February 24, 2024

A recent investigation by Blockfence’s security researchers has unveiled a sophisticated scam operation responsible for creating over 1,300 fraudulent crypto tokens since April 2023, resulting in a staggering $32 million loss for more than 42,000 victims.

Sophisticated coin scam operation has stolen $32 million since April: Blockfence

A sophisticated, programmatic scam operation is behind more than 1,300 scam crypto tokens that have been created since April 2023, fleecing $32 million from over 42,000 victims, according to an…

— OPTIMIST OF UNIVERSE (@Web3Analyst01) January 22, 2024

The scam operates programmatically, generating tokens that impersonate legitimate companies or projects yet to launch their tokens. The process involves introducing fake trading volume to lure unsuspecting traders. Once enough legitimate capital is attracted, the scammers execute a token cash-out, repeating the cycle seamlessly.

Despite appearing secure, the token contracts are deceptive. Scam operators retain control, allowing them to burn tokens at will, create new unlimited tokens, and manipulate the token’s maximum supply.

Pablo Sabbatella, an investigator involved in the analysis, suggests that a single person may band the operation due to the automated nature of various tasks, such as token name the creation and liquidity pool management.

Sabbatella was prompted to investigate after scammers targeted Blockfence with a token named after the company, noting…

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