Chainalysis Reports Over 4.5% of 2024 Token Launches Show Pump-and-Dump Characteristics

A new report from blockchain forensic firm Chainalysis highlights a concerning trend in the cryptocurrency market, with more than 4.5% of tokens launched in 2024 displaying characteristics typical of pump-and-dump schemes. The firm also revealed that wash trading activity across prominent networks like Ethereum, BNB Chain, and Coinbase’s Base reached an estimated $2.57 billion this year.

According to Chainalysis, over 3 million new tokens were launched in 2024, with a staggering 1.3 million (or roughly 40%) listed on decentralized exchanges. However, the vast majority of these tokens have not seen meaningful trading activity. Only 1.7% of the tokens have been actively traded in the last 30 days, a figure that suggests many tokens were abandoned shortly after their creation.

The researchers speculate that some of these abandoned tokens may have been part of short-lived schemes designed to capitalize on initial hype before fading away—typically known as "pump-and-dump" or "rug pull" tactics. These schemes often involve artificially inflating a token’s price, followed by a sudden sell-off, leaving investors with worthless assets.

Chainalysis also uncovered troubling activity among decentralized exchange (DEX) pools. Nearly 90% of DEX pools suspected of being linked to pump-and-dump schemes were “rugged” by the address that created the pool. In other instances, the pools were rugged by addresses associated with the token creator or funded by the same source, indicating a potential coordinated effort to deceive and exploit users.

The issue of wash trading—where traders artificially inflate trading volumes to create a false impression of market activity—has also been a significant concern. Chainalysis estimates that wash trading across Ethereum, BNB Chain, and Coinbase’s Base reached about $2.57 billion in 2024. While the firm used different methodologies to detect various forms of wash trading, the volume still represents a large portion of total trading activity on these networks.

The findings highlight the ongoing risks faced by investors in the crypto space, where pump-and-dump schemes, wash trading, and other forms of market manipulation remain prevalent. As the number of tokens launched each year continues to rise, the need for effective regulatory oversight and better detection tools has never been more urgent.

As Chainalysis concludes, while the overall market remains dynamic, it is crucial for participants to remain vigilant and discerning when investing in newly launched tokens, especially in the face of these persistent fraudulent schemes.