Ethereum: The Anatomy of a Rug Pull

In the world of cryptocurrencies and smart contracts, rug pulls are devastating scams that can leave investors financially ruined. It’s essential to understand how these scams work before they strike again. In this article, we’ll delve into the details of a famous Ethereum-related rug pull and provide an explanation of how it went down.

The Case Study: 0xc964b291928bb6729b0c757545b68f3738235a75

The rug pull in question occurred on Binance Smart Chain (BSC), which is a blockchain-based platform that foregrounds Ethereum. The scam involved a group of individuals creating and managing a fake Ethereum-like protocol called “Paxos” on BSC. Paxos was essentially a Ponzi scheme that preyed on unsuspecting investors by offering high returns in an unsustainable manner.

The pool was 100% locked

One of the main aspects that contributed to the success of this scam was the use of a “locked pool”. A locked pool is a mechanism where all funds are locked and cannot be transferred or withdrawn. This creates a situation where investors are trapped, with no way to recover their losses.

In the case of Paxos, the pooled funds were 100% locked in a centralized wallet controlled by the scammers. This meant that if anyone tried to withdraw their money, they would face significant penalties and potentially even lose access to their funds completely.

The address

The specific address you mentioned, 0xc964b291928bb6729b0c757545b68f3738235a75, appears to be part of the scam. This address is likely associated with the Paxos protocol, as it contains the same name and symbol.

How ​​Scams Like This Work

To put things in perspective, let’s break down how scammers like the ones behind the Paxos scam typically operate:

• Creating a fake product or service: Scammers create a convincing product or service that appears legitimate and appealing to potential investors.

• Buying a large number of tokens or assets: They buy large quantities of these items in anticipation of high demand and subsequent price increases.

• Convincing investors to invest: Scammers promote their fake products or services by offering exceptionally high returns that seem too good to be true.

• Lock funds

  : To prevent investors from withdrawing their money, scammers lock the funds in a centralized wallet or pool.

• Scammer disappears with the profits: Once the scam is up and running, the scammers disappear, taking their ill-gotten gains with them.

Protect Yourself

To avoid falling victim to scams like this:

• Do thorough research: Before investing in any project or asset, do your due diligence by researching its legitimacy and potential risks.

• Be wary of unusually high returns: If an investment seems too good to be true, it probably is.

• Never invest in a product or service without understanding the underlying technology or economics.

By being aware of these tactics and taking steps to protect yourself, you can minimize your risk and stay ahead of scammers like the ones responsible for this case.