The Role of Twitter in Cryptocurrency Pump-and-Dumps

We examine the influence of Twitter promotion on cryptocurrency pump-and-dump events. By analyzing abnormal returns, trading volume, and tweet activity, we uncover that Twitter effectively garners attention for pump-and-dump schemes, leading to notable effects on abnormal returns before the event. Our results indicate that investors relying on Twitter information exhibit delayed selling behavior during the post-dump phase, resulting in significant losses compared to other participants. These findings shed light on the pivotal role of Twitter promotion in cryptocurrency manipulation, offering valuable insights into participant behavior and market dynamics

Mapping the DeFi Crime Landscape: An Evidence-based Picture

Over the past years, decentralized finance (DeFi) has been the target of numerous profit-driven crimes. However, until now, the full prevalence and cumulative impact of these crimes have not been assessed. This study provides a first comprehensive assessment of profit-driven crimes targeting the DeFi sector. To achieve this, we collected data on 1155 crime events from 2017 to 2022. Of these, 1050 were related to the DeFi industry and 105 to the centralized finance (CeFi) industry. Focusing on the former, a taxonomy was developed to clarify the similarities and differences among these crimes. All events were mapped onto the DeFi stack to assess the impacted technical layers, and the financial damages were quantified to gauge their scale. The findings show that the entire cryptoasset industry has suffered a minimum loss of US$30B, with two thirds related to centralized finance (CeFi) and one third to DeFi. Focusing solely on the latter, the results highlight that during an attack, a DeFi actor (an entity developing a DeFi technology) can serve as a direct target, as a perpetrator, or as an intermediary. The findings show that DeFi actors are the first victims of crimes targeting the DeFi industry: 52% of crime events targeted them, primarily due to technical vulnerabilities at the protocol layer, and these events accounted for 83% of all recorded financial damages. On the other hand, in 40% of crime events, DeFi actors were themselves malicious perpetrators, predominantly misusing contracts at the cryptoasset layer (e.g., rug pull scams). However, these events accounted for only 17% of all financial damages. The study's findings offer a preliminary assessment of the size and scope of crime events within the DeFi sector and highlight the vulnerable position of DeFi actors in the ecosystem