Preventing Blockchain Scams: How Mimicry and Counterfeiting Steal Your Digital Assets

With the rise of blockchain technology, this decentralized world has brought unprecedented innovation and opportunities, but it has also attracted the attention of many fraudsters. Mimic and counterfeit project scams are rampant in the blockchain industry. Scammers impersonate well-known projects and copy popular platforms to deceive users into trusting and investing, ultimately stealing their digital assets. On the blockchain, due to its decentralized, anonymous, and immutable nature, once assets are stolen, it is extremely difficult to trace and recover them, often leaving victims helpless.

These scams exploit the unique characteristics of blockchain, disguising fake projects so convincingly that many users fall victim without suspicion. This article will reveal several common mimic and counterfeit scams, analyze how they operate, and offer some effective prevention measures.

Definitions of Mimic and Counterfeit Scams

Mimic Scams: Attackers impersonate legitimate projects or platforms by replicating their appearance, design, and branding, misleading users into believing the project is real.

Counterfeit Scams: Attackers copy the entire code, concept, or product of a project, launching it with low cost or fraudulent intent to deceive users.

Phishing Websites/Apps

Phishing sites and apps masquerade as legitimate ones, often by using fake domains or app icons, tricking users into thinking they are on a legitimate site. The goal is to steal login credentials, private keys, or sensitive information.

Fraudsters exploit internet technology to copy official website templates and materials, misleading users into believing that they are legitimate wallet websites. They also use search engine optimization techniques to boost the website's visibility and ranking, attracting more traffic and potential victims.

Fake wallets involve scammers decompiling APK or IPA files, inserting code to upload private keys or mnemonic phrases upon wallet creation or import, and repackaging them for distribution on fake websites. Once users download and use the fake wallets to input their private keys or mnemonic phrases, this data is automatically synced to the fraudsters servers, allowing them to steal or monitor users' assets, ultimately resulting in asset loss.

Cloned Tokens or Projects

Scammers counterfeit well-known project tokens and blockchain protocols, often using similar names and code to trick users into investing. These projects typically alter the name or logo slightly, making users believe they are official projects.

Below is an example of a scam project where the name “BSC”, logo design, issuing company, and internal design all closely resemble Binance, misleading users into thinking it is a Binance wallet.

Fake Airdrops and Giveaway Scams

Attackers impersonate well-known projects, celebrities, or project employees, announcing “airdrops” or “giveaways” that require users to send a certain amount of cryptocurrency in advance to receive a larger return. These scams exploit users' interest in “free” cryptocurrencies or tokens, tricking them into submitting funds or personal information, which ultimately results in asset theft or privacy breaches.

As users become more cautious, scams have evolved. Now, fake airdrops often follow trends. When a major project announces an airdrop, scammers will create guides on how to claim it, promoting these guides as KOLs (Key Opinion Leaders). Within these guides, the link to claim the airdrop is replaced with a phishing link created by the scammers.

Prevention Strategies

Here are some practical prevention strategies to help you avoid becoming a victim of scams:

• Verify Project Authenticity: Before participating in any project, ensure to verify its authenticity through official channels. Dont trust social media promotions or unknown links. You can use platforms like WikiBit to check the legitimacy of the project. WikiBit provides detailed information on blockchain projects, including team backgrounds, regulatory information, and user reviews, helping you assess the project's credibility.
• Avoid Clicking Unfamiliar Links: Scammers often spread phishing links through fake emails, ads, or social media messages. Ensure that the links you click come from official sources and not from third-party forwarding or unknown origins.
• Be Cautious with Airdrops and Giveaways: Always confirm the authenticity of an event through official announcements or reliable community sources.
• Regularly Check Account Security: Monitor your wallet and account activity regularly, check authorized smart contracts, and revoke any suspicious contract authorizations to prevent potential risks.

By following these prevention measures, especially using platforms like WikiBit to verify project websites and other information, you can more effectively avoid blockchain scams and protect your digital assets.