Stablecoin scams are gaining popularity in the crypto industry. How does it work?
Fraudsters have launched a massive phishing attack targeting potential USDC stablcoin holders. This was reported by Circle, the official Twitter account of the issuing company. Its representatives note that the attackers pose as employees of Centre, a consortium founded by Circle and US cryptocurrency exchange Coinbase. They then try to get the victim to interact with a potentially malicious crypto-address for USDC. We tell you more about the scammers’ actions and how to counter them.
Note that Stablecoin users had a new cause for panic the day before. Over the weekend, crypto-twitter users noticed that the Nexo trading platform was offering around 10 per cent per annum for USDT-type deposits in steibles. That’s a big figure, well ahead of the annual returns at many banks.
Maximum yield on stabelcoin deposits on the Nexo platform
This has raised the question among users as to why such yields are generated. After all, as the famous saying goes, “if you don’t know where the returns are coming from, then you are the source”.
Equally doubting the validity of what is happening is the comparison with the corresponding returns in decentralised protocols such as Compound and Aave. There, users get about 1 percent per annum in stabelcoins. Well, notional short-term US Treasury bonds yield 4.5 percent.
A comparison of the yields of stabelcoin deposits on different platforms
So where the money comes from here is unknown. However, given the collapse of various cryptocurrency platforms this year, such information is a cause for concern.
How cryptocurrencies get scammed
Here’s a translation of a post from Circle’s Twitter account, where company representatives share what’s going on
WARNING: An active phishing campaign has been deployed online to entice users to transfer USDC tokens to malicious addresses. The scammers pretend to be representatives of Centre. There is no new version of USDC on the market. Please do not fall for this.
In other words, scammers are trying to get potential victims to interact with a smart contract that will supposedly update the version of stabelcoins in users' possession. Apparently, the transaction conducted will add permission to transfer the crypto-assets, which will end up sending them to the scammers' wallets.
The only correct strategy here is to ignore any such transaction offers and keep an eye out for news only on official resources. Specifically here it is precisely the Stablecoin issuing company's Twitter account.
Cryptocurrency hacker
According to CryptoPotato’s sources, Circle CEO Jeremy Allaire had recently approached representatives of the Financial Services Committee of the US House of Representatives. He is pushing for the introduction of a clear system of regulation of stablcoins in America, which could allow for a significant increase in the fight against fraud and protect investors. In addition, the blockchain industry itself will have clear rules and additional motivation to develop its own platforms, because then they will not be afraid of uncertainty and potential problems.
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Following the events of early November, many in the crypto industry associate the term ‘rogue’ with Sam Bankman-Fried, founder of the bankrupt FTX exchange. Sam is currently involved in a lawsuit to restructure his platform’s debts, with news coming out the day before that Bankman-Fried’s assets in Turkey have been frozen.
Turkey’s Ministry of Treasury and Finance has issued an announcement that funds linked to Bankman-Fried and his inner circle have been frozen. The statement also said that an investigation has been launched into allegations of fraud against the former FTX CEO, Decrypt reported. Meanwhile, an investigation was launched the week before last into the collapse of the exchange, which also operated a local subsidiary called FTX Turkey.
FTX crypto exchange logo
The ministry is also probing individuals and companies linked to the exchange. Both investigations, launched under the country’s anti-money laundering legislation, are led by the Financial Crimes Investigation Council of Turkey (MASAK), a division of the Ministry of Treasury and Finance.
We believe that keeping your own cryptocurrencies safe is not as difficult as it seems. First, it is advisable to store most digital assets using hardware wallets that do not shine the private keys of blockchain addresses on the Internet. Second, it is important to be able to ignore any requests from strangers for transactions. In addition, it is important to understand how blockchain works - in this case, it will allow you to assess your own potential actions and assess the risks of doing so.
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