Scammers have reportedly discovered a new way to steal Solana users’ cryptocurrency, this time by burning the tokens in their wallets.
According to Slorg, a member of Jupiter’s core working group based in Solana, scammers began using Solana’s built-in token scaling feature to surreptitiously delete their targets’ cryptocurrency holdings.
“Imagine you swap tokens and your wallet statement confirms that you received them, but when you look inside, you see nothing,” Slorg said in a Sept. 3 post to X.
source: Slog
“As time goes by and there are no tokens, you have to dig around and contact someone who knows what’s going on. This was the reality for Jupiter Community Members 4 days ago,” he added.
Abuser of standing delegates
In this user’s case, it was discovered that the exchange was for a token called “RED” with the “Permanent Delegator” extension. This allowed the scammer to burn all tokens in the transaction just 7 seconds after the transaction was completed.
“Permanent Delegate is an extension to Solana’s Token 2022 standard,” PeckShield explained to Cointelegraph.
Solana’s official website describes the Perpetual Delegator extension as “a feature that grants unlimited delegation rights to all token accounts for that mint, allowing them to burn or transfer tokens without restrictions.”
It is designed for appropriate use cases such as retrieving accidentally transferred tokens for revocable access tokens or sanctions compliance. It can also be used for automated payments and refunds.
But even Solana pointed out that this is a “double-edged sword” and can be abused.
Why burn the victim’s tokens?
In an interview with Cointelegraph, Slog said there could be a number of reasons why a scammer might want to burn tokens.
“The first reason is to create generalized chaos,” Slog said. “Sometimes scammers want to see destruction and chaos. It’s like a mix of prank and ‘fuck you.’”
The second reason is to reduce float, Slog said.
“If no one can sell, the price won’t drop. Scammers often steal most of the initial supply, and the problem is that they don’t need $50+ in profit to make it worthwhile.”
“I discovered a solo scammer who was doing a series of token launches before pump.fun in November of last year, and he was only making $50-$100 each time, but he was making thousands of dollars a week by splitting the $50 a day,” Slorg said, adding:
“It’s probably not a very effective strategy, but they’re definitely experimenting.”
Blockchain security service providers Beosin and Peckshield also shared a similar theory in comments to Cointelegraph.
source: Tamara Gligorova
PeckShield speculates that scammers are trying to influence the token economics of cryptocurrencies, “basically by manipulating the circulating supply of the relevant token.”
Meanwhile, Beosin believes that a scammer could use the feature to destroy a user’s tokens, tricking them into thinking that the supply of tokens they created would remain the same.
“For example, burning other people’s tokens to increase the token price and earn profits from some DeFi protocol related to the token.”
relevant: Solana Memecoin has a massive market cap of $328 trillion, all for the wrong reasons.
Slorg noted that Jupiter and RugCheck are two entities that created indicators to indicate when this extension is enabled.
“Nevertheless, it is important to do your due diligence on every token. Have a routine that you don’t deviate from, and take the time to read all the text when you swap.”
“Otherwise, it could cost you money at some point, especially as new token features are developed.”
According to Slog, people have reported falling victim to similar scams recently.
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