Crypto Scammers Pull Off a Sneaky Rug Pull, Fooling Even the Detectives!

Group of Sophisticated Under-the-Radar Scammers Rugged Over 1,300 Fake Tokens, Reports Blockfence

Scammers tricked 42K victims using FOMO and deceptive code, says Blockfence.

📷

A group of crafty cryptocurrency scammers have managed to pull off a whopping $32 million rug pull scheme since April 2023, leaving over 42,000 victims scratching their heads in disbelief. What’s even more remarkable is that these scammers successfully deceived not only their victims but also some of the industry’s “rug pull detectors.” 😱

According to a recent report by Blockfence’s head of security research, Pablo Sabbatella, these scammers employed a unique method that involved faking the maximum token supply through a process of minting and burning. As if that wasn’t enough, they also employed a cunning code bait-and-switch tactic that even the most vigilant rug-pull detectors failed to detect. Sneaky, huh? 👀

So, how exactly did these scam artists manage to hoodwink thousands of eager investors? Let’s dive in and uncover the secrets behind their devious scheme. 💰💔

• Solana Blockchain Sets New Record for Stablecoin Transfers
• Ethereum and BNB experience continuous growth while Borroe Finance excels in DeFi with an impressive presale in Stage 4.
• Moonwell’s Plan Sparks Controversy as Users Debate the Use of Nomad Collateral to Address Frax Bad Debt

🎭 Impersonating Legitimate Crypto Projects

Like many of their counterparts in the rug-pull business, the scammers began by creating tokens that masqueraded as soon-to-be-launched legit crypto projects. They dangled the carrot of Fear Of Missing Out (FOMO) in front of unsuspecting investors, enticing them to jump in without a second thought.

🔥 Injecting Fake Liquidity

To add credibility to their scam, the scammers injected fake liquidity into their fraudulent crypto project, creating a mirage of legitimacy. They made it seem like their project had a healthy volume in liquidity pools (LPs) on popular Ethereum-based decentralized exchanges such as Uniswap. But what the victims didn’t realize was that it was all smoke and mirrors. 🪞

🔒 The Illusion of Security

Here’s where things get really interesting. The scammers implemented a function called “lock()” on the LP tokens, fooling investors into thinking that they couldn’t be rug-pulled. This was a clever move to give victims a false sense of security, making them believe that their investments were safe from the clutches of these scammers. Little did they know, they were being set up for a massive disappointment. 😈

📈 Pumping the Fake Token

Once the scammer had artificially pumped up the price of the fake token through wash trading, they called the “setUserBalance” function. What did it do, you ask? Well, it updated the victim’s token balance to “1” and technically burned the token, making it impossible to sell. The scammers essentially made the token worthless overnight, while cleverly concealing this fact from the victims who could still see the token in their wallets. Talk about seeing but not believing! 🌚

💣 The Ultimate Dump

As the victims grappled with the shock of their suddenly worthless token, the scammers made their final move. They removed all liquidity from the LP, causing the token’s value to plummet to nearly zero. It was a heart-wrenching blow for the victims, who watched their hard-earned money evaporate into thin air. 😭

But wait, there’s more! The scammers, in an attempt to avoid attracting too much attention (how considerate of them!), would return a portion of the proceeds (ranging from 5 to 20 ETH) to their victims. A small consolation prize for those who were left devastated by the whole ordeal. 😢

🚫 Foiling the Detectives

To make matters worse, the scammers renounced ownership of the token contract once the chaos settled. This cunning move allowed them to avoid detection by some rug-pull detection tools. The victims were left with no recourse, with even the supposedly foolproof detectors marking the scam token as “safe.” It was a double whammy for those who fell victim to this elaborate scam. 🎭

And the List Goes On…

The scammers weren’t content with just one scheme. They impersonated several tokens, including “Blockfence token,” “Wisealth,” “RabbitRun,” “DreamFi,” and even memecoins like “AIPEPE,” “Purple Pepe,” “Pepe Chain,” “Pepe Race,” and “Baby Pepe.” They rode the memecoin trend like a wild horse, reaping the benefits of unsuspecting investors’ enthusiasm. 😵

📉 The Bitter Reality

According to blockchain security platform Immunefi, a staggering $103 million was lost in rug-pull scams and other fraudulent schemes in 2023. It’s a stark reminder that as the crypto space continues to evolve, scammers are becoming increasingly sophisticated in their methods. Investors must exercise caution and do their due diligence before diving into any project. Stay safe out there! ⚠️

Q&A:

Q: How can I protect myself from rug-pull scams?

A: Protecting yourself requires thorough research and due diligence. Make sure to research the project team, read the whitepaper, and check their reputation in the community. Don’t invest blindly based solely on promises of quick gains.

Q: Are there any warning signs of potential rug-pull scams?

A: Yes, there are a few red flags to watch out for. Beware of projects with anonymous teams, unrealistic promises of high returns, exaggerated marketing tactics, and a lack of transparency. Always trust your instincts and be skeptical if something seems too good to be true.

Q: Can rug-pull detectors be trusted?

A: While rug-pull detectors can be helpful, they are not foolproof. As demonstrated by the scammers in this case, some detectors can still miss certain tactics used by fraudsters. It’s important to use multiple sources of information and conduct your own research to make informed investment decisions.

Q: Is there any chance of recovering funds after a rug pull?

A: Unfortunately, the chances of recovering funds after a rug pull are slim. Cryptocurrency transactions are irreversible, and once scammers have made off with your money, it’s challenging to trace or recover it. Prevention is always the best approach.

Q: What can the crypto community do to combat rug-pull scams?

A: Staying vigilant and spreading awareness is crucial. Community members should report suspected scams, share information about fraudulent projects, and educate new investors about the risks involved in the crypto space. Together, we can create a safer environment for everyone.

References:

1. QCP Capital predicts ETH outperform BTC amid ETH spot ETF approval expectations – Link
2. Orbit Chain confirms hack, warns of scam repayment offers – Link
3. Digital asset products record $103 million inflows, assets management maintains $52 billion position – Link
4. DeFi’s billion-dollar secret: The insiders responsible for hacks – Link

Remember, knowledge is power, and staying informed is key to safeguarding your investments. Stay vigilant, and let’s make the crypto world a safer place together! 🚀

---

🔥 If you enjoyed reading this article, share it with your friends and followers on social media! Don’t forget to drop a comment below to let us know your thoughts. 💬

We will continue to update Blocking; if you have any questions or suggestions, please contact us!