Random altcoin exploits and ‘rug-pull’ have become commonplace on the BNB Blockchain. Blockchain security platform PeckShield has detected a new scam on BNB Chain. After the emergence of the rug-pull, the altcoin price zeroed vertically.
They pulled the carpet, altcoin price reset!
cryptocoin.com As you follow, the crypto money market frequently encounters hacking and fraud events. Now, one more has been added to them. Blockchain security platform PeckShield has identified a $17 million rug-pull case from project FLARE. However, the fraudulent project has only a name resemblance to Flare Networks. The altcoin price, which was at $ 25 before the rug-pull, then went below zero. PeckShield shared the following along with the price chart of the relevant altcoin project:
It looks like the FLARE dump has been dumped/exploded.
It seems $FLARE is dumped/exploitedhttps://t.co/gXoVu1r2wG pic.twitter.com/ixUtknwW92
— PeckShield Inc. (@peckshield) November 13, 2022
PeckShield also noted that 4,000 BNB, which was the subject of fraud, was tried to be lost through Tornado Cash.
Stolen funds/loss is approximately $17 million. Of these, 4,000 BNB is laundered through TornadoCash.
The stolen funds/loss is about ~$17M and 4,000 BNB of them are being washed via @TornadoCash https://t.co/u6HpyRsC8y pic.twitter.com/3Q4sv9i8ub
— PeckShield Inc. (@peckshield) November 13, 2022
What you need to know about rug-pull
In a carpet draw, their project’s tokens are pumped before they disappear along with some of the funds. The scammers then disappear, leaving their investors a worthless asset. When rogue developers create a new crypto token, it first starts raising the price. It adds as much value as possible before leaving the project. Then the carpet pull takes place and the corresponding altcoin price drops to zero. So, carpet pulls are a kind of ‘exit scam’ and a decentralized finance (DeFi) exploit.
Before learning how to detect a carpet pull in crypto and why crypto carpet pulls happen, it helps to understand the three different types of carpet pulls. There are three main types of carpet pulling in crypto: liquidity stealing, limiting sell orders, and dumping.
Liquidity theft
Liquidity theft happens when token creators withdraw all tokens from the liquidity pool. Doing so removes all value injected into the currency by investors, bringing its price to zero. These ‘liquidity shots’ often happen in DeFi environments. A DeFi carpet pull is the most common exit-scam scam.
Limiting sell orders
This type is a subtle way for a malicious developer to scam investors. In this case, the developer codes the tokens so that they are the only party that can sell them. Developers then expect individual investors to purchase their new crypto using paired currencies. Paired currencies are two currencies paired for trading, one against the other. When there is enough positive price action, they abandon their position and leave a worthless token behind. The Squid Token scam is an example of such carpet pulling actions.
Dumping
Dumping happens when developers quickly sell their own large token offerings. Doing so lowers the price of the cryptocurrency. It allows the remaining investors to hold worthless tokens. “Dumping” usually occurs after heavy publicity on social media platforms. The resulting spike and sale is known as the Pump-and-Dump Chart. Dumping is more of an ethical gray area than other DeFi carpet pulling scams. In general, it is not unethical for crypto developers to buy and sell their own currencies. When it comes to DeFi withdrawals, “dumping” is a question of how much and how fast a coin sells.
