Honeypot scams are very common in crypto trading. It usually happens when a token can't be sold after buying it. Hopefully, there are many websites you can use to scan through tokens and spot malicious code lines in their contracts.
But, scammers can be very clever and use different techniques to make their tokens look more legit. As I mentioned above, websites like Token Sniffer Go Plus Labs can be used to scan token contracts and spot honeypot risk or malicious risks. But sometimes, even these sites fail to see major issues with token contracts. As a trader, you really need to dig deeper in your research.
This scam I came across completely fooled me and blew my mind, so I had to make a blog post to warn others. I did the routine scan on Go Plus Labs but failed to see any major risk to the token contract, so I bought some tokens but only realized I couldn't sell them later.
What really fooled me into buying some $CETUS tokens, which is the scam token was when I saw who else was holding it. I noticed the third biggest holder is a wallet called BINANCE Hot Wallet holding 3.31% of the 1 Billion total supply, and GATE Io is holding 1.60% of the supply. Interesting right?
These wallets seem to be legit wallets from Binance and Gate Io. You can check them yourself here on DeBank. Binance and Gate Io are 2 big credible crypto exchanges, so having them here can convince anyone of the legitimacy of this token contract.
an anonymous wallet is the biggest holder with 75% of the total supply. After further investigation of this wallet on Debank, I figured it's also the LP holder on Sushiswap. A little sketchy, but this alone can't determine if it's really a scam or not. The $2,779,354 million net worth also impressed me to believe maybe it could be a raised funds or something like that.
Unmasking the dark plan
I finally determined this is indeed a scam and the scammer probably sent some of his shitcoins to Binance and Gate Io in order to fool investors. This technique is pretty common with meme coins as they send tokens to Vitalik Wallet and use it as a promotion. Here, we can see the target moved to credible crypto exchanges.
why crypto exchanges though?
From further research, I found a legit project called that was launching their token $CETUS on major exchanges on May 10. This fake $CETUS was launched on Sushiwap on May 8. The scammer clearly used the buzz surrounding the launch of the real token to release theirs earlier to confuse investors.
I found this fake token on Dexscreener. The scammer probably knows many crypto investors like to search for tokens that are not been listed on CoinmarketCap or Coingecko, in the hope of being early. The fear of missing out led me to buy it before researching it.
My suspicion was finally confirmed
My suspicion was confirmed only a few hours later. The top holder was indeed the scammer's wallet. As you see, their wallet drained the LP and sold more than 800 Trillion $CETUS for 247,952 Dollars.
As you can see, the price chart was looking good before the dump. You can see in the below picture, that the top holding wallet has now 333,332,464,877,879,735,313.860580108594325721 tokens!?? This clearly means the contract minted additional tokens. Also, notice the LP has now 868,456,231,379,639 tokens.
The takeaway here is to make you vigilant about fake tokens mimicking legit tokens about to be released. As it turns out, these scammers send their tokens to major exchanges to fool investors. So be very careful and only get your information from official links from any project you are interested in. And don't always rely completely on these token scanner websites' results. Do further research to help you with investment decisions.
Stay safe!
