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Year of the Rug Pull

Blockchain risk monitoring firm Solidus Labs has released a new study revealing a 41% increase in scam tokens deployed in 2022. According to the report, over 117,000 scam tokens have been deployed this year, with over 8% of Ethereum tokens programmed to execute "rug pulls" and over 12% of Binance tokens allegedly being scams.

The study also found that since September 2020, there have been more than 200,000 scamcoins that have resulted in over 2 million investors losing money. These scams have affected investors worldwide, with many falling victims to elaborate schemes that promise high returns but ultimately end in financial loss.

The increase in scam tokens is a worrying trend for the cryptocurrency industry, which has faced criticism for its lack of regulation and susceptibility to fraud. It is vital for investors to be vigilant and thoroughly research any potential investments before putting their money into a cryptocurrency. This includes looking into the team behind the project, checking for any red flags, and reading reviews and ratings from trusted sources.

In addition to individual investors, exchanges and other platforms are responsible for protecting their users from fraudulent activities. This includes implementing strong security measures, conducting thorough due diligence on listed projects, and educating users on how to spot and avoid scams.

Overall, the Solidus Labs study findings highlight the importance of caution and due diligence in cryptocurrency. Investors should always be on the lookout for potential scams and thoroughly research any investment before committing their money.


Vauld Calls Off Acquisition by Nexo

Since July of this year, crypto lender Nexo has been in talks to acquire its competitor, Vauld. However, after six months of negotiations, the deal has fallen through, with Vauld calling it off.

Vauld initially entered into talks with Nexo to resolve a severe liquidity crunch that resulted in the company halting client withdrawals. However, the deal was ultimately unable to move forward due to several significant financial challenges facing Vauld.

The biggest issue was the company's significant exposure to the collapsed Terra ecosystem. In addition, Indian authorities had seized over $46mn of Vauld's assets, and the company had over $8mn in funds stuck on the cryptocurrency exchange FTX. Furthermore, Vauld was owed over $130mn by the Amber Group.

As a result of these challenges, Vauld is now reportedly $98mn in the hole and has until January 20th to sort out its financial issues. It is unclear at this time how the company plans to do so, and the future of the company remains uncertain.

The failed acquisition highlights the cryptocurrency lending industry's risks and challenges, which have caused it to see significant losses this year. It is essential for investors and market participants to carefully consider these risks before entering the market and to research any potential investments thoroughly.

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