A highly sophisticated scam operation, employing programmatic techniques has orchestrated the creation of more than 1,300 fraudulent crypto tokens since April 2023, duping over 42,000 victims and siphoning $32 million reveals an analysis by security researchers at Blockfence. The intricate scheme involves automatic token creation mimicking legitimate companies introducing fake volume to lure traders and strategically cashing out tokens all while maintaining deceptive security appearances.
Automated Scam Tactics
The programmatic nature of the operation, orchestrating tasks such as token creation, liquidity pool deployment and rug pulls suggests a potential single organizer leveraging AI for tasks like generating token names. Despite passing security measures the scammers retain control allowing them to burn tokens, mint infinite tokens and manipulate token supply.
Notably, the scam targeted Blockfence itself, with the scammers placing limits on individual token profits (5-20 eth) to avoid detection. Pablo Sabbatella, an investigator emphasizes the automatic nature of the operation and reveals plans to delve into its activities on Binance Smart Chain, Arbitrum, and Base.
As the investigation progresses, Sabbatella highlights the importance of caution for crypto traders. Avoiding sketchy tokens is the primary recommendation acknowledging the inherent high risk. For those willing to take risks Sabbatella advises using multiple fraud detection tools to enhance security measures.
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Protective Measures for Crypto Traders
To shield themselves from similar scams, Sabbatella underscores the necessity of understanding assets before investing emphasizing the perils associated with trading unfamiliar tokens.
Caution remains paramount and traders opting for risk should employ a diverse set of fraud detection tools, relying on the insights garnered from multiple sources for enhanced protection.