In an unfortunate and alarming event, Lucky Star Currency (LSC), an altcoin token based on the Binance Smart Chain, has suffered a devastating blow. According to renowned blockchain security firm, PeckShield, the developer of LSC is reported to have enacted a so-called ‘rug pull’ on its users, resulting in an estimated loss of $1.11 million and sending the token’s value spiralling downwards. The aftermath left the altcoin value at close to zero.
By dumping a staggering three million LSC tokens from separate contracts, the scammer pocketed a hefty profit in Binance USD (BUSD). Transaction records reveal that an astonishing 1.4 million tokens were sent to the exit address from a single source, while another 1.65 million tokens were added from a different point. It’s a shock to see the LSC token, with a former market cap of $28.7 million, now scarcely trading at $0.01036 and a market cap reduced to just $101K.
This isn’t an isolated incident in the crypto world. ‘Rug pulls’, or exit scams, entail fraudulent developers establishing a fresh crypto token, inflating the token price, depleting entire investor funds, and disappearing as the token value crashes. The LSC case adds to a rising number of malicious crypto schemes.
In fact, a 2022 report from blockchain risk monitoring enterprise Solidus Labs alarmingly points out that every hour reveals 15 fresh scam tokens. Moreover, nearly two million investors have found themselves at the losing end to rug pulls. To add fuel to the fire, the report emphasises a shocking statistic: about “12% of all Binance Smart Chain-based tokens are rug pulls.”
The prevalence of such scams is evident from the Datawrapper database, which tracks rug pulls and scams in cryptocurrency. Reportedly, there were four crypto rug pulls alone this month. Last week, CommEx token also became a victim of a rug pull event, witnessing a strategic withdrawal of liquidity by the developer, which resulted in an approximately $154,000 loss for investors.
The growing frequency of these scams underscores the paradoxical reality of the crypto industry: an inspiring technological advancement on one hand, but a treacherous landscape not devoid of risk on the other. It signals investors to tread with caution and ensure due diligence before deep diving into the crypto world.
Source: Cryptonews
