One or a few investors or developers hold the majority supply of a given coin. The decentralized (DeFi) altcoin crypto market is ripe with this popular scam. If you’re curious about the altcoin market, or you’ve heard about the next hot coin that’s “ about to moon,” below are some of the most common scams happening in DeFi right now, particularly on DEX platforms:ĭeFi scam #1: the rug pull or pump-and-dump

But DEX platforms are also a breeding ground for scam coins designed for a singular purpose to empty your wallet. Sure, they offer access to new or obscure coins not yet listed on the CEX platforms, giving you the chance to get in early before a coin gains momentum. This makes DEX platforms an important tool for scammers to create elegant cons. There are no audits or systems in place to vet developers or the legitimacy of a project. And as always, transactions are final and irreversible.Īnyone can create a coin and list it on a DEX platform. They offer direct, peer-to-peer trading without collecting any data about any of the users. Then you can buy or sell coins directly from there.ĭEX platforms operate outside the purview of legal and financial regulators, so anyone can use a DEX platform anytime with complete anonymity. You just connect a digital wallet, like MetaMask for example, to the platform. On a DEX platform, you do not need to provide any personal information or create an account in order to trade digital assets. Decentralized exchange (DEX) platforms like Uniswap and PancakeSwap, for example, operate in much the same manner but with a few key differences.

Those are centralized exchanges (CEX) and operate within some legal and regulatory framework, albeit loose framework. You may have heard of major crypto exchange platforms like Binance, Gemini, or CoinSmart. Why do crypto scammers love decentralized exchanges?

Cryptocurrency defi coins