Users of the Shiba Inu altcoin have accused CoinMarketCap of supporting fraudsters. What’s the reason?
At the end of last week there was a lot of drama in the cryptocurrency community, which was indirectly caused by CoinMarketCap. It is used by most investors and traders to monitor the market. However, it has now added three fake smart-token addresses from Binance Smart Chain, Solana and Terra Luna, allegedly belonging to the popular altcoin Shiba Inu (SHIB). Token creators have reacted to this and said that buying through these contracts could result in a total loss of funds. At the time of writing, the smart contracts are still on CoinMarketCap, albeit with a slight clarification from the platform team. We tell you more about the situation.
It should be noted that CoinMarketCap likes to experiment with its own platform. In particular, back in late January 2021 they added the WallStreetBets token to the first place in the cryptocurrency ranking. It was about a fictitious coin that was intended to support a community of the same name on the Reddit platform. Read more about this story in a separate piece.
What’s wrong with CoinMarketCap?
As a reminder, a smart token contract is a code in a blockchain that regulates the logic of an altcoin in the form of its issuance features, transaction terms and so on. In decentralised exchanges, the smart contract search makes it possible to quickly find and exchange the desired token. The problem is that if the wrong smart contract is specified, the investor can either lose their money completely due to fraudulent activity, or buy the wrong token at all.
This also applies to signing requests from smart contracts in cryptocurrencies. Often, scammers embed malicious code in them, which, when confirmed, causes all other coins to disappear from the victim’s wallet. In reality, this malicious code simply allows them to be sent to the scammer’s address without the average user being aware of it.
That's why traders trust platforms like CoinMarketCap or CoinGecko. They go to them, find the token they want, then copy their smart contract and start trading. And if the data is fake, it will affect both the fate of investors' funds and their trust in those platforms.
SHIB smart contracts on CoinMarketCap
The addition of new smart contracts for Shiba Inu was noticed by the community – and many immediately accused CoinMarketCap of “supporting hackers”. Here’s a tweet by a user nicknamed wenfloat, for example, which was retweeted by a SHIB developer under the alias Shytoshi Kusama.
If you are going to allow scammers to add false contracts to our page (WE WORK ONLY IN ERC-20 STANDARD), you must remove SHIB from your platform. At least you won’t be promoting hackers. You have been ignoring us for months, where is your professionalism?
CoinMarketCap was quick to respond to the remark. According to Cointelegraph journalists, the new contract addresses actually belong to bridges – special services that allow tokens to be transferred to other blockchains by issuing so-called wrapped versions of them, that is, similar versions of the token on another network.
And yet, the official Shiba Inu Twitter account still posts a warning that users are strongly encouraged to transfer tokens specifically in the Ethereum network, i.e. in the ERC-20 standard.
Warning from the Shiba Inu team
Incidentally, the SHIB token itself, inspired by the famous Dogecoin meme (DOGE), was one of the best investments of 2021 due to its rapid growth. DOGE, on the other hand, made investors happy just recently: on Friday, the altcoin price rose by almost 25 percent in a matter of hours thanks to an announcement by billionaire Ilon Musk. At the time, he announced that Tesla’s merch will be sold for DOGE.
Dogecoin exchange rate in the last two weeks
The page with the option to pay in DOGE on the Tesla website looks like this.
The option to pay in DOGE on the Tesla website
It’s quite ironic, as it was Elon’s Twitter activity that was the main reason Dogecoin was so popular and rising to its peak in 2021. He started posting posts mentioning the coin, which caused it to attract a huge amount of investor interest. Musk also promoted Bitcoin by adding it to the list of available payment methods for Tesla electric cars. However, that didn’t last long: BTC payments soon stopped being accepted due to Ilon’s concerns about the negative impact of Bitcoin mining on the environment.
We believe that such platforms should only contain genuine cryptocurrency smart contract addresses that allow purchasing coins on their respective networks. Otherwise, users could get into trouble - and that would affect their future trust in such sites. Hopefully, CoinMarketCap will come to their senses and rectify the situation.
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