PayPal Stablecoin Scammers Are Ripping Off Investors Left And Right – Here’s How
By Benzinga
Fraudsters are exploiting the recent introduction of PayPal's (NASDAQ:PYPL) dollar-backed stablecoin.
More than 66 imitation tokens had emerged on platforms including Ethereum (CRYPTO: ETH), BNB Chain (CRYPTO: BNB), and Base (CRYPTO: BASE), Coindesk reported citing DEXTools data.
Ethereum, the platform where the authentic PayPal USD (CRYPTO: PYUSD) resides, has seen the highest number of these counterfeit tokens.
What Happened: New York-based PayPal recently announced plans to roll out its stablecoin to enable users to shift PYUSD between PayPal and compatible external digital wallets. They can utilize the tokens for transactions, or exchange any of PayPal's endorsed cryptocurrencies to and from PYUSD.
However, even before the official tokens have been released, deceitful individuals are already setting traps for the unwary.
Their strategy involves launching a token labeled "PYUSD," infusing it with liquidity using ether or a different token and then presenting it to users on a decentralized exchange platform.
See Also: Singapore's MAS To Boost Fintech With New Investment Commitment: Will It Pay Off?
Why It Matters: The ease with which anyone can initiate a smart contract and release tokens on platforms like Ethereum for mere pennies, combined with the instant trading capabilities of decentralized exchanges, facilitates this scam.
Often, the bulk of these fake tokens are acquired by their creators post-launch, creating a facade of a popular token, which in essence is bait for unsuspecting users.
Such deceptive practices can generate thousands of dollars within hours for these fraudsters, making it a lucrative and unscrupulous endeavor.
Furthermore, some of these deceitful developers might withdraw all liquidity from these counterfeit tokens shortly after their release.
This action would plummet the token prices by 100%, leaving investors with worthless digital remnants.
Now Read: Bitcoin Widow Wins $270,000 Settlement After Bank Blocks Deposit
Join Benzinga's Future of Digital Assets in NYC on Nov. 14, 2023 to stay updated on trends like AI, regulations, SEC actions & institutional adoption in the crypto space. Secure early bird discounted tickets now!
