A group of scammers tricked more than 42,000 people and made $32 million in cryptocurrency scams starting in April 2023.
This scam is special because it used a method that fooled even some expert investigators, as shown by blockchain security company Blockfence.
Usually, these scammers make tokens that look like new crypto projects, taking advantage of people’s fear of missing out to trick them into investing.
Pablo Sabbatella, who works in security at Blockfence, said that they change the maximum number of tokens they can make by creating and getting rid of them. They also use a sneaky tactic with their code to trick people and avoid getting caught.
Sabbatella said that the scammers started by sending about 10-20 Ethereum (ETH) to an outside account, and then used that to make fake tokens.
They put fake money into the scam project to make it look like there was a lot of real money on trading platforms like Uniswap.
Scammers added a lock function to trick investors even more.
To trick investors even more, the scammers put a lock on the LP tokens to make it seem like they couldn’t take the money and run.
Once the price of the fake token went up because of fake trading, the scammer changed the setUserBalance function.
This action made the victim’s token balance go down to “1” and removed the token so it couldn’t be sold.
However, the coin could still be seen in the victim’s wallet, making the trickery worse.
Sabbatella explained that the person who is scamming will take out all the money from the LP, causing the value of the token to drop to almost nothing.
Interestingly, the scammers gave back 5-20 ETH from each scam to avoid getting too much attention.
Another part of the scammers’ plan involved the person who made the contract giving up ownership of the token contract. This could help them avoid getting caught by some detection tools.
Sabbatella said that people who bought the token were tricked because even some tools that are supposed to detect risky investments did not recognize that this token was not safe.
Blockfence found that there were about 1,300 cases where people tricked others on Ethereum using the same method.
Sabbatella pointed out a case where someone used clever tricks to make a fake “Blockfence token” and stole 23. 6 ETH worth $53,000.
Fraudsters are using the craze for meme coins to create fake tokens.
The scammers pretended to be other cryptocurrencies like Wisealth, RabbitRun, and DreamFi to take advantage of the popularity of meme coins.
Different tokens like AIPEPE, Purple Pepe, Pepe Chain, Pepe Race, and Baby Pepe were made to take advantage of the popular memecoin trend.
Although there were still some thefts, the number of hacking incidents against cryptocurrency went down in 2023, even though about $2 billion was lost.
A recent report from De. FI, a well-known web3 security firm, says that hackers stole $2 billion in digital money this year.
Even though the amount is still worrying, it’s the first time that there’s been fewer crypto hacking incidents since 2021.