Scam and Dead Crypto Projects: A Global Breakdown of the Industry’s Troubling Trends

The investigation reviewed over 1,500 crypto projects, revealing alarming trends tied to specific nations and their developers.

• The United States dominates as the largest source of scam and dead crypto projects, with American founders accounting for 33% of all failed projects and 43% of scams globally.
• Russia tops the charts for scam rates, with 24% of its crypto ventures deemed fraudulent.
• South Korea leads in failed projects, with a staggering 59% of its crypto initiatives classified as dead.
• Vietnam, a rising star in blockchain, is the only developing nation in the top ten for both the number and rate of scam and dead crypto projects.

Source: 5Money

The analysis leveraged data from CoinMarketCap to evaluate 1,544 crypto projects. Researchers identified projects as “dead” using criteria such as:

• Liquidity below $50,000.
• Daily trading volume under $1,000.
• Inactivity on social platforms for at least three months.
• Defunct websites or delisting from CoinMarketCap.

For scams, the Rekt Database was utilized to track rug pulls and other fraudulent schemes. The study spanned January 2022 to October 2024, offering a comprehensive snapshot of the crypto landscape.

Source: 5Money

As the world’s leading innovator in crypto, the U.S. also stands out as the primary source of fraudulent projects. High-profile failures like FTX, once a $32 billion platform led by Sam Bankman-Fried, exemplify the systemic risks. FTX’s collapse in 2022, caused by misuse of user funds and hazardous financial practices, highlighted gaps in oversight and ethical standards.

While the U.S. boasts numerous innovative projects, this growth has come at a cost. With 43% of global scams originating in America, the data underscores the urgency for stricter regulatory frameworks.

Source: 5Money

Russia’s developers hold the dubious distinction of having the highest scam rate globally, with nearly one in four projects flagged as fraudulent. Close behind is Switzerland, where 22% of crypto ventures are scams, followed by China at 20%. These figures reveal vulnerabilities in even established markets, emphasizing the need for investor vigilance.

South Korea leads the world in failed crypto projects, with 59% of its initiatives ending up dead, followed by Singapore at 54%. Countries like the United Kingdom, Canada, and the Netherlands also report failure rates of around 50%, reflecting a broader trend of unsustainable ventures in blockchain hotspots.

Source: 5Money

Vietnam is an emerging crypto hub, but with 12% of its projects deemed scams and 42% classified as dead, the country faces significant challenges. Despite its booming blockchain industry, Vietnam ranks among the top ten for both scam rates and project failures. This duality highlights the growing pains of developing markets striving for innovation while grappling with issues of trust and longevity.

The findings spotlight the need for global standards in crypto regulation. The United States, while leading in innovation, must address its lax oversight to curb fraudulent activities. Meanwhile, countries like Vietnam must focus on fostering sustainable projects to balance their rapid growth.

“Rapid innovation without adequate safeguards often leads to a higher share of failures and scams,” the report concludes, urging investors to exercise caution and conduct thorough due diligence.

Source: 5Money

As cryptocurrency adoption continues to grow, the report underscores the importance of understanding global trends in failed and fraudulent projects. While every country listed possesses a thriving blockchain market, rapid growth often brings instability. To build a trustworthy ecosystem, both regulators and investors must work to mitigate risks while embracing the transformative potential of blockchain technology.

The data paints a picture of a young, volatile industry navigating the balance between innovation and reliability.