Crypto Scammers Flood Coinbase’s Ethereum Layer-2 Chain
A recent report from Solidus Labs, a crypto surveillance firm, reveals that black hat developers have placed more than 500 malicious tokens on Coinbase’s newly launched Ethereum layer-2 chain. This occurred before the network became available to the public. The scam tokens had various hidden functions, such as minting unlimited new coins, obfuscating transaction fees, and implementing honeypots to block buyers from reselling their tokens.
Key Points:
- Over 500 scam tokens were deployed on Coinbase’s Ethereum layer-2 chain.
- Approximately 300 tokens allowed creators to generate unlimited new coins.
- 70 tokens contained obfuscated transaction fee modifiers.
- 60 tokens included honeypots to prevent token resale.
- The scam tokens generated $3.7 million worth of trading volume on decentralized exchanges.
The scam tokens managed to generate $2 million in profits for the perpetrators. They achieved this by removing liquidity from their DEX pairs after attracting a significant number of users and by minting and selling large quantities of new coins. Additionally, the scammers executed a soft rug pull attack, where they hyped up the value of certain crypto assets, only to withdraw their funds and leave existing investors facing overwhelming sell pressure.
Hot Take:
This incident highlights the ongoing challenges and risks associated with the crypto industry. It serves as a reminder for crypto users to exercise caution and thoroughly research tokens before investing in them. Additionally, it underscores the importance of robust security measures and vigilant surveillance to protect users from malicious actors.
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