Scams on BNB Smart Chain Plunge by 75% in Q3 2023 Despite Ongoing 'Rug Pulls'
Summary:
The BNB Smart Chain (BSC) experienced a significant drop in scams, from $55.4 million in the second quarter to $13.6 million in the third quarter of 2023, marking a 75% decrease. This decline is attributed to increased community awareness, security tools, and early fraud detection. However, 'rug pulls' still constituted 67% of all losses in Q3. Despite this reduction, encryption security firm HashDit underscores the continued prevalence of reserve and price manipulation, attributing them to hackers exploiting poorly designed smart contracts. Despite lower security perceptions, BSC remains appealing to hackers due to its lower fees compared to Ethereum, as per security experts.
Fraudulent activities on BNB Smart Chain (BSC) saw a reduction from a colossal $55.4 million in 2023's second quarter to a relatively modest $13.6 million in the third quarter, according to data shared in an AvengerDAO report by cryptographic security company HashDit. This marks a massive 75% decline in the overall losses from scams.
HashDit attributes this considerable dip to several factors such as an enhanced awareness among the community, the rise of security tools that flag malicious websites and activities, and the prompt identification of frauds by community members who then warn others before the fraudsters can make their move.
Despite the impressive drop, it's worth noting that 'rug pulls' accounted for 67% of the total losses on the blockchain in Q3. Rug pulls, as explained by HashDit, are the most common form of attack on BSC, wherein ill-intentioned projects bait investors with marketing promises they fail to deliver, giving the founders an opportunity to make off with the investors' funds.
Significantly, reserves and price manipulation were also widespread on BSC during the third quarter of 2023. The report stipulates that hackers have become adept at exploiting "ill-conceived smart contracts."
On October 20, a group of cyber-security experts raised the concern that bad actors may be drawn to BSC due to its cost-effective nature and perceived weaker security as compared to the Ethereum blockchain. Joe Green, a security specialist with CertiK, argued that while BSC’s compatibility and speed match Ethereum, the fees are significantly lower. In his opinion, this omission of financial pressure tempts hackers to prefer using BSC.
Published At
11/7/2023 9:00:00 AM
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