Title: Beware of Rug Pulls in the Bull Market
Author: shushu, BlockBeats
In addition to being cautious of market manipulation, investors should also be wary of rug pulls.
This morning, the 404 ERROR project, which was ranked sixth on the hot list, experienced a drastic price drop after reaching a peak of $13,629. At the time of writing, the price has plummeted tenfold to below $1,350.
ERROR is an ERC-404 token deployed by Serpent. On March 1st, Serpent announced the deployment details of ERROR on social media, stating that there were only 404 tokens in total. Today, Serpent tweeted that ERROR had gone live. However, just two hours after its launch, it was exposed by investigators on the blockchain as a scam.
The official Twitter account of ERROR has been shut down. Let’s take a look at how the investigators uncovered this scam.
At 7:59 am, half an hour after ERROR went live, Twitter user ManaMoon (@ManaMoonNFT) tweeted that the fake contract of ERROR had already been verified and deployed with unique functions hours before the “real” contract.
Following that, investigator ZachXBT tweeted at 8:47 am, stating that the deployer of ERROR injected $1.3 million into Ethereum through a stake, which was previously obtained from the rug pull of the FCKIT meme coin presale initiated by Eskyy.
From the funding chain shown in the image, it can be seen that the FCKIT meme coin deployment address transferred 200 ETH to an address starting with 0xccb9, and the money ultimately flowed to the ERROR deployment address. FCKIT went live at the end of May 2023, but the project founder’s Twitter account has been deactivated, and the coin cannot be found.
Interestingly, the deployer of ERROR, Serpent, was previously the founder of a security company. Previously, Serpent was known as the founder of Discord and the encryption threat mitigation system Sentinel, as well as a co-founder of DAPE. They used to expose hacker attacks and warn of scams on social media.
On February 25th, Serpent posted a pre-launch tweet for ERROR, requesting followers to turn on tweet notifications. In another tweet, Serpent retweeted a fraud case they exposed in 2022, titled “Analyzing how scammers stole 14 BAYC over a month-long social engineering scam, worth over 852 ETH.” It must be said that Serpent understands social engineering.
During Serpent’s operation of Sentinel, they were also involved in a deception controversy. When a user questioned how to communicate with real hackers, Serpent promoted their security product. Currently, the Sentinel Twitter account has been deactivated.
Although we cannot determine through Twitter whether Serpent is the same person as Eskyy, who deployed FCKIT, it is interesting to note that Serpent also posted a tweet in the style of “Leave your wallet address, you will thank me” before FCKIT went live.
With the bull market upon us, it is important to be cautious and discerning when participating in new projects. Going all-in is not wise; investing in secure projects is the true wisdom.
This article is authorized and reprinted from BlockBeats.
