A concerning trend in the world of cryptocurrency has been identified by security experts, with a particular focus on targeting Fortune 100 companies. According to a recent report from Resecurity researchers, there has been a rise in the creation of counterfeit tokens that mimic well-known brands, government entities, and even national currencies.
In the fast-growing decentralized finance (DeFi) and cryptocurrency sectors, scammers are taking advantage of investors’ interest by engaging in fraudulent activities such as rug pulls, where they deceive investors and make off with their funds. One recent case highlighted by Resecurity involved a fake token called “BRICS” that capitalized on the hype surrounding the BRICS intergovernmental organization, which consists of Brazil, Russia, India, China, and South Africa.
The BRICS forum, established in 2006, aims to promote cooperation and collaboration among its member states on various economic, political, and social issues. However, bad actors exploited this organization’s reputation by spreading false information about new countries joining the group and even proposing a gold-backed currency initiative. They conducted an initial coin offering (ICO) to promote the counterfeit token, offering various incentives to lure investors.
Platforms like Lobstr.co, which allow for token creation on the Stellar network, have reportedly become popular hubs for fraudulent activities due to their flexibility, according to Resecurity. The security company has also identified other counterfeit tokens that impersonate major entities such as oil companies and national regulators, often referencing reputable organizations like the Monetary Authority of Singapore and central banks in the Middle East.
Solidus Labs recently confirmed Resecurity’s findings, reporting that these scams have defrauded over 2 million investors, surpassing the number of victims from major cryptocurrency failures like FTX, Celsius, and Voyager. These scams typically take the form of DeFi scams, where scammers manipulate token smart contracts to deceive investors, or exit scams, where they betray investors after extensive promotion.
The accessibility and low barrier to entry for carrying out these scams present significant challenges for the cryptocurrency industry. Resecurity has called for increased vigilance and robust regulatory frameworks to combat fraudulent activities effectively. As the cryptocurrency landscape continues to evolve, it is essential for investors to remain cautious and informed to protect themselves from falling victim to such scams.