– Scammers are invading the space, with 10% of all DeFi tokens being scams.
– Regulators are keen to develop policies that safeguard users.
By Elizabeth Kerr
Decentralized Finance (DeFi) is one of the most talked-about aspects of the cryptocurrency industry today. The sector has seen tremendous growth, with new projects and applications emerging almost daily.
However, as the DeFi space expands, so do the scams. An analysis by BanklessTimes.com reveals that more than 10% of all the DeFi tokens in the market are fraudulent. To be precise, 183,265 tokens in the DeFi protocols are a scam.
Speaking on the data, the CEO of BanklessTimes, Jonathan Merry, said, DeFi presents several profitable opportunities through its various loans and trading platforms. Yet, with each new crypto trend that attracts considerable profits, scammers are always seeking ways to capitalize on it. It is no surprise that 10% of tokens in the protocol are scams. It calls for caution among users.
Some popular types of scams include rug pull, Ponzi schemes, pump-and-dump schemes, and exit scams.
As the DeFi space continues to grow, so does the need for proper regulation. Several regulatory bodies, such as the SEC and CFTC in the US, are already working on developing policies that will safeguard investors from fraudsters.
Regulator’s Role in Reducing Scams
The regulatory community responds with various…
