- Rugpull losses hit $6B in 2025, driven mainly by Mantra Network.
- Mantra evaded scrutiny despite clear red flags.
- AI and deepfakes fuel rising crypto scams.
This year has seen rugpull-related losses in the crypto space skyrocket dramatically, with one decentralized finance (DeFi) ripoff responsible for almost all of 2025’s $6 billion loss. The news of this massive spike in crypto scams, according to a recently released report by DappRadar, highlights the developing and deadly nature of scams in the crypto realm.
The study points out that during the first three months of this year, the cryptocurrency ecology lost $6 billion through rug pulls, a plus 6,499% against $90 million from the first quarter of 2024. The timing coincides with signs that scams are growing even more sophisticated and that the whole industry is wary about the safety of its users.
A blockchain analytics expert, Sara Gherghelas from DappRadar, found that 92% of all crashed financials come from a single suspected rug pull, a suspected rug pull by Mantra Network, a DeFi concept working in the Polygon blockchain. The magnitude of the Mantra incident so far puts it on course to be one of the largest frauds in recent decentralized finance history, while investigations are still ongoing.
The scale of losses affected rug pull incidents. The total number of rug pull incidents decreased compared to the same period in 2024, seven, down from 21, a 66% drop. However, although this dropping frequency is the case, the threat could be deeper. Modern scam operators no longer want a quick win; they are trying hard to find a way to destabilize an entire ecosystem in a single shot, said analysts.
The Mantra Meltdown: Dissecting a High-Profile Rugpull
The Mantra Network case is unique for that scale and precisely because it could avoid scrutiny despite the proliferation of numerous visible warning signs. Designed as a platform for DeFi innovations and interchain features, the project got into listings on the most popular platform, DappRadar, and was building a veneer of legitimacy.
However, a closer look at blockchain activity is worrying. According to data reviewed by DappRadar, the level of engagement on the chain is suspiciously low. On December 14th, 2024, Mantra’s peak Unique Active Wallets (UAW) stood at just 64.
Outside of that month, daily activity drastically declined to between 1 and 11 wallets, many of which have zero activity on a given day.
Even the transaction volumes were highly irregular; some days, they would ramp from 66 to zero, or vice versa. Such volatility might mean that some nonorganic activity is likely going on, from potential wash trading to bot-driven activity or manipulation by insiders, suggest DappRadar analysts.
Heavy wallet distribution patterns observed on PolygonScan suggested centralization, a typical red flag of potential insider-driven liquidity exit. Additionally, Mantra didn’t publish smart contracts or an open-source GitHub repo, thus making it harder for the public to review how the project works internally. Analysts say many of these indicators were hidden in plain sight.
A Changing Threat Landscape and the Growing Need for Vigilance
The 6,500% rise in rugpull losses admittedly signals more than just the aftermath of a single incident. However, it’s the very thing DappRadar has predicted all summer long: that rugpulls would impact Ethereum in a significant way. In the NFT, speculative ventures, experimental DeFi tools, meme tokens, and rug pulls are expected in Q1 of 2024. However, by comparison, a significant distinction has been shown in 2025, where most rugpulls now originate from the memecoin domain, which is still very buoyant and unregulated.
The headwinds, however, are growing. The North American Securities Administrators Association (NASAA) just ranked cryptocurrency and social media scams among the top threats to retail investors in 2025.
According to NASAA, scammers aggressively leverage Facebook, X (formerly Twitter), Telegram, and WhatsApp to sell fraudulent investment schemes. Indeed, many such schemes have been elevated with AI-generated content and emotionally manipulative tactics exaggerated by FOMO (fear of missing out) and pig butchering scams themed romance.
Deepfakes Are Fueling CryptoScam Surge
NASAA estimates that 39% of regulators expect the AI-generated content to serve as the primary weapon of the scammers this year, with 22% declaring an increase in the use of deepfake to carry out the fraud. Staggering losses have already resulted from these new methods. Reports indicate that pig butchering scams had caused over $3.6 billion in damages alone in 2024, while crypto related frauds stood at $9.9 billion, which could surpass $12 billion according to Chainalysis, as reported.
After all, “pig butchering” had risen by 40% year over year and now represents a quarter of the number of scam incidents reported. While rug pulls aren’t going anywhere, experts caution that judicious oversight and vigilance will significantly reduce their impact.
