Fake Airdrops: There is No Free Lunch
When using crypto products such as wallets and exchanges, protecting your assets is the No.1 priority. In “CoinEx Wallet Security Tips”, we will share some basic crypto know-how such as common scams, how to use crypto products safely, and blockchain security mechanisms from multiple perspectives to help you fully understand asset security and adopt enhanced protection measures.
They say that a day’s profit in the crypto world is equivalent to a year’s salary. In the crypto space, people are always fascinated by get-rich-quick stories. There are people who made millions by shorting a token; someone earned three years’ salary through GameFi in a few days, and someone else made a huge profit via airdrops. These “legends” have attracted plenty of people who believe in “free lunches”.
Yet, the potential for high returns usually comes with high risks. Plus, the unestablished industry standards and crypto regulations have provided scammers with a great opportunity to set up scams by tapping into the information gap and the blind pursuit of profits. In the crypto industry, the “free lunch” sometimes could be a trap. Airdrops, a common form of crypto reward for users who have contributed to the project, are often abused by scammers. Fake airdrops which are scams in disguise usually include:
1. Airgrab scams
When making a crypto transfer, we can notice that the transfer of some cryptos consumes a certain amount of blockchain resources. Therefore, project teams often have to bear a cost when conducting airdrops, which, sometimes, could be very high. Here, Airgrab comes in as a great solution that reduces the burden on project teams and allow them to focus on R&D. Simply put, Airgrab is a solution that asks users to pay for a part of the cost of blockchain resources themselves when claiming the airdrop tokens.
To trick users into giving them transfer authorizations, scammers would use “free airdrops” as the bait and send well-made hype posters to users in crypto communities. For instance, they might say that someone just made millions on Uniswap. Since such fake airdrops are free and require no operations, many users would sign up, hoping they could get something for nothing.
What such users don’t know is that they are stepping into a trap. Once they open the website provided by the scammer, scan the QR code, give authorization, log in, and try to claim the airdrop through Airgrab, the scammer would have access to their funds, and while users are excited about the airdrop tokens they’d get, their crypto wallets would have long been emptied by the scammer.
2. Memo scams
When depositing to our crypto exchange account, we are often asked to fill out the memo tag. As a string of numbers that ensures the uniqueness of the deposit address, memo comes in pair with the deposit address and corresponds with it digit by digit. To control costs and manage accounts, some crypto exchanges do not assign an independent recipient address to each user. Therefore, to distinguish users, they assign different memo tags based on the recipient address. When users make a deposit, in addition to the recipient address, they must also fill in the memo tag.
To put it simply, a memo tag is like a remark, and users can enter specific information in the memo tag when transferring cryptos. In a memo scam, the scammer puts false information in the memo tag to trick users into conducting certain operations.
The scammer would first airdrop tons of shitcoins to users. Upon noticing the airdropped tokens, users would see the scammer memo, which often encourages users to convert the airdropped tokens into other valuable tokens (e.g. ETH).
When users click on the link in the memo, they would receive an authorization request, which would grant the scammer access to their funds. Once the authorization is given, the scammer would be able to empty the victim’s wallet.
3. Deposit cryptos & get new tokens for free
In the crypto industry, some project teams would give away free tokens for more community support or market recognition. For instance, users holding BTC or ETH sometimes get free tokens from new forks. Such cheap promotions help project teams build a large following and attract more attention. Some scammers often take advantage of users’ desire to get free tokens.
Tapping into people’s greed, scammers would trick users into downloading fake wallets (such as a fake CoinEx Wallet). They would then conduct hype promotions in the community, telling users that they would airdrop massive cryptos and the way to claim them is to deposit cryptos like BTC and ETH in the fake wallet.
Scammers would also say that amount of cryptos distributed to users is determined by the size of their deposit. The more cryptos a user deposits, the more tokens he would get. To tempt users to make a deposit as soon as possible, scammers would also claim that the earlier a deposit is made, the more tokens the user will get. They’d also say that the airdrop comes with a fixed reward pool, which will be distributed pro-rata according to the size of the deposit.
Once transferred to a fake wallet APP, the BTC and ETH would be stolen by scammers.
Note: Please go to our official website (https://wallet.coinex.com/) to download CoinEx Wallet.
4. Make a small transfer & claim airdrop tokens
Right now, it is still easy to issue tokens on a public chain. As such, some scammers would issue worthless shitcoins on a public chain like ETH and set a high total supply (e.g. 10 billion).
They would then say with confidence that these tokens will become extremely valuable using examples like SHIB. The scammers would suggest that it is an early airdrop campaign, and users could get 10 million new tokens by making a 0.001 ETH transfer to their “contract wallet”. They would promise that users will get 1/1000 of the total tokens and become a big holder who will enjoy VIP privileges.
SHIB features a large total supply and did record rapid growth. As such, many users believe that the tokens issued by scammers would also go up in value and might even become the second SHIB. Obsessed with huge profits and tempted by the small transfer amount, they would easily go through with the process and eventually become a victim.
5. Private key scams
In a private key scam, scammers would first build a fake website based on a trending project and copy all the content from the real website. They would then carry out promotions in crypto communities and say that their project will soon host airdrops (e.g. hold 1 ETH & get 100 project tokens for free). Next, the scammers would guide users to open the fake website to claim the airdrop tokens. On this website, users would be asked to enter their ETH address so that the “project team” could verify their balance. In addition, the scammers would also require users to submit their private keys, and some beginners easily fall for it.
Once scammers obtain the private key, they could then transfer all cryptos in the wallet; therefore:
Any airdrop campaign that asks you to enter your private key is definitely a scam. Do not be fooled.
In short, you should be careful with all suspicious airdrops. Your petty greed helps scammers get their own way, so please remember that there is no such thing as free lunch.
Do not click on any unknown airdrop links, scan any QR code to give authorization, or send the private key/mnemonic phrases to anyone. Stay alert against airdrop scams, and please go to our official website (https://wallet.coinex.com/) to access or download CoinEx Wallet.
