Cryptocurrency experts uncover multimillion-dollar scam with fake digital tokens

A team of researchers from Check Point has discovered a new type of fraud involving fake crypto assets. Using the Threat Intel system, the experts identified a malicious crypto wallet that was involved in illegal transactions.

Monitoring of the crypto wallet’s activity allowed to detect 40 different Rug Pull scams. The essence of the fraud is to create fake tokens and deposit funds into the liquidation pool, creating the appearance of legitimacy of virtual coins. Fraudsters then organize fictitious trades to simulate real purchases and sales.

Attackers «pump up» the volume of the token, creating the illusion of high demand — all to attract buyers. After attracting a sufficient number of investors, fraudsters withdraw funds from the liquidation pool.

As an example, the researchers cite the GROK2.0 token, the name of which is most likely borrowed from the GROK artificial intelligence system, which has recently been actively promoted by Elon Musk.

The criminals used two smart contracts to trade and artificially increase the volume of the token. One of the contracts was activated 226 times for this crypto asset alone. The second smart contract used a different address, and an operation was performed to artificially increase the volume of the token. In total, the fraudsters were able to withdraw funds from their liquidation pool 81 times.

Check Point experts pledged to protect the crypto community by actively monitoring domains associated with the identified fraudster’s cryptocurrency wallet.