New crypto scam alert: Cybercrime is focusing on a new Solana scam that is rinsing users; here’s what you need to know to stay safe.
Holding crypto is liberating, but it comes with its risks. You are in charge of the private keys, and sometimes, all that’s needed is a careless action, and your wallet is wiped clean.
Billions worth of coins have been stolen since the first cryptocurrency launched. As crypto finds adoption, many more newbies will lose their coins in one way or another.
Bitcoin was the first and, thus far, the most valuable action on smart contract platforms such as Ethereum, Solana, and many more.
Ethereum was the playground for scammers who took advantage of the ICO boom to extort investors of their hard-earned millions.
In 2024, more scams were reported on low-fee and scalable alternatives, mainly Solana.
As it turns out, scammers are always a step ahead, looking for even more malicious ways of stealing from DeFi users and token holders.
The New Scam On Solana
This week, a new scam expressly targeting Solana users was reported.
It turns out that scammers are now exploiting a feature inherent in Solana, which is to burn tokens directly from users’ wallets without their knowledge.
Experts say these scammers are exploiting the “Permanent Delegate” feature on Solana to do this.
Usually, the “Permanent Delegate” feature is used to sanction a wallet. However, in the hands of the wrong user, it can prove disastrous for legitimate wallet holders.
Unpacking The New Crypto Scam: How It Happens
Those who fall victim to this scam often find themselves confused after swapping their tokens for another, only to find that they have no tokens in their wallets.
Initially, they may assume the transaction didn’t go through (and this is expected in Solana, considering the high transaction failure rate, especially in DEXes like Raydium).
They can choose to be even more patient, assuming it is the “usual” network delay.
The reality is that victims don’t realize that their tokens have been illegally burned through a malicious transaction enabled by the Permanent Delegate extension.
Through this feature, scammers take over the addresses and the token supply before burning them at will.
Using this tactic, the scammer cheats the wallet user by manipulating the token supply for their selfish gain.
Protecting Against The New Crypto Scam: How To Stay Safe
Several protocols and Solana developers are aware of this scam.
They are urging token holders to stay safe.
To do this, wallet holders should:
- Always conduct due diligence before engaging with any token. The best thing to do is to be careful and wary of overly promotional offers.
- Verse themselves with token extensions like Permanent Delegate. Knowing what different extensions can do can be a good way of shielding themselves from scammers.
- Check all token details before swapping. To stay safe, probe all details, including contract addresses and, if any, the associated extension.
- Always use a reputable and safe platform on Solana. Aware of this scam, portals like Jupiter have implemented safeguards to protect clients.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
