Coinbase Blockchain Network Falls Victim To Over 500 Scam Coins

• Coinbase’s blockchain Base has more than 500 scam tokens in its network.
• Solidus Labs reported that scammers earned $2 million from these fraudulent coins.
• Coco-Cola launched its first NFT collection on Base on August 13.

Crypto exchange Coinbase’s new layer 2 blockchain Base is swarming with scam tokens due to network vulnerabilities. Bloomberg reported this morning that over 500 scam tokens were deployed by developers from mid-July to August 9, when Base mainnet went live.

According to New York-based Solidus Labs which monitors fraudulent crypto transactions, 300 tokens including BASEPEPE (BPEPE) and Baby Yoda (YODA) allowed creators to mint an infinite number of coins, impacting the value in the market. Base users who were not familiar with this feature of the blockchain fell for these scam coins, out of which 60 won’t even let traders resell them. Meanwhile, some of these tokens had 70 smart contracts that featured concealed transaction fee modifiers.

As per reports, the scam tokens raised $3.7 million from trade on exchanges supporting Base. Additionally, scammers profited $2 million from purchases amounting to $2.7 million, sales totaling $700,000, and wash sales equating to $300,000. The crypto security firm further cautioned:

Scam token creators feed on hype, promise, and price & volume manipulation. The hype surrounding the Base network is no exception – so approach tokens that play off of it with caution.

Blockchain analysis company Chainalysis also argued that public blockchains often fall victim to token scams. Their study noted that 24% of the 40,521 tokens introduced last year, turned out to have participated in severe pump and dump activities. Moreover, a single suspected creator launched 264 scam tokens that were highly active initially.

Despite the rising number of scam tokens, Base is onboarding major partnerships including Coca-Cola’s first NFT collection. Released on August 13 in association with its Onchain Summer event, the collection features Edvard Munch’s “The Scream” and Johannes Vermeer’s “Girl with a Pearl Earring.”