Crypto For Dummies

Honeypot scams are very common in crypto trading. It usually happen when a token can’t be sold after buying it. Hopefully, there are many websites you can use to scan through a tokens and spot malicious code line in their contracts.

But, scammers can be very clever and use different technique to make their tokens look more legit. Like I mentioned above, websites like Token Sniffer or Go Plus Labs can be used to scan token contracts and spot honeypot risk or or malicious risks. But sometime, even these sites failed to see major issues to token contracts. As a trader, you really need to dig deeper in your research.

This scam I came across completely fooled me and blowed my mind, so I had to make a blog post to warn others. I did the routine scan on Go Plus Labs but fail to see any major risk to the token contract, so I bought some tokens but only realized I couldn’t sell them later.

What really motivated me to buy some $CETUS tokens (the scam token) is when I saw who else was holding it. A wallet called Binance Hot Wallet is holding 3.31% of the 1 Billion total supply, and Gate Io is holding 1.60% of the supply.

These wallets seem to be legit wallet from Binance and Gate Io. You can check them yourself here. Binance and Gate Io are 2 big credible crypto exchanges, so having them here can convince anyone of the legitimacy of this token contract.

One anonymous wallet is the biggest holder with 75% of the total supply. After further investigation of this wallet on Debank, I figured it’s also the LP holder on Sushiswap.

I finally determined this is indeed a scam and the scammer probably sent some of his shitcoins to Binance and Gate Io in order to fool investors.

This technique is pretty common with meme coins as they send tokens to Vitalik Wallet and use it a promotion. Here, we can see the target moved to credible crypto exchanges.

But why crypto exchanges?

From my research, I found a legit project called Cetus was launching their token $CETUS on major exchanges on May 10. This fake $CETUS was launched on Sushiwap on May 8. The scammer clearly used the buzz surrounding the launch of the real token to release theirs earlier to confused investors.

Not so obvious honeypot risk

Although Go Plus Labs detected no honeypot risk in the contract, I failed to notice the blacklist function. The blacklist function is prevent some addresses to be able to trade normally (honeypot risk). In this case, I assume all other addresses beside those from the scammer are blacklisted.

Conclusion

The takeaway here is to make you vigilant about fake tokens mimicking legit token about to be released. As it turns out, these scammers send their tokens to major exchanges to fool investors. So be very careful and only get your information from official links from any project you are interested in.

Update: May 10, 9:35 PM

My suspicion has been confirmed. The top holder was indeed the scammer wallet. As you see, their wallet drained the LP and sold more than 800 Trillion $CETUS for 247,952 Dollars.

As you can see in the below picture, that top holding wallet has now 333,332,464,877,879,735,313.860580108594325721 tokens!😳 This clear means the contract minted additional tokens. Also, notice the LP has now 868,456,231,379,639 tokens.

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