On-chain investigator ZachXBT has identified the same address as the hub of numerous cryptocurrency scams akin to rug pulls. Let’s take a closer look at all of this.
An address is used as a hub in cryptocurrency scams
Ethereum (ETH) blockchain data shows same address served as hub for the receipt of cryptocurrencies recovered in scams similar to rug pulls. It was the on-chain investigator ZachXBT, who has a certain reputation in the ecosystem, who noted these anomalies on Twitter yesterday:
Over the past 1.5 months one person has created 114 meme coin scams.
Each time stolen funds from the scam are sent to the exact same deposit address.
0x739c58807B99Cb274f6FD96B10194202b8EEfB47 pic.twitter.com/uwVAiG9WGG
— ZachXBT (@zachxbt) April 26, 2023
The mode of action is essentially the same each time : the person or persons involved consolidate the funds on the same address, then send everything to a Coinbase address.
As pointed out in the comments to the tweet above, provided the person owning the Coinbase account did not perform a bogus Know Your Customer (KYC) verification, this may aid in the investigation.
These actions started over a month ago and the illustration below of the transactions on one of the addresses involved helps to understand how this takes place:
Example of how one of the rug pulls works
The transactions read from bottom to top in chronological order. First, an address is supplied with ETH and then a smart contract is created for a token that will be used for the scam: the DONUT in this example.
Later, this token will be opened for trading, in particular through the opening of a liquidity pool in which funds will be deposited. Then, the address in question relinquishes ownership of the smart contract, then ends up withdrawing all of its liquidity after several days. to send everything to the address serving as a hub.
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123 fraudulent tokens created
As the majority of transactions on the “hub address” fit into a pattern involving a first transaction delivering the funds from the rugpull, then a second sending the funds to Coinbase, ZachXBT estimated the whole thing at 114 scams.
However, upon closer inspection, we can see that sometimes multiple incoming transactions are made to the implicated address, so as to consolidate the funds from multiple scams before sending them to Coinbase. By counting all incoming transactions, we can therefore estimate these scams at a total of 123 at our level.
For stolen funds, the accounting is much more complicated, for several reasons. The main one being that the person(s) behind it all committed their own fundson the one hand to provide the necessary liquidity for scams and certainly also to create fake trading volumes in order to attract potential victims.
In all, these are more than 318.4 ETH sent to Coinbase, for a value of 605,880 dollars, but for the reasons given, the ill-gotten profit is difficult to estimate. In addition, other addresses could have been used to manipulate the prices of these tokens, as has been pointed out:
I think they make some buys from alt wallets when they deploy which complicates calculating what they profit.
— ZachXBT (@zachxbt) April 26, 2023
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Source: Etherscan
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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