“The ‘Liquidity Mining Scam’ can be said to be a very common scam in the cryptocurrency field, but new investors continue to fall victim to it. Recently, the ‘BNB/ETH Swap Arbitrage Scam’ has resurfaced, and victims have realized it too late, unable to retrieve their transferred cryptocurrency assets.
(Prior summary: FBI warns about DeFi liquidity mining scams, urges the public to stay away from Liquidity Mining scams)
(Background information: Beware! MetaMask is filled with fake airdrop phishing, community outraged: Musk allows scams to rampage)
Table of Contents:
Newcomers in the cryptocurrency circle fall victim to the BNB/ETH Swap Arbitrage Scam
What is a Liquidity Mining Scam?
How to avoid being scammed?
While decentralized finance (DeFi) brings more possibilities to the blockchain, it has also been maliciously exploited by many criminals. Many scams disguised as DeFi have emerged, among which the ‘Liquidity Mining Scam’ is more typical.
Just yesterday, a Twitter user named ‘yingbnb’ posted a victim’s experience of being scammed on the X platform. The victim ultimately transferred several ETH to the scammer but did not receive the promised return of BNB. Moreover, the victim’s transferred cryptocurrency assets cannot be retrieved anymore.
Newcomers in the cryptocurrency circle fall victim to the BNB/ETH Swap Arbitrage Scam
Based on the chat records between the victim and the scammer posted by ‘yingbnb,’ it is not difficult to see that this is a ‘BNB/ETH Swap Arbitrage Scam’ that had appeared long ago.
The sequence of events is roughly as follows: on the social media platform Telegram, a scammer named ‘Binance Qi Qi’ impersonated an official from the Binance exchange and informed the victim, ‘Prince Mi Di – Mainland,’ that they could transfer their ETH from their wallet to a so-called ‘contract mining pool’ for liquidity mining. They would then receive a high return rate in BNB.
However, the so-called ‘contract address’ provided by the scammer was actually the address of their own wallet, causing all the ETH transferred by the victim to fall into the scammer’s pockets.
However, the story does not end there. On one hand, the scammer is unable to fulfill their promise of returning BNB. On the other hand, in order to scam more funds, the scammer continues to make the victim transfer more by claiming that there were ‘transfer information errors,’ ‘improper transfer operations,’ ‘wallet risk control,’ and other reasons, in order to resolve the so-called ‘risk control’ and unlock ‘all profits.’
In the end, until the victim’s funds are completely depleted or they realize they may have been scammed, the scammer stops responding to messages or even directly blocks and deletes the victim.
What is a Liquidity Mining Scam?
We know that liquidity mining is a product of DeFi. In the crypto world, liquidity is crucial for cryptocurrencies, and many projects allow users to inject their own cryptocurrency assets into liquidity mining pools to obtain or enhance token liquidity. Within certain rules and timeframes, users can receive corresponding returns, and their assets can be fully withdrawn.
Therefore, a liquidity mining scam is a phishing scam disguised as liquidity mining. It often exhibits the following characteristics:
Strangers who impersonate official staff often proactively contact victims on various social media platforms and provide investment advice. Eventually, they invite victims to participate in so-called liquidity mining activities.
Scammers often attract victims to unofficial platforms with exaggerated returns.
These platforms have forged investment data interfaces that often display high profits.
Initially, scammers may actually return profits to the victims, but this is done to lure victims into transferring larger amounts of assets until a certain amount is obtained, after which the scammers will no longer return anything.
How to avoid being scammed?
In reality, whether it is a token contract address or a DeFi contract address, they can be found on the blockchain. Therefore, when someone proposes to transfer to a certain address, one can first check if the address has a correct corresponding entity.
The authenticity of phishing websites or forged unofficial platforms can also be checked.
The identity of certain official staff can be found on relevant websites. For example, Binance has established an official verification channel where the authenticity can be verified.
Finally, Doo-Woo also reminds investors that while you may be attracted to high interest returns, scammers are targeting your principal. Therefore, when faced with transfer requests from others, remember to think twice before taking action.”