chainalysis estimated that only 445 people or groups are responsible for the alleged pump-and-dump tokens, indicating that creators frequently launch multiple projects and made $30 million from selling their holdings. In spite of the troubling statistics, the company noted in a separate report that revenues from crypto scams were nearly cut in half in 2022, largely due to low crypto prices.