The scam involves creating fake tokens, adding money to the liquidity pool to create a sense of legitimacy about these tokens, and arranging fake trades to make it appear as if genuine buying and selling were occurring.
Check Point Research team has discovered a new type of scamming operation leveraging a fake token factory to steal millions of dollars from innocent users. Check Point’s Threat Intel blockchain system identified a malicious wallet address that has been involved in “blacklisted activities.”
Researchers then started monitoring the activities linked with the wallet address and found that this address operated forty (40) different rug pulls, and so far, the scammers have stolen 1 million USD.
The scam involves creating fake tokens, adding money to the liquidity pool to create a sense of legitimacy about these tokens, and arranging fake trades to make it appear as if genuine buying and selling were occurring.
Then, the scammers pump up the token’s volume to create an allusion that it is in high demand. This is done to attract buyers. Then, they take the money from the liquidity pool once the token has lured sufficient investors. Researchers explained the scam with an example in their technical blog published on 21 November 2023.
“For example, the token name GROK 2.0, possibly derived from a well-known AI system (X GROK), is intended to attract buyers.”
The scammer used two smart contracts to trade and pump up the token volume. It is worth noting that the function (0x521da65d) is used for selling/buying tokens for the first smart contract. It has been executed 226 times for just this token.
For the second smart contract, the scammers used another address (0x4b2a0290e41623fbfeb5f6a0ea52dc261b65e29b) and executed the function (0xf029e7cf) to boost the token’s volume artificially. From their liquidity pool, the scammer has removed funds 81 times.
For your information, Rug Pull scams are like exit scams, where developers make fraudulent promises and exit right after stealing investors’ funds.
This Rug Pull incident highlights the importance of staying vigilant and informed in the ever-evolving crypto landscape. Investors should be aware of the tactics employed by scammers and conduct thorough due diligence before making any investments.
Check Point is committed to safeguarding the crypto community and actively monitoring domains associated with the identified scammer’s wallet address. Hackread.com will update readers when the company discloses more details on this scam.