Security Firm Warns of 55 Potential Crypto Scams on Binance Smart Chain

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Security Firm Warns of 55 Potential Crypto Scams on Binance Smart Chain For Hannah Perez

PeckShield analyzed BSC-based token smart contracts and found that at least 55 have malicious functionality.

A recent investigation found more than five dozen suspicious-looking cryptocurrency projects operating on the blockchain. Binance SmartChain (BSC).

the security firm blockchain, PeckShield, warned this Thursday about 55 cryptocurrency projects that could be potential scams. Through its official Twitter account, the cybersecurity team reported that it had detected the projects and shared a list of the names of the tokens suspects. PeckShield called sayings tokens What “potential carpet pulls” (rug pulls).

It should be noted that the termcarpet pull” refers to a type of scam in the crypto space that ends with the developers of a project running away with investor funds. These types of scams, which may appear to be legitimate projects at first glance, are common on decentralized finance (DeFi) platforms, including decentralized exchanges (DEXs).

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55 potential “rug pulls” in BSC

After a process of analysis of the chain of blocks, PeckShield found fifty-five smart contracts of tokens over the BSC network with malicious functions. Smart contracts are in their infancy and are executed by anonymous teams

According to the report, many of those smart contracts were configured in such a way that users can buy the tokens, but not sell them. This cheating mechanism means that in many cases the tokens in question rise in price rapidly as more investors buy the coin before realizing that they cannot liquidate their gains. The creators of the project then take the opportunity to run away with the money, carrying out the “carpet pull“.

PeckShield revealed that other malicious functions of the smart contracts analyzed, in addition to blocking holders from selling their tokens, include the ability for administrators to create tokens unlimited and blacklist accounts.

The firm has decided to warn the community “earlier than later” after previously informing the team of Binance SmartChain about the situation. A spokesman for PeckShield said to CryptoBriefing, while also discussing common problems among suspect projects.

The authority of each token owner is too great and most of these tokens have too few sellers. Furthermore, when interacting with [el DEX] PancakeSwap, the sale may be restricted.

PeckShield warns about ‘TRUMP’ token

The good news is that these projects do not seem to be capturing the attention of a large number of investors, at least not yet. As noted CryptoBriefing, 54 of the 55 tokens detected have no active users or locked value. The only project showing activity is ‘TRUMP’, which has around $29,500 in liquidity. PancakeSwap.

That project, whose name seems to be inspired by the former president of the United States, Donald Trump, registers 271 user addresses and more than 650 transactions, according to data from BSCScan.

PeckShield warned about the token TRUMP in a tweet separated. The firm described the project as ofhigh risk because it allows the creator to coin tokens unlimited and recommended the community to stay away from that coin.

It should be noted that in BSCScan some users have already called the project a scam and denounced that it does not allow its holders to sell the ‘TRUMP’ tokens. In this regard, a user pointed out that when trying to sell his coins he got an error message saying: “Gas rates cannot be estimated“, regardless of the figure you put.

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Crypto scams use successful brand names

Carpet pulls have been a recurring phenomenon in the crypto space, ramping up aggressively over the past year.

A report of chain analysis published in December revealed that Crypto Investors Lost $2.8 Billion From “Carpet Pulls” During 2021. The figure represented 37% of the total funds amassed by crypto scams last year, compared to 1% for 2020.

Among the characteristics of this type of fraudulent project, it stands out that its scammers often seek to take advantage of a fashionable theme. For example, one high-profile case of such a scam was the cryptocurrency project inspired by the acclaimed Netflix series “The Squid Game“. Based on BSC, the token – called ‘SQUID’ – became very popular and skyrocketed in price before the developers abandoned the project leaving investors with millions of dollars in losses.

If we look closely at the project list listed by PeckShield, we will see that some tokens also take advantage of popular brands or themes. “amazon“, “FIFA“, “NETFLIX” Y “GitHub” are some of the names behind the potential scams.

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Sources: CryptoBriefing, CoinDesk, archive

Article versioned by Hannah Estefanía Pérez / DailyBitcoin

Unsplash image edited in Canva

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