Blockchain security firm PeckShield Inc said Thursday that it has identified more than 50 potential scam tokens on the Binance Smart Chain (BSC).
PeckShield analyzed dozens of smart contracts for early-stage projects and found malicious functions that allow team leaders, who operate incognito, to create unlimited tokens, blacklist accounts, and delete prevent users from selling their assets.
As such, the firm warned against the threat of a potential “rug-pull” by the promoters of the project, according to a Tweeter January 13. A “carpet pull” occurs when developers in the cryptosphere run away with funds from investors, abandoning a project.
PeckShield noted that the smart contracts for the tokens in question were developed with clear malicious intent – allowing investors to buy the tokens, but unable to sell them, as the price of the asset appreciates.
This strategy, often referred to as a “honeypot”, is popular with cybercriminals, who prey on FOMO (fear of missing out). When the token price reaches a level that project managers consider good enough, they exit the scam, leaving investors to hold worthless “bags”.
A classic example of the “honeypot” is SQUID, a token created after the beloved Netflix show of the same name, Squid Games. The token soared over 28,000% in a matter of days before plunging to zero after the project founders pulled the rug, stealing $12 million.
Red flagged PeckShield tokens such as BabySquid, bnbRocket, AstroCoin and others. Most tokens are worthless due to a lack of users, but one particular token using the TRUMP symbol stands out.
TRUMP, which has a total supply of 100 million, has seen a trading volume of around $145,000 over the past seven days. Some 271 investors currently hold the token which has shown liquidity of just under $30,000 on Pancakeswap.
PeckShield warned investors to “stay away” from TRUMP, describing the token as “high risk,” in a separate tweet. The Binance smart chain has seen a wave of “rug pulls” in recent months. The latest involves the theft of over $2.6 million in crypto from multiple initial dex offerings (IDOs), such as reported by the security company Rugdoc on January 12.
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