Never heard of Honeypot Crypto Scam? Here’s what it means

  en.cryptonomist.ch 6 h

The Honeypot Crypto Scam is a technique or scheme that uses a cryptocurrency wallet, a token, or a smart contract to attract its victims. Unaware users, in fact, voluntarily decide to invest, transfer, or exchange their tokens, ending up being robbed.

Summary

• Honeypot Crypto Scam: the scheme that uses smart contract, token, or wallet to scam its victims
• Honeypot Crypto Scam: how does it work and how is it structured?
• How to stay away from scams in the world of cryptocurrencies

Honeypot Crypto Scam: the scheme that uses smart contract, token, or wallet to scam its victims

The Honeypot Crypto Scam is a scam scheme used to lure new victims, with the prospect of stealing their funds.

Specifically, in this type of scam, the bad actor uses a cryptocurrency wallet, a token, or a smart contract to lure unsuspecting users and induce them to invest, transfer, or exchange tokens and criptovalute.

Basically, what characterizes the Honeypot Crypto Scam is a promise of substantial gains to unsuspecting victims, who voluntarily transfer their funds to the scammer’s crypto wallet.

Only at a later time will users realize that it is indeed a scam, and that they have therefore lost their tokens and cryptocurrencies.

There is also the possibility that this kind of scam could happen even when the scammers pose as novice users looking for help.

But let’s get more specific, here are the crucial points to identify when you are encountering a Honeypot Crypto Scam.

Honeypot Crypto Scam: how does it work and how is it structured?

Generally, the Honeypot Crypto Scam unfolds in three distinct phases. The first phase sees the scammer deploying their smart contract which appears to have a design flaw and allows any user to extract the contract’s tokens.

Here we are in the “honeypot” phase, which is that moment when the instinctive greed of users is exploited, given that at its core there is the promise of substantial future gains. In reality, the malicious smart contract will require the victim user to send it a certain amount of cryptocurrency first.

Here is the second phase, which is when the unaware users send the requested deposit in crypto, and attempt to exploit the vulnerability to cash out. Right here, a second vulnerability will intervene that prevents the victims from withdrawing the initial deposit and the contract’s reserve.

Finally, the third phase involves the scammer cashing in the funds from the malicious smart contract, including the deposit of all the victims of the Honeypot Crypto Scam.

As anticipated, this kind of scam can also happen when scammers pose as novice users seeking help. Here, the bad actor will first contact users on social media, pretending to be an inexperienced user who needs help to cash out or transfer their fake large crypto funds.

To be more convincing, the scammer might share their private keys with the unsuspecting victim and promise them a portion of their tokens in exchange for their help.

With this premise, in order to proceed, the victim will be forced to deposit the native token of the blockchain on which the wallet operates to withdraw the tokens.

And it is precisely here that the funds will go into the hands of the scammer, as they are immediately redirected to another wallet, using automatic scripts once reached.

How to stay away from scams in the world of cryptocurrencies

Being a crypto user today requires the knowledge and implementation of some fundamental behaviors to stay safe from continuous crypto scams or cryptocurrency frauds.

In fact, in addition to the Honeypot technique, there are many others that continue to increase in number and become increasingly specialized to scam users in this magical sector.

In this regard, in this jungle, every crypto user should consider following a series of valid rules for their safety.

For example, first and foremost, it is necessary to safeguard your wallet where your crypto are stored.

In this case, it is always better to rely on hardware crypto wallets like Ledger, or decentralized crypto wallets where the user owns the private keys and not the online platform.

Another behavior is to stay updated on the various scam techniques in the sector. There are various reports that reveal the current trends and the characteristics of each crypto scam.

Besides Honeypot, in fact, there are the techniques of phishing and approval phishing, but also of “access control”, “rug pull”, “oracle issue”, and many others.

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