On January 13, 2022, PeckShield Inc reported detecting over 50 questionable tokens on Binance Smart Chain. This announcement will certainly have an impact on the reputation of this platform, which is nevertheless one of the best cryptocurrency exchange sites. In addition, the news comes in a context where cryptos are increasingly popular with investors. By reading this article, you will discover all the consequences of this announcement on the platform and its users.
Over 50 tokens with all-in potential on Binance Smart Chain
The discovery of dubious tokens on Binance SmartChain (BSC) was made by PeckShield Inc. The revelation of this discovery by the company specializing in securing blockchains was made after analyzing various contracts on Binance Smart Chain.
Indeed, these investigations carried out by PeckShield Inc have made it possible to detect more than fifty questionable tokens on the platform. After discovering this, PeckShield indicated the risk that the developers of these fraudulent cryptos would end the project and disappear with the investors’ money. In this case, we will then speak of “rugpull”.
According to PeckShield, the intentions of the developers of these tokens are questionable. Binance Smart Chain has every reason to be very careful. Otherwise how to explain the fact that an investor is able to buy a crypto that he cannot resell?
The approach of these developers is known. It is very often used by scammers on the internet. These often wait for the tokens to reach a certain level before taking action. As soon as this level is reached, the latter abandon the project leaving investors with worthless cryptos.
This situation has happened several times in the past. The procedure is the same. You witness the flight of a token and the next day its value is reduced to zero. And as soon as you get scammed, your tokens will no longer be able to serve the market. Concretely, the project owners let you invest up to a certain amount.
Once the requested amount is collected, they withdraw from the project and the value of the token plunges to zero. This way of scamming investors is known as the “honeypot”.
It is to prevent such a situation from occurring that PeckShield alerted Binance Smart Chain on January 13th. This should obviously allow the Blockchain to take the appropriate measures to avoid a rugpull.
The rise and notoriety of Binance Smart Chain
When you’re a leader in your industry, there are some mistakes you need to avoid at all costs. In the world of cryptocurrency, Binance is known as the go-to platform for transacting digital assets. With more than 300 cryptos available, the platform continues to attract investors.
The announcement of the 50 potentially dubious crypto projects comes at a time when Binance Smart Chain is rolling out to gain more exposure. Indeed, the company is one of the partners of the CAN (African Cup of Nations) of football. This event, which is followed all over the world, began on January 9 and is expected to end in early February.
It is therefore four days after the start of this competition that PeckShield Inc will make this announcement. No doubt the reputation of the platform will take a hit.
However, Binance has already experienced several sabotage attempts in the past and several of them ended in failure. Others, on the other hand, have succeeded in tarnishing his notoriety. This is the case of the 7,000 BTC recently hijacked by cybercriminals.
This incident had already had an impact on the site’s reputation, despite the exchange’s coverage of user losses. These multiple attempts had led the site to place more emphasis on its security. For example, you now have to go through the Know Your Customer (KYC) process to deposit and withdraw with fiat currencies.
2021 a monumental year for cryptos, what about 2022?
Cryptocurrencies offer several possibilities to their users. Thanks to them, you have the facilities to make payments. The services offered by active cryptos allow you to carry out large financial transactions without, however, having to resort to financial institutions.
This innovative approach has attracted many investors. The proof, 2,000 billion dollars of crypto assets were in circulation in September 2021, 10 times more than that recorded in January 2020.
The performances for 2021 are the result of the multiple changes observed in the sector during the year. We can note:
The proliferation of digital asset exchange sites
Expanding the options available to users
The implementation of strategies around wallets, exchanges and miners.
It should also be noted that in 2021, cryptos were looking more to stabilize by pegging to the dollar. This quest for stability has been beneficial since their volume has reached 120 billion dollars.
The trend seen in 2021 has not declined in 2022. The $3 trillion threshold has already been reached. This confirms the place occupied by cryptocurrency in the financial sector. In simple terms, it would have become unavoidable. However, despite the presence of several cryptocurrencies in the market, only two of them have taken the lion’s share.
Bitcoin and Ethereum alone account for 60% of market share. Or 42% for Bitcoin and 18% for Ethereum. The propensity that cryptocurrencies are taking worries many banks. Today, several of them have started investing in active cryptos.
What are the risks for users?
When a rugpull performs on an internationally renowned platform, she is the first loser. As we saw above, this is not the first time that Binance has been cited in a cybercrime case. But Binance is aware of its place in the market.
It will therefore be difficult for the platform to agree to make its users unhappy. This suggests that in case of rugpull the site will use all possible remedies to restore its users to their rights. But nothing is ever certain. If the last time the investors were reimbursed, there is no guarantee that in the event of a rugpull, the users will also be compensated.
In other words, if you invest in one of these dubious crypto projects and the drama occurs, you can also lose big.
Of the 50 potentially dubious crypto projects detected by PeckShield, you have for example BabySquid, AstroCoin, bnbRocket tokens. You especially have the TRUMP token. PeckShield is particularly interested in this token since 271 investors are holders.
The other tokens are not of much interest to PeckShield since they are worthless. Users have not invested in it. On the other hand, the TRUMP token was traded at nearly $145 in the seven days leading up to the announcement.
Thanks to the nature of its offers and the multiple options offered to users, Binance Smart Chain has managed to occupy a prominent place in the sphere of exchanges. But the announcement of the discovery of more than 50 potentially dubious crypto projects on this platform risks tarnishing its reputation. PeckShield, which has detected these potential fraudulent projects, warns against the risks of rugpull. If this were to happen, users could then see their investments reduced to zero.
Erica Masson
Passionate about stock market trading and crypto-currencies, I work on writing articles on the subject in order to share my experience and inform at the same time. Because I am convinced that crypto-currencies open up perspectives that everyone should experience.
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