Crypto Scams Surge 85% in First Months, GeckoTerminal Offers Protection Tools

In the rapidly changing world of cryptocurrency, where new tokens are launched daily, the risk of encountering a scam is higher than ever. With 98% of new traders unaware of how to identify fraudulent tokens, education and vigilance are crucial. Thanks to insights from recent posts by GeckoTerminal, a leading crypto analytics platform, investors now have actionable tools to navigate this risky landscape. This article explores the key strategies for spotting scam tokens, backed by the latest data and on-chain trends, to help protect investments.

The crypto market has seen an explosion of initial coin offerings (ICOs) and token launches, many of which turn out to be scams. A 2023 study from the Journal of Financial Economics revealed that 85% of new crypto tokens exhibit pump-and-dump schemes within their first month, often leaving investors with worthless assets. These schemes are fueled by hype on social media, misleading promises, and a lack of regulatory oversight. GeckoTerminal’s recent post underscores this urgency, urging traders to “Do Your Own Research” (DYOR) to avoid becoming part of the 98% statistic.

GeckoTerminal provides a suite of tools to empower investors, including the GT Score, Holders Data, and insights into token age and liquidity. One of the first red flags is an uneven distribution of token ownership. Tokens where the top 10 holders own more than 50% of the supply are three times more likely to be scams. This concentration often indicates a potential rug pull, where developers or early investors dump their holdings after a price surge. Additionally, a falling holder count is a warning sign. A 40% drop in active holders often precedes a rug pull, signaling fading interest or mass sell-offs. Check wallet addresses—individual wallets with large holdings are riskier than those tied to centralized exchanges (CEXs), decentralized exchanges (DEXs), or liquidity lockers.

The GT Score assesses a token’s risk profile based on factors like transaction volume, holder activity, and creator history. Red flags include honeypot schemes (where selling is disabled), excessive buy/sell taxes that drain profits, and developers with a track record of rug pulls. This score acts as an initial filter, but it’s crucial to dig deeper with additional research. Newer tokens pose higher risks. The MIT report found that 70% of rug pulls occur within the first three months of a token’s launch. Established tokens with locked liquidity—funds secured in smart contracts—are safer, reducing the chance of a sudden exit by developers. Liquidity depth is another critical factor. Tokens with shallow liquidity pools are easier to manipulate, making them prime targets for pump-and-dump schemes.

GeckoTerminal’s post includes a visual of a token’s price chart, showing a sharp rise followed by a crash—a classic pump-and-dump pattern. This aligns with real-time on-chain data, where low-volume tokens with sudden hype often collapse within days. The platform also references “Bubblemaps,” a tool to visualize token health, which can help identify suspicious activity early. Check on-chain metrics using tools like GeckoTerminal or De.Fi Scanner to monitor wallet activity, liquidity locks, and developer behavior. Verify the creator history by investigating the team behind the token. Questionable transfers to unknown addresses are a common precursor to scams. Stay updated by following trusted sources for real-time alerts and educational content.

The X thread sparked engagement from the crypto community. Users emphasized sharing this knowledge with others to prevent rug pulls, while others advocated for investing in proven communities. These responses highlight a growing awareness and collaborative effort to combat scams. As the crypto market matures, the tools and knowledge to spot scam tokens are becoming more accessible. By leveraging GeckoTerminal’s insights—Holders Data, GT Score, and token age/liquidity checks—investors can significantly reduce their risk. The data is clear: 85% of new tokens may be risky, but with diligence and the right resources, you can avoid being part of the 98% of unprepared traders. Stay informed, DYOR, and protect your crypto journey.