Bitrace: Defending Against Onchain Rug Pulls

A rug pull is a common cryptocurrency scam where a project or investment opportunity is created, often with the promise of high returns, only for the creators to abscond with the funds once investments are made.

In today’s on-chain economy, rug pulls are often executed through malicious DeFi applications, tokens with restricted permissions, or disguised phishing websites, causing significant losses for ordinary investors.

Gainswap Phishing Scam

In June 2021, Bitrace received a report from a victim who had their crypto assets, valued at approximately 10K, stolen from a DeFi protocol where they had been staked. The project team absconded with nearly 8M in digital assets from other investors and subsequently shut down the website and went into hiding.

According to Bitrace’s statistics, over a hundred individuals were affected by this incident, with a total loss of approximately 70M.

Tracking and Recovery

Bitrace provided detailed on-chain analysis for this case, including: tracing the flow of funds to money laundering and hiding addresses, and compiling statistics on the number of victims and the total amount of losses.

Bitrace also provided a two-month cryptocurrency tracking training program for local law enforcement and, in collaboration with a legal team, proactively contacted victims to understand and reconstruct the entire incident, providing investigators with a large amount of evidence.

Rugpulls, A Constant Threat

Onchain rug pulls are evolving rapidly and causing significant losses. In addition to continuously learning about the latest scams, ordinary investors should immediately contact professional security agencies for assistance as soon as they suspect they have been victimized by a rug pull.

Contact us:

Website: https://www.bitrace.io/

Email: bd@bitrace.io

Twitter: @Bitrace_team

LinkedIn：@bitrace tech