The Dark Side of Crypto and Web3: Crypto-Related Scams

Abstract

We provide an overview of crypto-related scams, including investment scams, Ponzi schemes, and more recently, rug pulls that are commonly seen in Decentralized Finance (DeFi) projects. We then discuss data sources for studying Initial Coin Offering (ICO) scams, before examining the case of PlusToken, the largest crypto scam, AnubisDAO, the prototypical rug pull, and Luno's anti-scam initiative, a good prototype for other cryptocurrency exchanges and service entities to follow. User protection and education are crucial in preventing scams, despite the fact that they may require efforts from centralized entities and regulators.

Keywords: Cryptocurrencies, Cybercrime, Initial Coin Offerings, Rug Pull, User Protection

JEL Classification: G15, G18, G29, K29, K42, M41, O16