Technology has been running very fast in recent years and news is following one another at a fast pace, making it very difficult for users to keep themselves adequately updated on the risks that accompany them, providing fertile ground for cybercriminals. It is no coincidence that a recent report drawn up by Check Point Reasearch, an Israeli company specializing in security, has highlighted a growth in scams aimed at those looking to buy tokens.
What are tokens?
The token definition is a bit elusive, as it is a virtual entity that can be used for a multitude of purposes. At the moment, its most common use is to act as a “promissory note” for those who want to develop a service, creating them through the blockchain. Taking a practical example, if a company wants to develop a video game, it can sell the related tokens (created via blockchain) and, when the game is completed, users who have purchased the tokens will be able to use them to pay for services, weapons, skins. and so on. The Check Point Research report reveals that more and more scams aim to sell tokens and make paid money disappear, leaving buyers with a handful of flies. An example of this type of scam was seen late last year, when a company declared its intention to develop a video game based on the hit series “The Squid Game”.
The Minecraft case
Since the brand to which it was theoretically linked was very strong, many ran to buy the tokens to use in the game, causing the price to rise, but once they reached a maximum of over $ 2,000, the “developers” (who in in this case they were nothing more than scammers) they shut down everything and made them lose track of the money paid with the tokens, which in the end had a face value of less than 3 thousandths of a dollar each. A net gain of millions of dollars. A similar thing happened a few weeks ago with a “private” Minecraft server. The reason why it is easy for users to fall into these traps depends on the fact that in the collective imagination the blockchains, used to generate the tokens, are associated with high security levels, but this is not valid all round.
How does it work
The tokens, in fact, are generated by what are called smart contracts, i.e. programs that are automatically launched when conditions are met (in the case of most scams, a user makes a payment and a confirmation is sent to proceed). This activates the blockchain for the stipulation of the contract without, however, the conditions being verified. Scammers just need to enter the “right” conditions and the scam is served. According to the report, the most common “halter” conditions that make money disappear are: set up a commission on sales equal to 99 or 100%; prevent the buyer from reselling the token and only allow the person who generated it to do so; placing commission on sale of 99% so that most of the proceeds go to whoever generates the token; generate tokens using the cryptocurrencies contained in the seller’s wallets.
But how are these scams carried out?
First of all, the scammer creates a smart contract capable of producing fraudulent tokens, or, if he is not capable, he uses a service available on the Internet (yes, the criminals have organized themselves for this too) or modifies one that is already available and that you know be fraudulent, simply by changing the name. It then manipulates its functions to decide how it will steal the money: usually it uses one of the techniques we listed above. At this point, launch an advertising campaign on social media generating anticipation and enthusiasm for the product to which the token is tied and start selling them. Finally it adds a time lock, a function that delays the buying and selling activities which are used to avoid certain types of speculation and therefore give a semblance of seriousness to the operation. When the value of the funds raised reaches the scammer’s goal, he eliminates the time lock and runs away with the money.