85% of crypto rug pulls in Q3 didn’t report audits: Hacken

Cryptocurrency rug pulls are not excessively hard to beryllium spotted by investors arsenic the bulk of specified scams usually stock chiseled and disposable features, according to a caller report.

Blockchain information auditor Hacken connected Oct. 25 released its latest information insights report, aiming to spot the trends successful Q3 crypto hacks and measure however affected projects approached security.

The study paid circumstantial attraction to rug pulls, which is simply a benignant of exit scam occurring erstwhile a squad pumps their project’s token earlier the abrupt withdrawal of liquidity. According to Hacken, crypto rug pulls made up the largest magnitude of exploits successful crypto, accounting for much than 65% of each hacks successful Q3 2023.

Cryptocurrency hacks by benignant successful Q3 2023. Source: Hacken

The crushed for truthful galore rug pulls connected the marketplace is that it's casual to make specified schemes. “Serial scammers usage token factories that grounds the aforesaid behaviour to nutrient fraudulent tokens connected a wide scale,” the study notes.

Despite its precocious prevalence, cryptocurrency rug pulls are “one of the simplest scams to prevent,” Hacken said, providing immoderate tips astir specified scams, based connected its Q3 observations.

One of the astir important ways to measure a task is checking for an autarkic third-party audit, according to Hacken. Of the 78 Q3 rug pulls examined by Hacken, lone 12 reported having completed “any benignant of audit.”

But adjacent erstwhile a crypto task provides an audit, users should beryllium vigilant to decently cheque them, arsenic an audit unsocial doesn’t ever warrant extortion from scams, Hacken noted, stating:

“The task tin acquisition an audit and person an audit report, but with a mediocre score. Yet, users place this and see the specified information that the task was audited arsenic sufficient.”

According to Hacken co-founder and CEO Dyma Budorin, investors often disregard reddish flags similar the lack of audits and different issues owed to factors similar the fearfulness of missing retired (FOMO). The manufacture has seen occurrence stories with meme coins similar Pepe (PEPE) and Shiba Inu (SHIB), wherever $100 retired of curiosity led to important profits, truthful radical thin to anticipation for this past to repeat, the exec noted.

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“This tendency for important returns successful a abbreviated timeframe often causes individuals to place reddish flags and impulsively dive into investments,” Budorin said, adding:

“Scammers are good alert of this and they are precise bully astatine mimicking palmy projects. [...] Scammers often notation to thriving projects, intensifying the FOMO connected the adjacent large opportunity.”

Hacken CEO besides stressed that the process of investing successful cryptocurrency is simply a “no-brainer for galore users”, requiring “only a fewer clicks.” According to the exec, this information besides tin pb to impulsive decision-making.

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