Web3 sees 15 new scam smart contracts an hour: Solidus Labs

The Web3 and cryptocurrency space is seeing a significant amount of smart contract scams proliferating, with blockchain risk monitoring firm Solidus Labs saying it has detected on average 15 newly deployed scams every hour.

Solidus Labs said on Oct. 27 that it had been monitoring 12 blockchains including Ethereum (ETH), Polygon (MATIC), and BNB Chain (BNB) since Oct. 10 and in that time had detected 188,525 smart contract scams.

Former United States Consumer Financial Protection Bureau (CFPB) director, Kathy Kraninger, who is now Solidus’ VP of regulatory affairs, said in the statement that “while some of the big rug pulls and scams make the news […] the full picture stemming from our data shows the vast majority of these scams go unnoticed.”

The firm also shed some light on the number of tokens that are scams, saying 12% of BEP-20 tokens — the BNB Chain’s token standard — exhibit fraudulent characteristics marking it as the blockchain with the most cryptocurrency scams.

Ethereum’s native ERC-20 token standard came second with 8% of the blockchains’ tokens exhibiting scam-like characteristics according to the company. It also estimated around $910 million worth of ETH related to scams had passed through centralized and regulated exchanges.

Solidus said these so-called “scam token smart contracts” are hard-wired to steal investors’ funds and fit alongside other abusive practices such as rug pulls where the developer steals the invested funds and token impersonations that aim to trick people into investing by mimicking popular cryptocurrencies.

It said these types of contracts are “automatically deployed and easily repeated” with scammers able to quickly complete thousands of low-value attacks with exchanges, regulators and authorities none the wiser.

It’s not only scamming cryptocurrencies investors need to watch for, hacks are also on the rise with October being possibly the biggest month ever for crypto hacking activity according to analytics firm Chainalysis.

Chainalysis director of research, Kim Grauer, said in an interview with Cointelegraph that the amount of value stolen in crypto hacks is on track to hit all-time highs in 2022 with a vast majority targeting decentralized finance (DeFi).