Knowing these crypto scams will save you.
- November 19, 2022
- Guides & Reviews Kuro Writes Project Reviews
- Kuro Satoshi
Smart contracts are programs that are executed across a decentralized network of distrusting nodes. Smart contracts are usually written using a dedicated high-level smart contract programming language (e.g. Solidity). The major advantage of smart contracts compared to traditional programs is that they allow one to carry out complex transactions among anonymous distrusting parties without the need for a central authority. However, recently attackers started using smart contracts to lure users into traps by deploying contracts that disable selling and mint unlimited tokens.
These scammers create tokens and send them to different addresses. Sometimes they even send it to renowned addresses to trap investors. For example, this contract address (0xA56bF9d39679b8bd450337C2Ad378bfD4F30B19a ) minted 100,000,000 FLK tokens on the bnbchain and allocated 20% to an address labeled as Gate.io. Gate.io is a trusted cryptocurrency exchange established in 2013. Investors invested when they see that Gate.io invested in the project. The sad truth is that Gate.io didn’t invest in that scam token. The scammers use a method called spoofing. Spoofing is a cybercrime that happens when someone impersonates a trusted contact or brand, pretending to be someone you trust to influence your decision or steal sensitive information. In the above activity, the scammer pretends to be Gate.io and lures investors. They dump the token as soon as the price rises leaving the investors with worthless tokens.
Another scam I fell for is (……………). I don’t know what name to give to it. Maybe by the end of the reading, you can help me name it.
It all started like this. Dexscreener posted newly added to their telegram group. I copied the contract address and search on the bscscan and saw this token named (SAFEZONE with a total supply of 1 000 000. I bought $10 with the expectation to make $50+ in the next 30 minutes. I made $30 paper profit in 10 minutes and I decided to swap it into BNB on pancakeswap. I tried to swap several times but it wasn’t working. This is the message I received.
What actually happened ?
The scammer had disabled the selling of the assets in the smart contract. It’s like a trap. If you enter, you can’t get out. Because selling is disabled the coin made 500% in less than 20 minutes. Sometimes. You can see some coins making even up to 10M% within 24hrs. I know, you are having somecalculations going through your mind. “10M% ? meaning, If I invest $10, I can make $1M in 24hrs?” That was the same way I was thinking before betting. But the sad truth was none of the investors will ever get their money back.
So, what happen next?
Don’t forget I said the total supply SAFEZONE is 100000 .
It was actually not. I checked bscscan to see the onchain activity of the token only to be shocked by what I saw. The scammer was able to sell 100 quadrillions of SAFEZONE tokens. Interesting right?
The scammer minted 100 quadrillion tokens which didn’t show on the chain. He dumped the token causing the price to fall to 0. I’m left with a worthless token in my wallet.
The scammer profited $85,837.00from the activity. I lose $10 and others lose up to $6000.
“Honeypot” is a term often used in cybersecurity to refer to something designed to attract someone. When honey is poured into a pot and exposed, what happens? You will see flies and ants entering the pot. The same applies to this type of scam. The scammer exposes his / her private key of the wallet containing huge . Anyone who get access to the wallet would like to drain it. And gas fee will be needed for the transfer.
Here is an example
The scammer sent his private key to me. but I did not border to check because I know about that scam already.
If it was to be others who had no idea about this scam, they will access the wallet with the private key. Seeing $15,000 in it, they will start thanking their God or whatever. who might blame them? we all like free money.
The victim will deposit the gas to process the withdrawal. As soon as the gas fees enter the wallet, the scammer will send it to another address. The transaction is done with a bot that is built and attached to the wallet. The transaction happens so quickly usually 13 seconds. Honeypot scam is a game of numbers. Imagine the scammer is able to send this message in a telegram group of 10k, at least 3k people will fall the scam. if each of the 3k deposits $5, the scammer will make $15k.
From the above scams, you can see that there is no proper research before investing. here are a few ways you can avoid them.
CHECK BEFORE INVESTING
- If more than 50% of coins are in a dead wallet, a project is relatively protected from rug pulls (but not a honeypot) (usually identified as 0x000000000000000000000000000000000000dead). If less than half of the coins are dead or none are dead, be cautious.
- No audit: The chances of a honeypot are nearly always eliminated if a trustworthy company audits them.
- Large wallets holders: Avoid cryptocurrencies that have only one or a few wallets.
- Scrutinize their website: This should be pretty straightforward; but, if the website appears rushed and the development is poor, this is a warning sign! One trick is to go to whois.domaintools.com and type in the domain name to see when it was registered for a website. You might be quite sure it’s a fraud if the domain was registered within 24 hours or less of the project’s start.
- Check their social media activities