A crypto surveillance firm says black hat developers have placed hundreds of malicious tokens on Coinbase’s newly launched Ethereum (ETH) layer-2 chain.
According to Solidus Labs, adversaries staked more than 500 scam tokens on Base days after the blockchain debuted to developers on July 13 and before the network became available to the public on August 9.
“Approximately 300 of these scam tokens’ smart contracts contained hidden features that allowed their creators to mint an unlimited number of new coins; another 70 contracts contain hidden transaction cost modifiers; and more than 60 contained honeypots, preventing buyers from reselling their tokens at all.
Solidus Labs says the scam tokens generated about $3.7 million in trading volume on Base’s decentralized exchanges (DEXs). The rogue assets attracted $2.7 million in purchases, $700,000 in sales and $300,000 in laundry sales that the fraudsters made themselves.
The perpetrators managed to make $2 million in profits from the scheme by removing all liquidity from their DEX pairs after a significant number of users invested and by minting and selling massive amounts of new coins.
Malicious actors also placed soft back pull crypto assets on the network prior to launch. In this type of social engineering attack, developers increase the value of the crypto asset and then withdraw their funds, leaving existing investors with overwhelming selling pressure.
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Image generated: Midway through the journey