Security Firm PeckShield Detects 50 Potential Scam Tokens on Binance Smart Chain

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In Brief
  • Peckshield Inc has identified more than 50 potential scam tokens on the Binance Smart Chain.

  • The firm analyzed dozens of smart contracts for early-stage projects and found malicious functions that allow team leaders to blacklist accounts and prevent users from selling their tokens.

  • Rug pulls are becoming common place in the crypto industry.

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Blockchain security company PeckShield Inc said Thursday that it has identified more than 50 potential scam tokens on the Binance Smart Chain (BSC).

PeckShield analyzed dozens of smart contracts for early-stage projects and found malicious functions that allow team leaders, who operate incognito, to mint an unlimited number of tokens, blacklist accounts, and prevent users from selling their assets.

On this account, the firm warned of the threat of a potential “rug-pull” by project developers, according to a tweet on Jan. 13. A “rug pull” happens when developers in cryptosphere make off with investor funds, abandoning a project.

PeckShield noted that the smart contracts for the tokens in question have been developed with clear malicious intent – allowing investors to buy the tokens, but unable to sell them, as the asset price appreciates in value.

This strategy, often referred to as a “honeypot”, is popular with cyber-criminals, who prey on retail FOMO (fear of missing out). As the token price reaches a level considered by the project leaders as good enough, they exit scam, leaving investors holding worthless ‘bags’.

A classic example of the “honeypot” is SQUID, a token created after the beloved Netflix show of the same name, Squid Games. The token soared more than 28,000% within days before plunging to zero after project founders pulled the rug, stealing $12 million.

PeckShield red-flagged tokens such as BabySquid, bnbRocket, AstroCoin and others. Most of the tokens are valueless because of a lack of users, but one particular token using the ticker symbol TRUMP stands out.

TRUMP, which has a total supply of 100 million, clocked around $145,000 in trading volume over the past seven days. Some 271 investors currently hold the token that posted a liquidity of just under $30,000 on Pancakeswap.

PeckShield warned investors to “stay away” from TRUMP, describing the token as “high-risk”, in a separate tweet. The Binance Smart Chain has seen a flurry of “rug-pulls” in recent months. The latest involves the theft of over $2.6 million in crypto from several initial dex offerings (IDO), as reported by security firm Rugdoc on Jan. 12.

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Jeffrey Gogo is a Zimbabwean financial journalist with more than 18 years of experience covering local and global financial markets; economic and company news. A climate change enthusiast, Gogo first encountered bitcoin in 2014 and began covering crypto markets in 2017.

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