Cryptocurrencies are dying: Half have disappeared since 2014
More than half of cryptocurrencies have been dead since 2014 - we're talking about 14,039 out of more than 24,000 assets. The list of dead cryptocurrencies includes projects that have not registered trading activity in the last 30 days, as well as thousands of companies recognized as fraudulent.
The list also included cryptocurrencies that have been deactivated - these are closed projects or networks that stopped working after an update. Of all the dead cryptocurrencies, 53.6% of them appeared on the market in 2020-2021, during the same period about 7,530 assets ceased to exist.
Fraud in the world of cryptocurrencies
Anonymity and lack of regulation
One of the main factors contributing to fraud in the world of cryptocurrencies is their decentralized and often anonymous nature. Because they are not controlled by centralized entities such as banks or governments, cryptocurrencies operate outside of traditional regulatory jurisdictions.
The lack of clear regulation creates an environment in which it is difficult to track and penalize fraudulent activity. Moreover, the anonymity of transactions can make it difficult to identify those responsible for such activities. The lack of consistent and comprehensive regulation allows fraudsters to operate more freely, taking advantage of loopholes and lack of oversight.
Sophisticated technology and fraudulent investment schemes
The technology behind cryptocurrencies is complex and often not understood by the general public. This confusion can make investors particularly vulnerable to fraudsters. Scammers use tactics such as fraudulent initial coin offerings (ICOs) or Ponzi schemes, promising high returns in exchange for investments in non-existent or non-viable cryptocurrency projects.
Moreover, the promise of high and quick returns attracts both legitimate investors and fraudsters, creating a fertile ground for fraudulent activities. Speculation and volatility in the cryptocurrency market also contribute to this environment, often causing investors to make impulsive decisions based on insufficient or misleading information.
Cybersecurity and investor liability
Another major concern is cybersecurity issues such as hacking of cryptocurrency exchanges and digital wallets. These attacks lead to theft of funds and jeopardize the safety of investments. Cryptocurrency exchange and storage platforms, while improving in terms of security, can still be vulnerable to sophisticated attacks. This vulnerability underscores the importance of cybersecurity regulations for both users and service providers.
In addition, investors have a significant responsibility to educate themselves and fully understand what they are investing in. Given the volatile and speculative nature of the market, investors need to do their own research and due diligence before investing their money. As the cryptocurrency sector matures, more regulation and protective measures are expected, but until then, investor awareness and caution are critical to minimizing the risk of fraud.
Starting a cryptocurrency is easy
According to CoinGecko, a platform for tracking and analyzing cryptocurrencies, this is due to the relatively easy mechanism for launching a cryptocurrency, as well as the popularity of tokens associated with memes, many of which no longer exist or are dead. The most successful year, according to statistics, was 2021, when 5,724 cryptocurrencies launched during that year, or 70% of the launched projects, were shut down. Of all the cryptocurrencies that emerged in 2022, 3,520 or 60% of cryptocurrencies were closed. In 2023, more than 4,000 coins have emerged, of which 289 are already considered closed, less than 10%.
You can also familiarize yourself with fraudulent brokers.
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