According to an April 4 report from blockchain security firm Immunefi, BNB Chain is the king of scams in the first quarter of 2023, with more than 73.3% of such scams across the entire crypto ecosystem taking place on the network.
The report, titled "Cryptocurrency Losses Q1 2023," looked at various cryptocurrency hacks and scams in the first quarter of this year. It found that Ethereum and BNB Chain were the two biggest targets of hackers and scammers, with 68.8% of the total losses to these networks. BNB Chain, in particular, accounted for 41.3% of total losses to hacks and scams.
One type of scam in particular has dominated on BNB Chain: rug pulls, a type of scam where developers raise money and then close shop without offering a product or service. Immunefi said that in the first quarter, 73.3% of rug pulls in the crypto ecosystem occurred on the BNB Chain.
Immunefi technical lead Adrian Hetman speculates that the high number of rug pulls on-chain may be due to a culture that promotes forking open-source code:
“BNB Chain still has serious issues with developers using forked code. Its community lacks a safety-first approach and attracts many users looking for a way to make quick money. That’s why we continue to see the highest number of Exploitation and rug pulling."
While these scams are prevalent on BNB Chain, Immunefi also said that carpet pulling and other scams are much less of a problem in the crypto community than hacks or exploits. Hacking was the "principal cause" of losses in the first quarter of 2023, while all fraud (including canvassing and other scams) combined accounted for just 4.3% of total losses, the report said. The first quarter of 2023 saw a staggering number of hacks and exploits that drained millions of dollars from decentralized finance (DeFi) protocols. DeFi lending app BonqDAO fell victim to an Oracle hack on Feb. 1, losing $120 million in cryptocurrency. On February 17, decentralized exchange aggregator Dexible was hacked and lost more than $2 million. On March 13, Euler lost over $195 million in cryptocurrency in the largest DeFi attack of the quarter.
