Cryptocurrency

Decentralized Finance, or DeFi, refers to Peer-to-peer (P2P) financial instruments created on top of a blockchain system (most DeFi coins use the Ethereum blockchain network) that don’t rely on central intermediaries (Banks and other financial facilitators). According to Coingecko, the DeFi space will be worth more than $100 billion in 2021. The influx of money combined with lack of legal governance, risk management, and compliance has made DeFi space a popular target for gamblers and fraudsters. The ‘Zero-sum game’ nature of these transactions means someone must lose money in order for someone else to profit. Often people get caught to rug pull scams and end up funneling lot of money to small group of insider traders. In this article we examine how exit scams are performed, as well as how a vigilant investor may track and investigate such behavior in the crypto space.