This scammer wants your money. Here’s how he’s gonna get it…
Recently exploring new projects in which to invest and trade I’ve realized how advanced scams have gotten. I felt for one. So in this article I’m going to share with you how to protect yourself and what to look for.
TL;DR: New token pairs are being added to pancakeswap and uniswap. Those pairs are heavily modified, meaning the chart is being drawn by people with a lot of money that fake buys and sells. Every trade is faked. You can buy but you can’t sell. Don’t be lazy to not fall for it.
By using Dex Screener I was looking for new pairs. One of them called AISHIBA. I was lazy so I didn’t check much about the project, I just saw the chart which looks like the following and I saw a clear pattern:
See a pattern? It looks like a real token with balanced buys and sells. Anyone with a few trading experience can see a pattern where the token price creates 4 new highs before dropping.
This is what I mean:
This pattern is repeated 4 times. Four highs, then a drop. Four highs and a drop. And every 4 highs it’s a new all time high.
Or in other words, the token keeps creating new highs. So no matter when you bought it, you can reasonably expect a new all time high and cash out with a profit.
So it’s all good, you go and buy the token, then see how you’re making money and your investment grows. But when you try to cash out…
You can’t sell the token. You always get a transfer error and that’s because the contract allows buys but not sells. Now I did invest little money to see how this would turn out.
I didn’t check the contract or socials. Yeah it was my fault. But you can’t reasonably expect people to do that when they are just looking around.
In fact I didn’t even intend to invest into this project. I just saw the clear opportunity and greed took over.
That’s exactly what is most likely happening to many many traders and investors out there. Now mind you, this token was in the top 5(!) of new pair listings in dex scanner which means a lot of people where putting money into it.
A lot of people were looking at it which made them fall for it.
In short, scammers made a token, added a lot of liquidity to seem like a real token and then faked buys and sells to create a realistic chart when in reality nobody can sell the token. Only they can sell the token. So they get money from people.
Now as a blockchain developer I naturally went to the smart contract code and what I found is surprising:
It’s the regular smart contract for ERC20 tokens but all the functions and variable names are obscured, meaning they are changed for random letters so regular people can’t understand what’s going on and experienced developers have a hard time reading the code.
Here’s how it looks like like just so you know, this is the code from the contract 0x8008e25Efeb53ae7784cA674A0B2b967f2cA3B02 DON’T invest into this scam token you won’t be able to sell it!:
See? It’s a bunch of confusing variable and function names. What should have been called “transfer()” is now “lalWQmClqCda()” so you can’t read it easily.
Now given enough time and patience an experienced smart contract developer can see what’s going on. It basically won’t allow you sell tokens, only buy them.
That’s why you must be extremely careful with the projects you invest into.
These scammers have added $123,000 dollars of liquidity just so this token looks real. I imagine it’s all stolen money. Don’t fall for it.
When it doubt, don’t invest into the token or if you’re gonna do it make it a super small amount like 10 dollars or less just so you can see if it’s for real or not. Luckily I didn’t put much money into it.
Are the token price increases made by the scammers? Could be. I would venture to guess that the token price increases are from people buying the token and falling for the scam. All the price drops are the scammers selling and getting their profits.
So in summary, to prevent losing your money in one of those sophisticated scams do the following:
- Look for the twitter and website of that project. Dex Screener has a button to search that token $cashtag in twitter. If you don’t see many results or it’s a bunch of people talking about another token, don’t invest into it.
- Take a look at the token contract code. Specially when it comes to the transfer function and see if there’s something fishy going on.
- When researching new token pairs, always start with a very small amount. Something you can easily afford to lose.
If this helped you, share it with your best crypto friend because it’s too easy to fall for it when you aren’t paying attention!