Text | Ratchet Pizza
Text | Ratchet Pizza
Contract liquidation, funds running away, being harvested by ICO and killing pigs... In the currency circle, the pitfalls encountered by players are too numerous to enumerate.
But many people don't think that they may even be victimized by "counterfeit money".
With the popularity of decentralized exchanges, scammers have a new harvest.
secondary title
Counterfeit money is rampant
Compared with banknotes, how advanced is the blockchain-based digital currency in terms of technology?
"Payment is fast and convenient." "No counterfeit money will be encountered." Many people will answer without thinking.
Is this really the case?
In fact, in the currency circle, there are many counterfeit coins.
A recent news related to it happened on July 5th. On the same day, the DeFi data platform DeFiprime exposed more than a dozen "counterfeit coins" related to DeFi on Twitter.
In general, counterfeit coins in the currency circle can be divided into the following modes.
The first type is a currency issued in the name of a well-known project.
For example, in the DeFi industry, well-known projects such as dYdX and Uniswap have not issued coins, but scammers have issued so-called dYdX coins and Uniswap coins in the name of these projects to induce uninformed people to buy them.
The second type is a currency with the same name as a well-known currency. They are very deceptive and can easily deceive the player.
Last month, the DeFi project Balancer posted a warning on Twitter that a counterfeit Balancer token BAL appeared on Uniswap. At that time, the real currency BAL had not yet been issued.
When searching for "BNB" on the Ethereum browser Etherscan, there are a total of 15 search results. Among them, except for the first one, which is the platform currency BNB officially issued by Binance, the other projects have nothing to do with Binance.
Among these counterfeit BNBs, the names (TokenName) and tokens (Token Symbol) of some coins are both BNB, and the names of some coins have the words Binance, such as Binance Block, Binance Token, etc., which are extremely confusing.
Looking back at history, the proliferation of counterfeit money in the currency circle began in 2018.
What is even more ironic is that after the launch of the EOS mainnet, there have been more tokens with the same name as EOS on the EOS platform. EOS browser EOSPark data shows that at present, there are 5,213 EOS tokens in total, and 289 tokens with "EOS" in their name, most of them are named "EOS".
There is even a counterfeit coin issuer called "fake EOS coins" (fakeeoscoins).
In the case of counterfeit money flying all over the sky, many players have been fooled and suffered heavy losses.
In August 2019, a Reddit user posted that he had been tricked into buying fake Perlin coins (PERL).
According to public information, Perlin is the eighth project of the Binance IEO platform Launchpad, which was launched for trading on August 25, 2019, with an issue price of $0.07.
The user said that the scammer lied to him that he had a low-priced share of PERL in his hands, and that he could make a profit as long as PERL goes online in the future, as long as he sells it. Under temptation, this user bought 145,805 fake PERL.
Soon he discovered that the PERL he bought was inconsistent with the real PERL contract address—he was cheated.
cheater caught
The proliferation of counterfeit money in the currency circle has attracted the attention of regulatory authorities.
On July 9, the official Weibo of the Internet Security Bureau of the Ministry of Public Security disclosed a criminal case of "Telegram digital currency arbitrage". The fraudulent tool used by criminal suspects is counterfeit money.
They faked the name of the Huobi Exchange and formed the "Huobi Global Brick Arbitrage HT Chinese Group Community" on Telegram.
HT is the platform currency of Huobi Exchange. The scammers claim that they have HT "arbitrage" channels, and players can buy low-priced "HT" from them.
"HT Brick Arbitrage Tutorial" published in the Telegram group
image description
Source: Official Weibo of the Network Security Bureau of the Ministry of Public Security
How to do it? The scammer said that players only need to put ETH into the designated address, and they can receive "HT" at a ratio of 1:60.
As of July 13, data from the Huobi Exchange showed that the price of ETH was $244.23, and the price of HT was $4.24. Based on this calculation, the player’s rate of return was as high as 4.3% after completing a brick-and-mortar arbitrage.
"I have also encountered this kind of scam. The scammer said that as long as you send 0.1 ETH, you can get 10.5 HT. According to the current price, you can earn more than 600 yuan by investing 1 ETH, and the yield is close to 40%. "A player in the currency circle revealed.
In order to make the scam appear more real, scammers will also place "tricks" in the Telegram group to pretend to be real users and lure real players to take the bait.
Once the players follow the tutorials of the scammers and transfer their ETH to the designated address, they will receive "HT" - it is not the official HT of Huobi, but a counterfeit currency issued by the scammers.
It has no value and cannot be cashed out on the Huobi exchange.
And once a player finds out that it is tricky, the scammers will throw out another set of excuses, using reasons such as "insufficient recharge amount" and "not enough times to move bricks" to induce them to increase investment and complete the second harvest.
According to information from the Cyber Security Bureau of the Ministry of Public Security, under this fraudulent scheme, since 2019, the above-mentioned criminal gangs have used false HT "smart contracts" to illegally obtain tens of thousands of ETH from the victim, involving a value of more than 100 million yuan.
After the scam was successful, these crooks squandered and bought villas and luxury cars.
At the scene, the police seized dozens of mobile phones and computers, seized tens of thousands of virtual currencies such as ETH, BTC, and USDT, and seized McLaren, Ferrari and other luxury cars and real estate, with a total value of more than 13 million yuan.
image description
Source of luxury cars and villas seized by the police: Official Weibo of the Internet Security Bureau of the Ministry of Public Security
According to statistics released by the digital asset security tracking platform CoinHunter in June 2019, the amount involved in similar scams reached 15,000 ETH, worth 30 million yuan at the time. Among them, a single user was defrauded of 885 ETH at most.
secondary title
Anti-fraud tips
In the currency circle, why are there so many counterfeit currency? This has to start with the routine of counterfeit money scams.
First of all, the threshold for issuing counterfeit currency is not high - most counterfeit currency in the currency circle is issued through the Ethereum ERC20 protocol, and the required capital and technical threshold are extremely low.
There was an article circulated on the Internet, which introduced the issuance process of Ethereum ERC20 tokens.
According to the article tutorial, most players in the currency circle can issue a token of their own within 10 minutes.
Compared with making counterfeit money in reality, it is almost no difficulty to make counterfeit money in the currency circle.
In addition to issuance, if scammers want to make a profit, they also need to "sell" the counterfeit currency.
And this step is the core of the counterfeit currency scam in the currency circle.
In the past, scammers marketed counterfeit coins and induced players to buy them one-on-one. The aforementioned "HT moving bricks" and "PERL low-cost private placement" are common expressions.
But this way of selling is inefficient and slow. Now, scammers have a new way to sell — decentralized exchanges.
In the past year, decentralized exchanges on DeFi have been highly sought after. Taking Uniswap as an example, DeBank data shows that its recent average daily trading volume has increased by 380% compared with the same period last year.
Compared with centralized exchanges, most decentralized exchanges do not set a threshold for listing coins. This means that counterfeit coins can also be freely traded on decentralized exchanges.
For example, on Uniswap, players can trade digital currencies in two ways: the first is to enter the name of the token they want to trade in the search box, such as BAL; the second is to enter the contract of the token in the box address.
Under such circumstances, some players have long said that when searching for BAL on Uniswap, they encountered counterfeit coins.
image description
The search results of BAL in Uniswap, the top is the real currency, and the bottom is the counterfeit currency
In addition, even if the counterfeit currency has not submitted an application on Uniswap, as long as the player copies the smart contract of the counterfeit currency, the counterfeit currency can also be traded on Uniswap.
Compared with the token name, the contract address of each token on Ethereum is unique, and it is impossible to have the same name. Verifying the contract address can directly avoid being cheated.
But for novice users, these addresses are like a string of garbled characters, and it is not easy to distinguish which address is the real currency and which is the counterfeit currency.
"If a decentralized exchange increases the threshold for listing coins, it will be no different from a centralized exchange; but if it does not set a threshold, it will be used by counterfeit currencies." Sun Yuan, a blockchain researcher, said that this contradiction is unavoidable, "maybe That’s the price of decentralization.”
He reminded that we should be wary of arbitrage, over-the-counter transactions, low-cost exchanges, and transactions on decentralized exchanges. Counterfeit money often flows in through these channels.
And the most important thing is not to have the mentality of taking advantage of small advantages. "What you value is other people's interest, and what others value is your principal."
From ICO, funds to counterfeit currency, scams in the currency circle are being introduced.
In fact, all scams take advantage of the weakness of human nature. Players driven by greed will eventually be eaten back by greed.
