Cryptocurrency counterfeiting is on the rise, with security researchers sounding the alarm on a concerning trend that is particularly targeting Fortune 100 companies. A recent report from Resecurity has shed light on the creation of counterfeit tokens that impersonate major brands, government bodies, and even national fiat currencies in the decentralized finance (DeFi) and crypto space.
In the fast-growing world of DeFi and crypto, scammers are taking advantage of investor interest through fraudulent schemes such as rug pulls, leaving investors empty-handed. One recent case highlighted by Resecurity involves a counterfeit token called “BRICS,” which is still tradable and has capitalized on the investment hype surrounding the BRICS intergovernmental organization. The BRICS forum, comprised of Brazil, Russia, India, China, and South Africa, aims to enhance cooperation among its member states on various economic, political, and social issues.
Exploiting geopolitical narratives, bad actors spread misinformation about new countries joining the BRICS alliance and even proposed a gold-backed currency initiative. Leveraging the organization’s global image, scammers conducted an initial coin offering (ICO) to promote the fake token with enticing incentives. Platforms like Lobstr.co, known for facilitating token creation on the Stellar network, have become breeding grounds for such fraudulent activities due to their flexibility, according to Resecurity.
Counterfeit tokens impersonating oil corporations, national regulators, and other significant entities have also been identified by the security company. These scams often reference reputable organizations like the Monetary Authority of Singapore and central banks in the Middle East. Solidus Labs confirmed Resecurity’s findings, reporting that these scams have defrauded over 2 million investors, surpassing victims of major crypto failures like FTX, Celsius, and Voyager. These scams typically manifest as DeFi scams, where token smart contracts are altered to deceive investors, or as exit scams, where investors are betrayed after extensive promotion.
The accessibility and low barrier to entry for executing these scams present significant challenges to the cryptocurrency landscape. Resecurity has called for increased vigilance and robust regulatory frameworks to combat fraudulent activities and protect investors from falling victim to such schemes. It is essential for the industry to remain vigilant and proactive in identifying and thwarting these malicious actors to safeguard the integrity of the cryptocurrency market.