Common Blockchain Scams and Hacks
🛑 Common Blockchain Scams
1. Phishing Attacks
How it works: Scammers trick users into revealing private keys, seed phrases, or login info via fake websites, emails, or messages.
Often impersonate wallet providers (e.g., MetaMask), exchanges (e.g., Binance), or DeFi platforms.
May use Google ads, fake browser extensions, or social media.
Example: A fake MetaMask site that asks users to “recover” their wallet with their seed phrase.
2. Rug Pulls
How it works: Developers launch a crypto project (usually a token or DeFi platform), attract investors, then drain funds and disappear.
Common in decentralized exchanges (DEXs) where anyone can list a token.
Often use social media hype and anonymous devs.
Example: Squid Game Token (2021) – Investors lost millions after developers vanished and disabled trading.
3. Ponzi & Pyramid Schemes
How it works: Scammers promise high returns, paying early investors with new investors’ funds — no real business model.
Often disguised as “staking platforms” or “investment clubs.”
Example: BitConnect (2017) – Collapsed after reaching a $2.6 billion market cap. The founders were later charged with fraud.
4. Pump and Dump Schemes
How it works: Organizers artificially inflate the price of a low-volume token via coordinated buying and hype, then sell at the top, leaving others with worthless tokens.
Example: Many low-cap tokens on Telegram and Discord groups are targets for these schemes.
5. Fake ICOs or Token Sales
How it works: Scammers create a fake Initial Coin Offering (ICO), collect funds, and vanish.
May use fake teams, whitepapers, and roadmaps.
Example: Centra Tech ICO (2017) – Backed by celebrities like Floyd Mayweather; turned out to be a scam.
6. Airdrop Scams
How it works: Scammers promise free tokens but require users to connect wallets, perform transactions, or give access to smart contracts that drain funds.
🔓 Common Blockchain Hacks
1. Smart Contract Exploits
How it works: Hackers find bugs in a protocol’s smart contracts to drain funds or manipulate functionality.
Example:
The DAO Hack (2016) – ~$60 million in ETH stolen, leading to Ethereum’s hard fork.
Poly Network Hack (2021) – $600+ million stolen due to contract vulnerabilities (funds were later returned).
2. Flash Loan Attacks
How it works: Exploit DeFi platforms using instant, uncollateralized loans to manipulate prices or drain liquidity.
Example: bZx Protocol Hack (2020) – Flash loans used to exploit price oracles and drain funds.
3. Bridge Hacks
How it works: Bridges connect different blockchains (e.g., Ethereum ↔ Solana). Vulnerabilities in cross-chain contracts can allow attackers to mint or steal assets.
Example:
Ronin Network Hack (2022) – $625 million stolen from Axie Infinity’s bridge.
Harmony Horizon Hack (2022) – ~$100 million stolen.
4. Private Key Leaks
How it works: Poor key management or accidental exposure allows attackers to take full control of wallets or smart contracts.
Example: Admin keys stored on GitHub or leaked in code repositories.
5. Sybil and Governance Attacks
How it works: Gaining a large share of governance tokens (through purchase or manipulation) to pass malicious proposals.
Example: Attempted attacks on DAOs and protocols like Beanstalk in 2022, where hackers exploited the voting system.
✅ How to Stay Safe
Always use hardware wallets for large funds.
Never share your seed phrase or private key.
Double-check URLs and only use verified links.
Research teams and audit reports before investing in DeFi projects.
Use trusted platforms and avoid obscure tokens or DApps with anonymous developers.
Stay updated on security vulnerabilities in the ecosystem.
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