United

Coin

The United States is home to innovation in the crypto space—but it also leads in fraudulent projects. A recent study found that American founders are responsible for 43% of global crypto scams and 33% of dead projects.
A&nbsp;<a href="https://5money.vn/nations-behind-the-most-dead-scam-crypto-projects-report/" rel="noopener noreferrer nofollow">study</a>&nbsp;carried out by 5Money and Storible of more than 1500 crypto projects within the time period of January 2022 to October 2024. It found that American founders are associated with 43% scam crypto projects and 33% global dead projects.
<h2 class="wp-block-heading" id="h-u-s-tops-crypto-scam-and-failure-charts">U.S. Tops Crypto Scam and Failure Charts</h2>
The dominance of the U.S. in the list of crypto scams can also be attributed to the country being home to many blockchain-based companies. The&nbsp;<a href="https://www.thecoinrepublic.com/2024/11/24/ftx-token-ftt-skyrockets-42-as-reimbursement-plan-gains-court-approval/" rel="noopener noreferrer nofollow">implosion of FTX in 2022</a>&nbsp;is a good example of this kind of situation.
Launched by Sam Bankman-Fried, FTX was once a $32 billion giant. However, the misuse of customers’ money brought it to its knees. Several billions of dollars from user’s funds were used to bail out its affiliate company Alameda Research. It elicited widespread distress in the industry.
The consequences of FTX’s failure revealed failures of all kinds. First of all, in&nbsp;<a href="https://www.thecoinrepublic.com/2024/11/22/crypto-news-sec-commissioner-to-resign-as-trump-congress-receive-letter-on-crypto-priorities/" rel="noopener noreferrer nofollow">regulation</a>, insufficient disclosure, and excessive delegation of power to self-regulating structures. The failure also spurred demand for the improved and comprehensive set of the regulatory standards for fighting fraud and for the investors’ protection.
China is the second source of scam projects after the U.S. The U.K. is third with 8% and 7% respectively. But their place on the rating also raises more general questions regarding global management of cryptocurrencies and the stability of the markets.
<h2 class="wp-block-heading" id="h-russia-and-south-korea-lead-in-crypto-scams-and-death-rates">Russia and South Korea Lead in Crypto Scams and Death Rates</h2>
A fourth of all projects initiated by Russian developers are scams or, at best, pyramid schemes. This has prompted numerous questions regarding systemic issues and protecting investors. Switzerland is second with a 22% scam rate and China third with 20%.
Unfortunately, South Korea, which boasts of an evolved tech community, records the highest death rate in the use of cryptocurrencies. More than half, 59%, of South Korean crypto projects have been inactive indicating challenges in supporting blockchain businesses.
Singapore, another primary innovation hub, comes next at 54%. Approximately 40% of European countries’ projects are categorized as dead, and the other established markets include the U.K. and Canada, which also have a failure rate greater than 50 percent.
<h2 class="wp-block-heading" id="h-vietnam-a-developing-market-facing-growing-pains">Vietnam: A Developing Market Facing Growing Pains</h2>
Vietnam is an interesting case in this regard as it is one of the few developing countries that featured in the top list of scam and dead projects. Vietnamese developers are involved in 1.3% of scams and 2% of dead projects, ranking the country among the ten worst offenders in each case.
While the global average for projects identified as scams and dead stands at 5% and 27% respectively, Vietnam’s projects are struggling to sustain the legitimacy and life cycle percentages with 12% scams and 42% dead.
Nevertheless, the Vietnam blockchain industry is gradually developing, which indicates that the use of blockchain in emerging economies has both opportunities and challenges.
<h2 class="wp-block-heading" id="h-why-are-failure-and-scam-rates-so-high">Why Are Failure and Scam Rates So High?</h2>
High propensity of scams and dead projects can be attributed to compound conditions including uncontrolled growth, poor regulation, and high investors’ interest.
In nascent markets like Vietnam, the drive for growth often overshadows the capabilities of fraudsters and failed projects.
Still, it is essential to emphasize that even in the moderated market, the instability of the crypto assets and the excessive focus on the speculative investments’ usage in the projects’ failures.
Scam and failure rates tend to be higher in countries with strong market growth because a large number of projects raises the likelihood of scams and bad ideas.
<h2 class="wp-block-heading" id="h-the-path-forward-building-a-resilient-ecosystem">The Path Forward: Building a Resilient Ecosystem</h2>
This study underscores the urgent need for global regulatory standards and a greater emphasis on transparency and investor education. Encouraging due diligence and fostering accountability among developers are crucial steps toward reducing scam and failure rates.
While thriving blockchain markets will always face risks, achieving a balance between innovation and oversight is key to creating a more secure and reliable crypto ecosystem.
As adoption continues to expand, understanding and addressing these trends will be critical in shaping the future of digital assets.
The post <a href="https://www.thecoinrepublic.com/2024/11/25/u-s-founders-behind-43-of-global-crypto-scams-study-reveals/" rel="noopener noreferrer nofollow">U.S. Founders Behind 43% of Global Crypto Scams, Study Reveals</a> appeared first on <a href="https://www.thecoinrepublic.com" rel="noopener noreferrer nofollow">The Coin Republic</a>.

U.S. Founders Behind 43% of Global Crypto Scams, Study Reveals

Table of Contents

Thecoinrepublic.com

Other articles published on Nov 25, 2024

Toncoin’s Success Was Just the Start—Qubetics Is the Best Altcoin Today to Grab Early for Massive...

Trump holds $7 million in crypto: Arkham Intelligence

MicroStrategy Buys 55,500 Bitcoins Worth ~$5.4 Billion!

Wienerdog AI Crypto: Unleashing Innovation with AI-Driven Blockchain Solutions

Introduction to Purple Solana: The Future of Decentralized Boldness

Crypto Utility and Scalability: A Comparative Analysis of Qubetics, Polkadot, and Polygon for Bes...

Join our free newsletter for daily crypto updates!