There’s something highly satisfying when karma strikes. None more so than when a crypto scammer gets their comeuppance. A Reddit user posted in the r/pancakeswap subreddit—the public forum of decentralized exchange Pancakeswap—asking for help in returning funds from a BEP-20 token he created.
It turns out this was a scam token mimicking an existing unranked project whose use case is to mine cryptocurrency on mobile phones. Whether on Ethereum or Binance Smart Chain (BSC), anyone can create a token. But with BSC being much cheaper to use, it appears as though scammers are making it their go-to network.
Crypto scammer loses out
In a now-deleted post, the Reddit user at the heart of this storm reached out to the community with this post:
“Hey, I created a token on pancakeswap but now I want my money back. It says I cant trade it back because price impact is too high. So I basically lost. 366$? Please help.”
Analysis of the information shows the user had created the PI token while also selling it on the premise of being the BSC token for another cryptocurrency of the same name. The user’s post history shows him promoting an affiliate link for this other cryptocurrency.
But went trying to withdraw his initial investment, the smart contract didn’t allow him as a withdrawal would significantly impact the token price, due to low liquidity. At this stage, it’s not known whether this is purely a BSC safeguard or whether someone else rug pulled him to trigger the safeguard.
Either way, the comments to his post asking for help were all less than sympathetic.
Binance Smart Chain scams
BSC launched in September last year as a parallel blockchain to Binance Chain. It enabled creating smart contracts for tokens on the BSC network and introduced a new BNB staking mechanism.
The goal is to rival DeFi on Ethereum, and with cheaper, faster transactions, users are flocking to BSC. In half a year, the total value locked (TVL) in BSC has shot up to $43 billion. In comparison, it’s taken almost four years for TVL in Ethereum to reach $65 billion.
Recently, BSC has hit with a series of scams. The biggest to date was MeerKat Finance in early March, which netted scammers a total of $31 million, made up from 14 million BUSD and 72,635 BNB.
Although Binance takes the security of users seriously and has been active in bringing a degree of restitution to victims, such as in the WineSwap exit scam, the fact remains that anyone can create a smart contract token.
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