PeckShield Says It’s Found 55 Rogue Projects on Binance Smart Chain

Security firm PeckShield has put out a list of 50 potential scam projects on Binance Smart Chain.

PeckShield Identifies Suspicious BSC Projects

PeckShield has published a list of 55 “rug-potentials” on Binance Smart Chain. 

#Scam PeckShield has detected 50+ tokens with rug-potentials. The community may want to be aware before interacting:
· Admin can mint unlimited tokens
· Admin can restrict token selling
· Admin can blacklist any account@bsc_daily #BSC Here is the list:https://t.co/6mBp2HX6Hm pic.twitter.com/fYJAMAPs7H

— PeckShieldAlert (@PeckShieldAlert) January 13, 2022

After analyzing smart contracts of 55 early-stage tokens run by anonymous teams, PeckShield detected malicious functions that let administrators mint unlimited tokens, blacklist accounts, and block holders from selling their tokens. As such, it concluded that the projects may execute a so-called “rug pull” on their investors. “Rug pull” is a popular term used to describe crypto exit scams in which teams abandon projects or sell tokens on exchanges and disappear with investors’ funds.

PeckShield listed the projects it had identified in a Thursday tweet. The firm highlighted that the smart contracts for the tokens are designed in such a way that users can buy but not sell their holdings, creating a “honeypot” scenario. Tokens that employ a honeypot mechanism typically rise in value as more investors buy in before they find out that they cannot liquidate their positions. The token creator can then pull the rug and run off with the funds. Several scam projects have adopted a honeypot strategy to steal investors’ funds in recent weeks. In one high-profile case, a project styling itself on the hit Netflix show Squid Game launched a token called SQUID on Binance Smart Chain. It rallied thousands of percent in a few days before plummeting to zero when the team pulled the rug, making off with about $12 million. 

PeckShield told Crypto Briefing that it “decided to warn the community earlier rather than later” following a discussion with the team at Binance Smart Chain. Discussing how the listed tokens share common issues, PeckShield explained:

“Each token owner’s authority is too large and most of these tokens have too few sellers. Moreover, when interacting with PancakeSwap, the selling may be restricted.”

The good news is that 54 of the 55 flagged projects do not have active users or value locked on them. One token using the ticker symbol TRUMP has some on-chain activity and about $29,500 in liquidity on PancakeSwap. The TRUMP token has about 271 holders and has recorded a trading volume of $144,860 over the course of last week. 

In a separate tweet, PeckShield warned Binance Smart Chain users against trading TRUMP. The post described it as a “high-risk token” because it lets the owner mint unlimited tokens. Crypto Briefing investigated the project and could not source the team’s team, website, or social media channels.

Rug pulls have been a recurring problem for Binance Smart Chain users in recent months. In addition to Squid Game, several other scam projects launched on the network in 2021, resulting in users losing millions of dollars worth of funds. Among the biggest attacks involved TurtleDex and MetaDAO, which respectively stole $2.4 million and $3.2 million from their users.

The trend has continued into 2022, too. The security firm RugDoc reported Wednesday that multiple Binance Smart Chain tokens had “rugged” users after launching Initial DEX Offerings on the network. While Binance Smart Chain has hosted many malicious crypto teams, it’s not the only network that’s seen a wave of rug pulls. As the crypto space has grown, Ethereum has become a hub for similar incidents. Most recently, an anonymous team called EtherWrapped lured Ethereum users in with a fake New Year’s Eve airdrop then pulled the rug. They made off with 30 ETH. 

Disclosure: At the time of writing, the author of this piece owned ETH, and other cryptocurrencies.