Tracking Counterfeit Cryptocurrency End-to-end

Abstract

The production of counterfeit money has a long history. It refers to the creation of imitation currency that is produced without the legal sanction of government. With the growth of the cryptocurrency ecosystem, there is expanding evidence that counterfeit cryptocurrency has also appeared. In this paper, we empirically explore the presence of counterfeit cryptocurrencies on Ethereum and measure their impact. By analyzing over 190K ERC-20 tokens (or cryptocurrencies) on Ethereum, we have identified 2, 117 counterfeit tokens that target 94 of the 100 most popular cryptocurrencies. We perform an end-to-end characterization of the counterfeit token ecosystem, including their popularity, creators and holders, fraudulent behaviors and advertising channels. Through this, we have identified two types of scams related to counterfeit tokens and devised techniques to identify such scams. We observe that over 7,104 victims were deceived in these scams, and the overall financial loss sums to a minimum of $ 17 million (74,271.7 ETH). Our findings demonstrate the urgency to identify counterfeit cryptocurrencies and mitigate this threat. CCS Concepts: • Security and privacy → Intrusion/anomaly detection and malware mitigation; Web application security; • Information systems → Web mining.

Cryptohalal: An Intelligent Decision-System for Identifying Halal and Haram Cryptocurrencies

“…Several authors have recognized the rise in cryptocurrency scams resulting in immersive financial loss for individuals. For instance, Gao et al (2020) explored counterfeit cryptocurrencies and measured their impact by analyzing tokens based on the Ethereum blockchain since it does not enforce any restrictions on the names of newly created cryptocurrencies endorsing attackers to use the same identifier as the official cryptocurrency. They have identified 2177 counterfeit tokens that target popular cryptocurrencies, i.e., Bitcoin and Ethereum.…”

“…Tokens are less frequent to be abandoned due to them being represented as a utility, while coins are speculative instruments. Gao et al (2020) Track and identify fraudulent behaviors related to counterfeit cryptocurrencies…”

Trade or Trick? Detecting and Characterizing Scam Tokens on Uniswap Decentralized Exchange

“…We label the scam token seeds in two ways. First, as Ethereum does not enforce any restrictions on the names and the symbols of the newly created tokens, some fake tokens use identical identifier names to imitate the official tokens to trick victims by means of airdrop scam and arbitrage scam [49]. By comparing the token names and the symbols of all the ERC-20 tokens in Uniswap with the labelled official tokens, we have flagged 4, 021 fake tokens.…”

“…Blockchain Scams. Many kinds of blockchain scams have been studied, including the Ponzi Schemes [33,34,36,44,45,65,66], fraudulent Initial Coin Offering (ICO) [55,74], phishing scams [43,60,71], bitcoin generator scams [32], fake cryptocurrency exchanges [73] and counterfeit tokens [49] , etc. Some of them also used machine learning methods to detect scams.…”

Strategic Diversification for Asynchronous Asset Trading: Insights from Generalized Coherence Analysis of Cryptocurrency Price Movements

“…15 Along with this, unfortunately, there has also been an explosion of scams and clones of existing assets with no inherent use value. 16 In such a rapidly evolving market, portfolio diversification can serve to increase returns for institutional and retail investors while insulating them from the risks of concurrent price collapses of multiple assets and fraudulent exit scams. 17 Analysis of the relationship among price movements of different assets can reveal important insights into the collective behavior of the market, thereby providing an optimal means of portfolio diversification.…”