Another day another Rug Pull scam that involves exploiting of smart contract vulnerability.
Scammers are exploiting misconfigurations in smart contracts to create fake cryptocurrency tokens to steal funds from innocent users. According to researchers at Check Point, this newly identified token fraud includes concealing backdoor routines and hiding around 99% of fee functions. This scam comes despite the ongoing crypto market volatility as rates of a majority of the popular coins, including Bitcoin, have plunged considerably.
What are Smart Contracts?
Smart contracts are programs stored on the blockchain platform and executed automatically when the predetermined terms and conditions of the contract are met. Through smart contracts, it is possible to conduct trusted agreements and transactions between different parties without the involvement of a central authority.
Details of the Scam
According to a report from Check Point Research published Monday, scammers are exploiting misconfigured smart contracts to launch new crypto tokens before Rug Pull occurs.
For your information, Rug Pull occurs when a crypto or digital asset’s developer manipulates a token’s perceived worth. After the developer has the rug pulled, traders won’t be allowed to sell the coin, and it will crash by over 99.99%.
In other words, it will