A recent report by Chainalysis reveals that a staggering 54% of tokens launched on Ethereum in 2023 were involved in trading activities resembling pump-and-dump schemes. 

While this activity accounts for just 1.3% of the total trading volume on Ethereum's decentralized exchanges (DEXes), it indicates potential market manipulation within the ecosystem.

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Pump and Dump Dynamics

The report outlines how pump-and-dump schemes unfold within the crypto space. Typically, actors orchestrate token launches or acquire large token supplies, promoting them as lucrative investment opportunities through social media and online forums. This marketing attracts buyers, inflating token prices artificially.

Manipulators use deceptive practices like wash trading to create false liquidity and inflate prices. Once the token value peaks, they sell off their holdings, causing prices to plummet, and leaving investors at a loss. Some even execute "rug pulls," abandoning projects after profiting from unsuspecting investors.

Chainalysis identified instances of token manipulation, with one wallet launching 81 tokens and amassing over $800,000 in profits. The report highlights the malicious removal of liquidity from trading pools, trapping traders and preventing them from exiting their positions.

Worth noting, that between January and December 2023, Ethereum witnessed over 370,000 token launches, with approximately 168,600 tokens tradable on at least one DEX. Notably, the monthly token launches surged, with spikes reaching nearly 50,000 per month, indicating increased market activity.

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Singaporean Advisory on Crypto Wallet Drainers

In a separate development of crypto exploit, Singaporean authorities issued a joint advisory warning crypto traders about digital asset wallet drainers in a separate development. These drainers facilitate phishing attacks, targeting investors' assets such as tokens and NFTs. 

The advisory emphasizes preventive measures like using hardware wallets and safeguarding seed phrases.

Reports indicate a surge in crypto-draining incidents, with over $10 million stolen from four victims in a week. Last year alone, wallet drainers siphoned approximately $300 million from over 300,000 victims, underscoring the urgency for enhanced security measures in the crypto community.