Fake Tokens Exploit BRICS Investment Hype

Security

A rising trend in cryptocurrency counterfeiting has been identified by security researchers, particularly targeting Fortune 100 companies. 

According to a report published by Resecurity researchers today, these efforts involve the creation of tokens that impersonate major brands, government bodies and even national fiat currencies. 

In decentralized finance (DeFi) and crypto, where rapid growth is prevalent, scammers are exploiting investor interest through fraudulent schemes like rug pulls and escaping with investments.

A recent case highlighted by Resecurity involves a counterfeit token named “BRICS,” still tradable, taking advantage of the investment hype surrounding the BRICS intergovernmental organization, a group of five major emerging economies: Brazil, Russia, India, China and South Africa. 

Established in 2006, the BRICS forum aims to enhance cooperation and collaboration among its member states on various economic, political and social issues.

Bad actors exploited geopolitical narratives, spreading misinformation about new countries joining the alliance and even suggesting a gold-backed currency initiative. Leveraging the organization’s global image, scammers conducted an initial coin offering (ICO) to promote the fake token with various incentives.

Read more on cryptocurrency scams: Approval Phishing Scams Drain $1bn of Cryptocurrency from Victims

Platforms like Lobstr.co, facilitating token creation on the Stellar network, have reportedly become hotspots for such fraudulent activities due to their flexibility, Resecurity said.

Similar counterfeit tokens impersonating significant entities, including oil corporations and national regulators, have also been identified and reported by the security company. These scams often reference reputable organizations like the Monetary Authority of Singapore and Middle Eastern central banks.

Confirming Resecurity’s findings, Solidus Labs recently reported that such scams had defrauded over 2 million investors, surpassing victims of major crypto failures like FTX, Celsius and Voyager. These scams manifest primarily as DeFi scams, altering token smart contracts to defraud investors or as exit scams, betraying investors after extensive promotion.

The ease of accessibility for executing these scams, coupled with the low barrier to entry, poses significant challenges to the cryptocurrency landscape. Resecurity called for heightened vigilance and robust regulatory frameworks to combat fraudulent activities.

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