Crypto scam: 114 scam tokens in one month

Crypto fraud is unfortunately common, but it is often caused by a relatively small number of groups or individuals who are professional fraudsters.

For example, on-chain analyst ZachXBT discovered a single Ethereum address to which funds from as many as 114 scams were sent.

This is a scam that took advantage of the launch of scam coins, which are tokens that are artfully created solely to trick people.

Once created, they were sold despite having no real value. Later, their market value imploded, but by then the fraudster or organization that created them had collected the proceeds from the sale.

Scam Coins: The Crypto Scam Boom

In his tweet, ZachXBT mentions specifically two tokens that on the Uniswap DEX have collapsed in the last few days, namely USDN (Neutrino USD) and GPTLSD.

GPTLSD is reported to have been launched on Uniswap on March 14, 2023, with the price rising above $0.023 on the day it was launched, with a trading volume of over $1.4 million.

The next day, the price had fallen to $0.004, with volume down to $75,000, falling to zero after just four days.

USDN was supposed to be Neutrino’s stablecoin, and until October 2022 it appeared to have stuck with the dollar. Since November, that is, since the collapse of the crypto markets due to the FTX bankruptcy, it has not only lost its peg, but its market value has even fallen below 3 cents on the dollar.

Among the scam coins linked to that address are also PopeElon, ShibTerminator, ProTrumpToken, Doge1Eth, HyperShib scam, Brics scam, Pound scam and a number of other tokens unknown to most, created only to steal funds on DEX.

Some of the names of these scam coins are really unlikely, such as PeppaPig scam, Federal Reserve scam, DecentraBitcoin scam, BBC scam, Robocop scam, and the most common ones are those using the terms Shiba, Shib or Shibarium.

Please note that these are scam coins that have only been created in the last month and a half, so this person or organization appears to be very active. While in 45 days they created 114 scam coins, they create new ones at an average rate of two and a half per day.

Also, this is only one address analyzed, but fraudsters are used to using many different ones.

So the real overall scale of this type of fraud appears to be very large.

The soul of memecoins

There seems to be a vague connection to the world of memecoins, although the latter are born at a much slower rate, and are often created by different teams.

However, the fact that the scammer predominantly uses names related to meme coins, such as Shiba Inu, can hardly be dismissed as a mere coincidence.

Memecoins are often simply tokens created out of thin air, with no project or value, basing their success solely on those who decide to buy and hold them.

Usually their prices decrease after a while, although for example the first meme coin, Dogecoin, over the years has not only lost any value except for 2022, but has even increased in value.

It is worth noting that while scam coins are mainly launched on DEXs, i.e. decentralized exchanges where anyone can list their tokens, successful memecoins are mainly those that manage to land on large centralized exchanges as well.

Prominent among these are Dogecoin itself and Shiba Inu.

Coin scam with scam

ZachXBT did not disclose how the scammers manage to get their scam coins purchased at high prices, nor how much they have earned.

It is worth mentioning that he only analyzed the last month and a half of activity on a single address, which is only a very small part of the fraudulent activity of this type, but he still did not reveal any other details.

Phishing coin scams involve placing tokens created out of thin air and with no real or speculative value on the market, and convincing as many people as possible to buy them at significant prices.

Then the project is simply allowed to die, and their prices plummet to near zero.

In fact, after the initial launch, purchasing demand plummets, causing the price to crash as well.

It’s about making sure there is initial buying demand when all the supply is in the hands of the creators only. In this way, they make as much money as they can immediately, and allow the scam coin to lose value in a short period of time due to the increase in supply and decrease in demand.

As impossible as it may seem, or at least pointless, there are clearly those who buy these tokens who actually just end up giving away their money to scammers.