Three quarters of rug pulls happened on BNB Chain in Q1 2023

Hacking

Fin is a former junior editor at TechForge.


Of all the rug pull scams carried out across the crypto ecosystem in the first quarter of 2023, almost three quarters occurred on Binance’s BNB Chain, according to a report from Immunefi.

The blockchain security firm’s latest report, ‘Crypto Losses in Q1 2023’, looked at the different kind of crypto hacks, scams, and exploits that took place in the first three months of the year.

It found that 73.3% of rug pull scams, where developers attract investor money for a project then suddenly shut down or disappear with the raised funds, happened on BNB Chain in this period.

The report also found that Ethereum and BNB Chain were the most notable targets for hackers, with 68.8% of total losses coming from these two networks.

BNB Chain, the crypto exchange Binance’s layer-1 blockchain network, made up 41.3% of these total losses.

In the report, Immunefi tech lead Adrian Hetman suggested that the reason for so many rug pulls on BNB Chain could be due to developers forking open-source code:

“BNB Chain still has a serious issue with developers using forked code. Its community lacks a security-first approach and attracts many users looking for a quick way to earn money. That’s why we continue to see the biggest number of exploits and rug pulls in this ecosystem,” Hetman said.

Although BNB Chain attracted so many rug pulls, Immunefi noted that this type of scam is a smaller problem for the crypto space than hacks and exploits, which result in far greater financial losses.

The report found hacks to be the “predominant cause” of losses in the first quarter of 2023, while rug pulls and other scams or frauds made up only 4.3% of total losses.

A number of high-profile scams hit the news cycle in Q1 2023, taking with them millions of dollars from decentralised finance (DeFi) protocols.

In March, lending protocol Euler lost more than $195 million in a flash loan attack, the largest crypto exploit in 2023 to date. The month prior, on 1 February, another DeFi lending protocol BonqDAO suffered an oracle hack that manipulated the price of a token, resulting in an estimated $120 million loss.

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