The cryptocurrency ecosystem is once again confronting the harsh realities of exit scams, with the most recent case involving a token known as Lucky Star Currency ($LSC) on the Binance Smart Chain. Security firms AegisWeb3 and PeckShield have reported a sharp decline in the token’s value, plummeting by 97% to 98%, resulting in an estimated loss of $1.11 million.
Raising an alarm regarding the event, the AegisWeb3 team wrote on X:
🚨SECURITY ALERT – $1.11M Exit Scam🚨
— AegisWeb3 (@AegisWeb3) October 9, 2023
AegisWeb3 has detected the emergence of an exit scam on #BSC.
The token $LSC (https://t.co/2ANV5ksVjE) has dropped 97%. pic.twitter.com/wj39B7ztLd
AegisWeb3 traced the funds to a specific wallet address that offloaded tokens for a profit of around $1.11 million in BUSD. The funds were then transferred to another address. Further scrutiny revealed that the exiter received 3 million $LSC tokens from two distinct contracts. One of these contracts was identified as the node fee address for $LSC, adding another layer of complexity to the unfolding drama.
This incident is not isolated but part of a larger pattern of fraudulent activities in the crypto space. Earlier this year, a project named Fintoch, which falsely claimed to be affiliated with investment banking giant Morgan Stanley, allegedly absconded with nearly $32 million of investor funds. The Monetary Authority of Singapore had also issued a warning against Fintoch, and it was later revealed that the CEO’s image was that of a paid actor.
Furthermore, as reported last month, Coinbase’s Layer 2 network also faced a significant setback with an audacious exit scam involving Magnate Finance, a prominent lending protocol. The loss is estimated at around $6.5 million, orchestrated via direct manipulation of the price oracle. This incident has intensified concerns about the vulnerabilities in the network’s security architecture.
Adding to the concerns, the U.S. Federal Bureau of Investigation (FBI) issued a warning in May about the proliferation of deceptive crypto job advertisements, often linked to labor trafficking. Moreover, blockchain security firm CertiK disclosed that over $103 million was illicitly drained from various crypto projects and investors in April alone.
