Will rising rugpulls on Binance Smart Chain affect BNB’s tempo?

• Rugpulls on the BNB network have started to rise, with one address creating multiple fake tokens.
• However, sentiment around the protocol remained high, and its social volume grew.

Binance [BNB] has witnessed massive uncertainty over the past year, despite making progress on its protocol and forging new partnerships. One such deterrent has been the increasing number of rugpulls on the BNB Smart Chain [BSC].

Rugpulls abound

According to a tweet by AegisWeb3 on the 6th of November, a scammer was creating deceptive tokens and executing scams on the Binance Smart Chain. They moved initial funds to new addresses before creating these tokens, sending any extra money to a third address.

Thus, in just 11 days, the scammer carried out over 40 rugpulls.

For context, a rugpull is a crypto scam where creators dishonestly take investors’ funds, rendering tokens worthless. In this scenario, the scammer’s actions can erode trust in the BSC network. People might become wary of investing in BSC projects, fearing that they could be scams.

Additionally, these scams can cause financial losses for investors who fall for them. This kind of activity can also attract regulatory attention, which could lead to stricter rules and oversight in the crypto space, potentially stifling innovation.

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Sentiment remains high

Regardless of the challenges faced by the network, BNB’s Weighted Sentiment and Social Volume had witnessed a spike at press time. This implied that the network was still gaining popularity.

The price of the BNB token remained unaffected and continued to soar as well. At the time of writing, it was trading at $252.30.

Source: Santiment