Crypto «Pump and Dump» Account for 54% of ERC-20 Listings: Report

  coingape.com 01 February 2024 23:03, UTC

Crypto analytics firm Chainalysis has pushed out a new report that suggests that 53.4% of ERC-20 tokens listed on decentralized exchanges (DEXes) in 2023 accounted for crypto pump and dump schemes.

Thousands of Tokens Features in Pump and Dump Schemes

According to data from Chainalysis, within the twelve months of last year, a total of about 370,000 tokens were launched on the Ethereum blockchain. Of these tokens, approximately 168,600 of them were available for trading on at least one DEX. Furthermore, it was discovered that 90,408 tokens exhibited characteristics of a crypto pump and dump.

This crypto pump and dump tactic involves a situation where scammers artificially push the price of an asset upwards before finally stepping out of the market by dumping their holdings for a profit. Based on the published statement, the 90,408 tokens that are believed to be associated with crypto pump and dump, gave rise to a total of $241.6 million in 2023.

Considering each of the tokens singly, only an average profit of $2,672 was registered for the perpetrators. The blockchain analytics platform also mentioned that the likely manipulation schemes were responsible for only 1.3% of all the trading volume on Ethereum DEXes last year. At the same time, evolving technologies maintain the position of under-monitored terrain for such tactics.

Spotting Crypto Crimes

Meanwhile, the number of new tokens that meet the crypto pump and dump criteria every month has seen a decline since mid-2023. Even with this decline, the value is still higher than that of 2022. To spot the crypto pump and dump activity, Chainalysis adopted a strategy that involved searching for tokens purchased several times by unrelated DEX users.

Their discoveries suggested some level of traction. Noteworthy, this criteria encompassed tokens with more than 70% of liquidity pulled out by the largest holder within the week of the launch and now has only $300 liquidity. Such incidents are suggestive of a reduction in trading activities. The crypto pump and dump criteria is not the only tactic being explored by bad actors as the broad crypto industry has recorded several attacks recently.

There are hundreds of exploitations recorded in the past few months. Solana Phantom wallet was caught in a DDos attack a few hours ago. For now, not much is known about the attack but the protocol has confirmed that assets were not compromised in the exploit. The Solana attack comes only two weeks after Manta Network saw a major DDoS attack with over 135 million RPC requests, testing its resilience and security as the protocol usage hits a new limelight.

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