Hackers are abusing misconfigurations in smart contracts to launch token rug pulls, researchers say.
Despite the current volatility in the cryptocurrency market, with prices for many popular coins including Bitcoin (BTC) plunging, interest in the crypto, token, and NFT spaces remains stable.
2021 was a record-breaking year for cryptocurrency-related theft and fraud. Cybercriminals netted an estimated $14 billion in cryptocurrency and fraudulent schemes involving digital assets continue to evolve.
On Monday, Check Point Research (CPR) said that scammers are now turning their attention to smart contracts, with misconfigurations utilized to launch new crypto tokens — before an inevitable “rug pull” takes place.
Rug pulls occur when developers of a crypto or virtual asset project manipulate a token’s perceived worth and then abandon the project – taking investor funds with them.
A recent example is the SQUID token which, at its peak, saw the token reach $2,850 in value. Once the developers rug pulled and prevented traders from selling, the coin crashed by over 99.99%, rendering it basically worthless while netting the developers millions of dollars.
There are some indicators of a potential token scam, including 99% buy fees and mechanisms that prevent investors from reselling. According to the researchers, flaws in smart