Scams occurring on the BNB Smart Chain (BSC) have witnessed a significant decline, with losses plummeting from $55.4 million in the second quarter of 2023 to just $13.6 million in the third quarter, marking a remarkable 75% reduction, as revealed in a report from AvengerDAO, with contributions from security firm HashDit.
The drop in scam-related losses can be attributed to several factors, according to the analysis by HashDit. These factors include increased awareness among BSC community members, a surge in security products that can detect and flag malicious websites and activities, and the proactive efforts of community members in identifying scams early and issuing warnings before scammers can execute their schemes.
Although the overall decline in losses is significant, it’s worth noting that rug pulls continued to represent a substantial portion of total losses on the BSC during the third quarter, accounting for 67% of the losses. Rug pulls are characterized by malicious projects that lure investors with enticing marketing campaigns but fail to deliver on their promised products, resulting in the founders absconding with investor funds.
Additionally, the report highlighted that reserves and price manipulation remained prevalent on the BSC in the third quarter of 2023. This is attributed to hackers exploiting inadequately designed smart contracts, allowing them to manipulate prices and drain reserves.
Notably, on October 20, a group of security experts pointed out that malicious actors might prefer the BSC due to its lower costs and a perception of lower security compared to the Ethereum blockchain. CertiK security researcher Joe Green emphasized that BSC offers significantly lower transaction fees compared to Ethereum, while still providing comparable network stability and speed. Consequently, hackers might face less financial pressure when operating on BSC, making it an attractive choice for their activities.
The significant reduction in BSC scam losses, coupled with heightened security awareness and measures, reflects a positive trend in the cryptocurrency space, demonstrating the community’s commitment to combatting fraudulent activities and enhancing security protocols on the blockchain.