Average potential crypto rug pull makes $2,600 in profit: Chainalysis

A report from the crypto research firm studied scam token launches on Ethereum-based exchanges

article-image

Rob Kints/Shutterstock modified by Blockworks

share

Last year was a lean one for crypto, but that didn’t put an end to rug pulls.

A report from Chainalysis today found that of all Ethereum ERC-20 tokens listed on DEXs in 2023, more than half met criteria for possible pump and dump schemes. 

In a pump and dump, some illicit actor convinces investors to buy a token before selling a major share of the supply, collapsing the value and leaving those not in on the scheme holding the bag. In these schemes, scammers will sometimes wash trade, or buy and sell the same token, to create misleadingly high trading activity without any real change in ownership. This tactic artificially boosts the asset’s trading volume, giving the false impression that it is more in demand and potentially more valuable than it actually is.

Last year’s 90,408 possible ERC-20 pump and dumps identified by Chainalysis netted $241.6 million in profit for those draining the liquidity, amounting to a pretty paltry take rate for rug pullers — $2,672 per token dump. 

Read more: For first time, CFTC cracks down on crypto’s ‘pump-and-dump’ schemes

To identify pump and dumps, Chainalysis found tokens that were traded at least five times by DEX users before a single address removed at least 70% of its liquidity, leaving the token with less than $300 in its liquidity pool. Put more simply, tokens investors traded before a whale sold their entire share, leaving holders with tokens they couldn’t sell. 

Of note, Chainalysis analyzed cases that met these criteria but couldn’t prove that every instance was in fact a market manipulation scheme.

While the average pump and dump scenario earned the perpetrator little more than a couple months’ rent, some market manipulators were especially prolific. Chainalysis identified one wallet that orchestrated 81 possible pump and dumps grossing $830,000 in profit.

Pump and dump schemes tend to harm retail investors, and they’re a sticky part of crypto’s reputation that have led some regulators to sour on the asset class

In August, the Securities and Exchange Commission convicted former New Jersey correctional officer John DeSalvo with fraud over a pump and dump scheme. DeSalvo marketed his Blazar token to law enforcement officers as a “crypto pension” and drew more than $600,000 in investment before selling billions of his own tokens and collapsing the enterprise, the US Attorney’s office for New Jersey said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Pineapple begins deploying its $100 million Injective Digital Asset Treasury, staking INJ to earn yield and fund onchain mortgage ambitions

by Blockworks /
article-image

Staking levels in the ether funds will depend on protocol unstaking queue times and anticipated redemption activity, firm says

article-image

ETF inflows, miner strength, and tightening supply drive Bitcoin past its prior peak amid renewed demand for scarce assets

by Blockworks /
article-image

The Guidestar team, led by Alex Nezlobin, will join Uniswap Labs to enhance automated market maker design and smart order routing

by Blockworks /
article-image

Zac Prince spearheads Galaxy’s push into consumer banking with high-yield cash, crypto, and stock trading features

by Blockworks /