500+ Scam Tokens Infest Coinbase’s Ethereum Layer-2 Pre-launch
A cybersecurity company specialized in monitoring cryptocurrency activities has revealed that unauthorized developers have introduced numerous harmful tokens onto Coinbase's recently introduced Ethereum (ETH) layer-2 network.
As per the findings of Solidus Labs, a substantial number of fraudulent tokens, exceeding 500 in the count, were integrated into Base shortly after its initial release to developers on July 13th. This occurred prior to the network’s public availability on August 9th.
Among these tokens, nearly 300 of the malicious smart contracts possessed concealed functionalities, enabling the creators to generate an unrestricted quantity of new coins.
Additionally, around 70 contracts contained hidden transaction fee adjustments, while more than 60 contracts featured deceptive measures such as honeypots that hindered token purchasers from reselling their holdings.
The illicit tokens managed to amass roughly $3.7 million in trading volume across decentralized exchanges (DEXs) associated with Base. The rogue assets attracted around $2.7 million through purchases, approximately $700,000 via sales, and roughly $300,000 through wash sales by fraudsters.
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By systematically draining liquidity from their DEX pairs after gaining substantial investments and by producing and vending large volumes of new coins, the perpetrators generated approximately $2 million in profits from this scheme.
Notably, before the network’s official launch, malicious entities also introduced deceptive crypto assets that followed a “soft rug pull” strategy. In this form of social engineering manipulation, developers artificially elevate the crypto asset’s value, only to abruptly withdraw their funds, thereby overwhelming existing investors with considerable selling pressure.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
