Crypto exchange Binance's BNB token dropped around 5% and as of 12:40 am ET, the price 1 BNB token stands at $267.65.

Immunefi: BNB Chain had the Highest Numbers of Rug Pulls in Q1

  • BNB Chain recorded the highest cases of rug pulls.
  • Euler Finance suffered the biggest loss from a hack in March.
  • Hacks remained the primary cause of losses in Q1.

According to a report from blockchain security firm, Immunefi almost three-quarters of all rug pull scams in the crypto industry during the first quarter of 2023 took place on Binance’s BNB Chain. The report, titled “Crypto Losses in Q1 2023,” examined the various types of crypto hacks, con games, and exploits that happened during the first three months of the year.

The report discovered that 73.3% of rug pull scams—where developers raise funds from investors for a project, only to abruptly close down or vanish with the money—took place on BNB Chain during Q1.

The study added that Ethereum and BNB Chain were the most popular targets for hackers, accounting for 68.8% of all loses. Surprisingly, BNB Chain, accounted for 41.3% of these overall losses. Immunefi tech lead Adrian Hetman speculated that the alarming number of rug pulls on BNB Chain could be caused by developers forking open-source code.

Hetman explained,

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.

Despite the multiple rug pulls on BNB Chain, Immunefi noted that this sort of fraud is less of a concern for the cryptocurrency industry than hacks and attacks, which cause much larger financial damage. The report added that hacks were the primary cause of losses in Q1, while rug pulls and other frauds or scams accounted for only 4.3% of total losses.

Several well-publicized frauds made headlines and stole millions of dollars from decentralized finance (DeFi) networks throughout Q1. March recorded the largest cryptocurrency exploit in 2023 after a flash loan attack cost the lending protocol Euler over $195 million. BonqDAO suffered another high-profile scam in February. An oracle attack manipulated the price of a coin, wiping out $120 million.

Lawrence Woriji
Lawrence Woriji Verified Author

I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.

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