A Programmatic Scam Operation Behind 1,300 Scam Crypto Tokens
A security analysis conducted by Blockfence reveals that a sophisticated programmatic scam operation has created over 1,300 scam crypto tokens since April 2023, resulting in $32 million being stolen from more than 42,000 victims.
An Automated Process Exploiting Traders
The operation functions automatically by creating tokens that mimic companies or projects that have not yet launched a token. Fake volume is introduced to attract traders. If enough legitimate capital is drawn in, the scammers cash out the token and repeat the process.
Hiding Behind Security Measures
Although the token contracts appear secure, the scam operators retain control to burn tokens holders at will, mint infinite tokens for themselves (despite tokens appearing locked), and fake the max supply of the token.
One Person or Many?
Pablo Sabbatella, one of the investigation’s authors, suggests that one person may be behind this operation due to the use of automation for various tasks like token creation and liquidity pool deployment. Sabbatella began investigating after his company’s name was used for a scam token.
Staying Under the Radar
To avoid detection, the scammers limit their profit per token to 5-20 eth. Sabbatella plans to investigate their activities on Binance Smart Chain, Arbitrum, and Base.
Protecting Yourself as a Trader
Sabbatella advises traders to avoid sketchy tokens altogether. He also recommends using multiple fraud detection tools to minimize risks.
Hot Take: Staying Informed and Vigilant Against Crypto Scams
As a crypto trader, it is essential to remain informed and vigilant against scams. The rise of programmatic scam operations targeting unsuspecting traders is a significant concern. By understanding the tactics used by scammers and being cautious when investing in unfamiliar assets, you can protect yourself from falling victim to such scams. Utilizing multiple fraud detection tools can also provide an additional layer of security when navigating the crypto market. Stay informed, stay cautious, and always prioritize your safety when trading cryptocurrencies.
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