Chainalysis Discovers High Incidence of Suspected Fraudulent Tokens

02/17/2023 04:32 • Blockchain Buzz • 99 views

According to the news on February 17, Chainalysis found after analyzing all the tokens launched on Ethereum and BNBChain in 2022 that out of the 1.1 million new tokens launched last year, if only the tokens that have been exchanged at least 10 times and traded for 4 consecutive days within a week after the release were calculated, the number of new tokens would be 40521. Of the 40521 tokens, 9902 (24%) had a price drop of more than 90% in the first week, indicating that there may be higher shipment activities. Chainalysis estimated that investors spent $4.6 billion in cryptocurrency to buy 9902 different suspected fraudulent tokens. Among them, 445 individuals or groups accounted for 24% of 9902 suspicious selling tokens.

Chainalysis: 24% of the new tokens in 2022 have the feature of higher shipment

Interpret the above information:

Chainalysis, a blockchain analysis firm, has discovered a high incidence of suspected fraudulent tokens launched in 2022. After analyzing all the tokens launched on Ethereum and BNBChain last year, the firm found that out of the 1.1 million new tokens launched in 2022, only 40521 met the criteria for active trading. These criteria included being exchanged at least 10 times and traded for four consecutive days within a week after the release.

Of the 40521 tokens, 9902 experienced price drops of over 90% in their first week of trading. This loss in value highlights higher-than-average shipment activities within the crypto market related to these tokens. Chainaylsis estimated that investors spent $4.6 billion in cryptocurrency to buy these 9902 tokens that may be fraudulent.

Some of these fraudulent tokens were sold by 445 individuals or groups, accounting for 24% of the suspected fraudulent tokens identified by Chainalysis. These groups and individuals may have taken advantage of the lack of regulations around token launches and used them as an opportunity for different scams.

The findings by Chainalysis must urge individual investors to be careful when investing in such tokens with high shipment activities. It is essential to conduct in-depth research before investing in tokens, especially those launched on less regulated platforms. It is also important to pay close attention to the price movement of new tokens in the first week of trading.

Therefore, investors must perform due diligence before spending cryptocurrencies to buy new tokens. Regulatory authorities must also take note of these findings and consider introducing more guidelines and regulations around token launches to prevent fraudulent activities. The growing popularity and use of cryptocurrencies only highlight the need for more transparent and secure trading platforms in the cryptocurrency market.

In conclusion, these findings suggest the urgent need for greater investor education, regulatory oversight, and transparency in the cryptocurrency market. With a more informed and savvy investor base, it will be possible to minimize the risks of fraudulent activities in the market.

https://www.reuters.com/article/us-crypto-currencies-fraud-idUSKBN2JN0RI

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Chainalysis Discovers High Incidence of Suspected Fraudulent Tokens

Chainalysis: 24% of the new tokens in 2022 have the feature of higher shipment

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