Chinese state-run TV network draws attention to DeFi scams on Uniswap
CCTV-13, a TV channel that is part of the state-controlled China Central Television (CCTV) network, aired a new report today, highlighting how easy malicious actors can create fraudulent tokens and sell them on decentralized finance (DeFi) platforms such as Uniswap.
“CCTV, China’s largest official TV station, began to pay attention to Uniswap and asked the security company to demonstrate how to issue coins on Uniswap and rug pull,” pointed out China-focused crypto journalist Colin Wu.
CCTV, China’s largest official TV station, began to pay attention to Uniswap and asked the security company to demonstrate how to issue coins on Uniswap and rug pull. pic.twitter.com/9lnX2PAU7I
— Wu Blockchain (@WuBlockchain) June 2, 2021
In the report, CCTV-13 explained that literally, anyone can create their own tokens—including those mimicking other projects—in the DeFi ecosystem. As an example, the reporter pointed to TRTC, a “fake token” that surfaced last November.
Soon after TRTC launched and its trading began, users discovered that they can’t actually sell their tokens after purchasing them. This is because TRTC’s smart contract mandated that only its creator can authorize the tokens’ sales.
Ultimately, TRTC developers managed to defraud around 59 Ethereum (roughly $165,000 at current prices) from their unsuspecting victims.
Beware of rug pulls
Such frauds, known as “rug pulls,” usually end up in fake token developers running away with traders’ money after emptying decentralized liquidity pools, CCTV-13 noted. To exemplify, an engineer from blockchain security firm SlowMist demonstrated how transactions are organized on Uniswap.
Interestingly, according to “China Firewall Test,” a website that allows users to check if a page is blocked by the “Great Firewall of China,” Uniswap and all its subdomains are apparently inaccessible from within the country. Thus, it is not entirely clear why CCTV-13 reporters and experts decided to use Uniswap as an example.
“At present, the supervision of Bitcoin mining and trading activities is constantly escalating,” CCTV-13 concluded.
As CryptoSlate reported, following the Bitcoin mining debacle that originated from China last week, the country’s state-run media published several articles and reports that outlined various risks associated with cryptocurrencies. For example, Xinhua News Agency highlighted the danger of overleveraged Bitcoin trading on Saturday.
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